1 EGIN April 2008 INTERGRAF The Competitiveness of the European Printing Industry and the Influence...
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EGIN April 2008 INTERGRAF1
The Competitiveness of the European Printing
Industry and the Influence of China
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EGIN April 2008 INTERGRAF2
Confederation for Printingand Allied IndustriesPlace E. Flagey 7BE – 1050 Brussels
25 Member Federations in 22 Countries
INTERGRAF
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EGIN April 2008 INTERGRAF3
• European Graphic Industry
• Chinese Printing Industry and imports affecting the European market
• Analysis and initiatives
Content of presentation
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EGIN April 2008 INTERGRAF4
• 130,000 companies; 870,000 employees; 100 billion EUR turnover • Sector which is dominated by small and micro companies• Largely focussed on domestic market• Dependant on trends in advertising• Investments focus on equipment acquisition. R&D and other immaterial investments are more marginal• Characterized by structural overcapacity• Enormous pressure on prices• Dependence on very large customers and suppliers• Emergence of new actors: print management companies• Varying importance of foreign trade; deterioration of trade balance in most countries
Profile of the European Graphic Industry
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EGIN April 2008 INTERGRAF5
Chinese Printing Industry
1985 2002 2006
11,000 companies 90,000 companies 97,000 companies
850,000 employees 3 Mio employees 3.4 Mio employees
0.6% of GNP 2% of GNP
2003 EU 27:
126,000 companies
900,000 employees
91 billion EUR
• Growth Rate of 15% per year• Total turnover of 30 billion EUR in 2005 • Market Segments: Commercial Printing 41%, Packaging Print 40%, Pre-press 19%• 40% companies privately owned, 26% collective companies, 18% joint stock companies
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EGIN April 2008 INTERGRAF6
A long way to go for fair trade
Intellectual Property RightsTurbulent, high-risk IP environment:• Counterfeited goods;• Entire fake companies;• Rampant piracy from DVDs, watches and luxury goods to software and pharmaceuticals;• Reverse engineering;• Limited legal enforcement.
Production ConditionsVery low production costs due to various factors
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EGIN April 2008 INTERGRAF7
How far is China?
Boat
30 days, Shanghai is the third largest port in the world
Road
20 days, increasing efforts by the International Road Transport Union to simplify customs procedures
Airplane
Overnight; Transport by air seems to be an option for European buyers
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EGIN April 2008 INTERGRAF8
Chinese Printing Industry
Bohai Rim
Beijing
Yangtze River Delta
Shanghai
Pearl River Delta
Hong Kong / Macao / Guangzhou
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EGIN April 2008 INTERGRAF9
Chinese Printing Industry
Developments
• Today, newspapers, books, packaging, magazines are dominant sectors by value;
• Sectors that will gain importance: Packaging, advertising and promotional-related print sectors are expected to increase
• Less imported equipment expected• Industry concentration in delta regions
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EGIN April 2008 INTERGRAF10
Key points for CHINESE Printing industry
Industrial structure and
economics
Supply chain
Clients & ProductsTechnology
Regulations
Challenges
• Since 2006 China has managed to satisfy local consumption needs for paper, ink and machinery• Chinese machinery not far from European one regarding quality
• Technology gap with Europe is not deep• European machinery manufacturers are in the process of opening subsidia-ries. Complaints about infringement of IPR
Environmental legislation seems to exist only in the field of energy production No information on H&S Larger companies are ISO certified
• Local market is skyrocketing• Customers’ portfolio is international• Customers are target of worldwide promotional campaigns• Officially they can order all products
• Some 6 000 publication printing companies• 37 000 packaging printers• 54 000 other printing • 3 Mio employees
Economic Background
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EGIN April 2008 INTERGRAF11
The Globalisation of Print – Chinese Import penetration grows
75 Mio EUR in 1995
650 Mio EUR in 2006
GERMANY
SPAIN
FINLAND
FRANCE
ESTONIA
SLOVENIA SWEDEN PORTUGAL
LUXEMBOURG
NETHERLANDS
DENMARK
CYPRUS
CZECH REPUBLIC
BELGIUM POLAND
ITALY
GREECE
HUNGARY
IRELAND
LITHUANIA
LATVIA
SLOVAKIA AUSTRIA
UNITED KINGDOM
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EGIN April 2008 INTERGRAF12
Imports of printed matter into selected European countries 1995-2006 (in EUR)
SPAIN
NETHERLANDS
POLAND
BELGIUM
GERMANY GERMANY
GERMANY FRANCE
UNITED KINGDOM
UNITED KINGDOM
UNITED KINGDOM
ITALY POLAND 0
50
100
150
200
250
300
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Mil
lio
ns
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EGIN April 2008 INTERGRAF13
Imports of printed matter into selected European countries 1995-2006 (in Million EUR)
without UK and Germany
ITALY
ITALY
POLAND
POLAND
AUSTRIA AUSTRIA AUSTRIA
BELGIUM
BELGIUM
DENMARK DENMARK
SPAIN
SPAIN
FRANCE
FRANCE
FRANCE
ITALY ITALY
ITALY
NETHERLANDS
NETHERLANDS
PORTUGAL
0
10
20
30
40
50
60
70
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Mill
ions
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EGIN April 2008 INTERGRAF14
The relocation drivers are based on product and market characteristics:
• Volume to be produced
• Time for delivery (including conception, order, manufacturing and transportation schedule)
• Importance of labor cost and manual operations in products
Categories of products affected by relocation
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EGIN April 2008 INTERGRAF15
Categories of products affected by relocations
Manufacturing time limits
Volume Ordered
Low
High
Short time limits Long time limits
Books
Printed trade materials
Newspapers
Magazines
Affected by relocations
Potentially affected by relocations
Catalogues
Best Sellers books
Manuals of
delocalized products
Children booksDiaries
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EGIN April 2008 INTERGRAF16
Chinese Influence on European Print Market• Increasing pressure on European markets • Countries most affected: UK, Germany,
France, Netherlands, Belgium, Spain• Other Asian countries with some influence:
Hong Kong, Singapore, Malaysia• Even though the total amount of imports is
not yet threatening the increase witnessed over the past years is dangerous
• Most affected categories of products: other books, children books, calendars/ greeting cards and other printing
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EGIN April 2008 INTERGRAF17
Analysis of the EU Printing Industry
StrengthsModern & efficient production
tools
High quality and flexible product offer respecting the environment
OpportunitiesDifferentiation possible
Service orientation grows
Multi-media comm. solution
WeaknessesAverage size too small
Overcapacity
Moderate intern. Experience
Weak negotiation position
ThreatsGrowing presence of third
countries
Relocation of activities
Intense price war
Disconnected from R&D
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EGIN April 2008 INTERGRAF18
Analysis of the EU Printing Industry
• Lack of common and shared vision• Low level of consolidation• Weak negotiation position • Overcapacity• Standard product positioning without sufficient
differentiation or added value
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EGIN April 2008 INTERGRAF19
Scope for Action
• Managing production costs• Find new growth basis• Support European printers and develop the
European Printing Industry• Invest in human resources for the future• Make printing industry a reference in terms of
Health & Safety & Environment• Improve the image of the printing industry with its
best practices
Actions need to happen at company, national and European level
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EGIN April 2008 INTERGRAF20
• Publication of the Intergraf Report on China in March 2006
• Intergraf Workshops and Conferences in different countries in 2006 and 2007
• EU Commission Study published in autumn 2007 • Publication of “Why print in the European Union” • Joint European Campaign to promote Print:
Print Sells• Set up of a project data-base• Draft of a Common European Action Plan along the
6 Action Points
Intergraf Initiatives
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EGIN April 2008 INTERGRAF21
Intergraf Member Projects
Environment / H&S / Waste
Short term Long term
Standardization
Market Trends
Process Optimization / Cost calculation
Lean Managementlocal level /
company
national
EU
Innovation / Research & Development
ProcurementGuidelines
Machine Guidelines
InternationalizationCompetitiveness
Value of Membership
Human Resource
Image
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EGIN April 2008 INTERGRAF22
Some key issues for the future
• Research on imports from China (H&S issues)
• Provide market trends
• European Project for value added services
• Reinforced co-operation of companies
• Sharing of best practices at association level
• Involving more stakeholders
• Developing a European Research & Innovation network
• Lean management and improved processes
• Printing standards network
• Develop Print Sells as continuous network
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EGIN April 2008 INTERGRAF23
Human Resources• Courses and workshops throughout Europe / trainee
programmes• Cross-media: education on the developing and marketing
of cross-media concepts• Network of companies with focus on process optimization,
new working methods and competence development• E-learning based training courses developed with
universities• Up-date of job profiles to respect the changing customer
demands• More modular approach in education and training
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EGIN April 2008 INTERGRAF24
IINTERNTERGGRAFRAFPlace Eugène Flagey 7 Place Eugène Flagey 7 BE - 1050 BruxellesBE - 1050 BruxellesTel: +32 2 230 86 46Tel: +32 2 230 86 46Fax:+32 2 231 14 64Fax:+32 2 231 14 64www.intergraf.euwww.intergraf.eu
More Information ….
Thank you for your attention!
Beatrice Klose - [email protected]