Printer Strategy: Refocus and Conquer

How the suppliers combat diminishing return to survive

by Teri Tan -- Publishers Weekly, 6/24/2002

All suppliers are not created equal. That much everybody agrees. But in Hong Kong/China, distinguishing one printer/broker from the next is now bordering on the impossible. All suppliers provide extensive product range and impeccable service, all totally committed to faster turnaround, fantastic quality and competitive prices.. So, in order to get the most out of your search for the best supplier(s) for your manufacturing needs, an in-depth investigation before signing off on quotation is now imperative.

The following review of 22 printers/brokers is by no means exhaustive--there are capable suppliers out there enjoying a low-profile and thriving business--and it is not intended to endorse, recommend or promote any particular supplier. Rather, it's a research tool you can use to compare product offerings, services, capability/capacity and operational set-up.

Here, instead of rehashing last year's review, more space is given to new companies interviewed, followed by updates on those visited previously. Nonpaper component/plush-and-plastic and color-separation suppliers are reviewed in separate articles in this report, respectively in "Non-paper on the Rise" and "Color Separation: Easy Street No More ".

Now part of Next Media Group, Paramount Printing--and its independent color-separation/pre-press arm, Rainbow Graphics--is doing export sales as well as catering to its in-house publications. "Half of our volume now goes to Next Media's weekly magazines, and this occupies almost all our web capacity," says marketing director Peter Nustedt. "Of the remaining half, 50% comes from the U.S. and 40% from Europe, and the product breakdown is 50% coffee-table books; 25% children's books; and the rest is magazines and calendars." Paramount's export business has been growing by about 30% per annum for the past few years, which, Nustedt says, "is mainly because Paramount was pretty run down prior to the acquisition." Most of the growth comes from the U.S. and for 2002, additional sales are expected to come from the calendar and children's book categories. "We are not big on hand-assembly," he says. "So when a project requiring handwork comes in, we call on a group of selected contractors to handle that part of the process."

Is jumping onto the Shenzhen-relocation bandwagon on the company's card? He says, "Well, most of our work is time-sensitive, requiring tight production control. Moving across the border may not allow us to keep an eagle eye over the production and to respond quickly to customers. With publishers striving for fast turnarounds, quick response and tighter quality control is all-important." But surely remaining in Hong Kong would mean a costlier operation? "We can afford to pay higher wages to our staff because the overheads are covered by our in-house publications. With that accounted for, we are free to pursue and to grow our export business," says Nustedt. "Our focus now is on finding the most appropriate CtP system for our projects. Many of our customers are going into full digital workflow, and there is a pressing need to go into CtP for better quality control and cycle time reduction."

Paramount did experience a slowdown during the months preceding September 11 but, as Nustedt puts it, "The scheduling for 2002 looks promising and there is an increased call for reprints." He goes on to say that initial print runs are becoming more conservative, and that quicker reprints generally follow. "We have no problems with ultra-short runs. The quantity depends on what the customer is prepared to pay per copy to cover prepress, platemaking and makeready costs."

This company produces many art books for living artists, as well as for gallery/exhibition sales, where color-matching is paramount (pun intended). "We produce Phaidon's Monograph art book series and just finished a few projects for National Portrait Gallery (U.K.), namely catalogues for its Romney and Romantics and Revolutionaries exhibitions. We also produced Henry Darger's In the Realm of the Unreal [Delano Greenidge Editions] for his New York exhibition. For these projects, besides accurate color-matching, we also have to ensure the finished products are delivered in time for the exhibitions' opening. Often, we don't even get the films until the last possible minute after exhibits are confirmed," Nustedt elaborates on the challenges of this niche market. Other recent titles include the Learning Horizons children's series (American Greetings), World Trade Center (Abbeville Press), The House Book (Phaidon), Franklin's Hockey Game (Kids Can Press) and the Architecture in Detail series (Phaidon).

Nustedt adds, "We operate in a mature market, where our strengths and weaknesses are public knowledge. At Paramount, we have a success story to tell over the past three years, and most clients want to be a part of it," he declares.

South China Printing is one of the oldest names in the Hong Kong/China printing industry, and it has gone through several hands since its establishment. The reversal of fortune for Sally Aw--owner of Sing Tao Group, which was previously a major Hong Kong powerbroker/conglomerate--has resulted in the acquisition of South China Printing by investment/venture-capitalist group CVC Asia Pacific. CVC counts Citibank among its members.. The acquisition involved only the Sing Tao Printing Group, to which South China contributed 70% of its total sales and more importantly, 85% of its profit. There has been no major management restructuring since CVC came into the picture. Says managing director Raymond Ching, "We are looking at major cash infusion and vertical/horizontal growth for the company. CVC is just what South China needs in order to grow and venture into new fields.". Ching is a familiar name in the industry, having worked for many years at the print-broker Mandarin Offset in its heyday.

Established just after World War II by a Shanghai investment house, South China spent its early days printing calendars and cornering the domestic packaging market. When its founder retired in the 1970s, the company was sold to Sing Tao Group, which restrategized it for export printing. The company's major expansion came when it moved from Hong Kong Island to Shatin in 1988. At present, 80% of its product goes to the U.S.; the rest to the U.K. and Australia. "South China is generally considered as the best printer for children's books and we are also strong in conventional picture books and coffee-table books," Ching says. In 2001, South China had a record-breaking year. "Over the last four years, we achieved 100% growth in U.S. sales, and in 2001 alone, sales to the U.S. doubled," Ching notes. Novelty-based product sales have also increased significantly over the years and now contribute 10% to the overall figure. Children's books and related products bring in almost 60%. Naturally, Ching names Tien Wah Press as the company's major competitor.

There are only 120 workers in the Shatin facility but in Dongguan--where the main factory is located--staff numbers more than 1,000. Equipment-wise, there are eight presses in Shatin (two 5-color, four 4-color, two 2-color) and six presses in Dongguan (one 6-color, three 5-color and two 4-color). Half of the presses are less than six years old. In terms of production capacity, South China is looking at about 30 million copies for 2002.

"Our main strength lies in our expertise in book printing. That's also our commitment to customers. We promise consistency in price, quality and delivery," Ching says. For the last four years, this company has been commended by Harcourt on its 100% on-time delivery for a total production volume of five million copies. "The game plan to succeed in this highly competitive business," according to Ching, "is always to maximize or improve utilization/contribution of equipment and personnel. Our diligence in this exercise has resulted in increased profit margins year after year."

For Winner Printing & Packaging, its 1977 humble start-up by three employees using one secondhand press is now part of the company's illustrious history. Currently it has 10 presses (4-, 5- and 6-color) and more than 3,000 workers, with two additional production plants in Shenzhen and Guangzhou. Its Hong Kong factory employs about 60 workers for time-sensitive projects. Its two CtP systems, supported by a largely Macintosh-based pre-press line, operates 24/7. About 60% of Winner's business comes from the U.S., with the rest from the U.K./Europe. It serves two specific segments: children's books and packaging, and its preferred print run--though nobody would turn away anything that pays the overheads--is full-color novelty product of 10,000 copies.

Recently, Winner did a special finishing for a packaging project involving colored flocking on a blister-card to produce a realistic hairy-animal pattern on paper. Sourcing for raw materials for the project was challenging due to the short timeframe given. Adding to the complexity, Winner also had to find the best process flow and the most economical manufacturing method. The end result, says managing director Arthur Tang, "was good, and our customer was very pleased."

He continues, "Over the years, publishers are getting more demanding in both quality and delivery. Intense competition also means smaller profit margins and greater risk-taking. A high level of personalized service is required to retain and expand the business." That is why Tang is looking for an agent to help manage U.S. accounts and to be closer to customers. "It's definitely the survival of the fittest out there, unless the global economy expands dramatically--which, given the present outlook, is hardly going to happen any time soon. There are fewer windows of opportunity for new entrants."

Started as a small father-and-son business in 1954, Everbest has garnered more than its share of accolades from the publishing world. It experienced some shaky moments in 1996, just before the handover, and during its relocation to Nansha in 1997. Yet, Everbest still managed to post 20% growth over the last five years. So PW concludes that this show of strength has much to do with the company's motto, which Ken Chung, managing director and son of the founder, explains: printing is turning into a high-tech/high-touch industry where printers no longer mass produce and hawk their products to everybody. "Instead," he says, "each customer who walks through the door has a different agenda requiring tremendous attention to detail before their product is 'born' as a 'perfect child.'

Everbest is one of the few printers licensed to print for the Chinese market. What does that mean? Chung says, "Printers without this license are only allowed to print books and then ship them out. In order to sell the books back to the mainland, they would have to go through the reimportation red tape at an added cost and taking a much longer lead time. It took us three years to obtain the domestic book-printing license after we moved to Nansha." Its 700-strong Nansha operation facilitates the company's focus on its hand-assembly expansion program.

Chung says, "Only a small percentage of our business comes from China. However, there are rapid changes in the Chinese market conditions, no doubt due to its WTO membership and multifaceted economic reforms. But we are not dependent on mainland business. Our sales are quite evenly distributed: 40% from North America and the rest shared by New Zealand, Australia, Europe and the rest of the world." Plans are afoot to install web presses by the end of 2002. Installation of a Agfa Galileo CtP system was completed more than a year ago. Utilization rate was low in the beginning, but now 20% of its projects are CtP. Most prepress jobs are still subcontracted.

"At present, we are helping Chinese publishers establish contact with our overseas clients who are interested to have Chinese co-editions. Our role is to introduce and to assist in putting together the deal," he explains. "We offer these Chinese publishers high-quality printing, which they don't usually get at competitive prices, while reassuring our overseas clients of their films/files' safety and integrity. They can be assured that we won't print above the contracted volume, as piracy is is usually one of publishers' major concerns."

Coffee-table books make up more than 90% of Everbest's business, plus a bit of packaging-printing thrown in. "For coffee-table books, publishers' demand is always for lower prices and faster delivery in addition to more flexible scheduling. Quality is a foregone conclusion. As a printer, if you don't have quality to show, you won't even get through the customer's door in the first place," he concludes.

For Pacific Rim International (PacRim), sales come mainly from Asia (70%) and the U.S. (30%), and of this, 20% is children's books and 30% museum books. Since its inception in 1985, business has more than tripled. However, sales were down by about 15% last year due to the slow economy. Still, PacRim is confident of increasing its U.S. sales, especially in the book and catalogue categories. "Our strength remains unchanged: we stand by our work, pricing and schedule. We network with designers, act as print consultants for new publishers and we are experts in logistics and scheduling," says Tommy Lee, president of PacRim. "Customer confidence leads to repeat business. That's our secret of success, and it is neither revolutionary nor an ancient Chinese art."

PacRim's Los Angeles rep office is staffed by seven customer service/consultants working closely with its Hong Kong factory in Wong Chuk Hang Road. The factory has a fully equipped pre-press department, predominantly Macintosh-based, with a Galileo S, Agfajet Sherpa and Sherpa 43 for CtP workflow/proofing. The system was installed last June and currently, the workflow is 80% digital.

If there is one particular segment which PacRim is known for, it's the museum/art books category--a challenging market requiring precise color-matching, delicate handling of original materials, 200-line-screen printing and equally careful packing/handling and shipping. Complicated projects recently completed for worldwide market include PassPorter: Walt Disney World Resort (Media Marx), which required printing, constructing and insertion of 11 individual envelopes/pockets in sequence into the back of each copy, and The Rabbi Who Flew (Booksmythe), an illustrated children's book. Lee stresses that his company is not joining the hand-assembly rush any time soon. "We are going to concentrate on printing and not on novelty, plush/plastic or hand-assembly, which is not what we are good at."

Jason Ma, operations manager at H&Y Printing, considers the effect of September 11 on the industry as history and says that everything--scheduling and activity--is now back on track. For a company with 70% of its business coming from the U.S. market, the reenergized printing season is crucial. "You can call us a 95%-export printer, since even our local sales are ultimately for export." Close to 90% of its products are educational books, coffee-table books, children's books and art books--a make-up reflected by its mostly 4-color presses. Coffee-table books represent 60% of the total volume, while hand-assembly for complicated gift sets plays a minor role in the company's bottom line. "Hand-assembly, as we all know, has big potential, but our focus is still on book-printing," Ma says.

Two associate companies are subcontracted to handle its color-separation/proofing processes, and there is no plan to go into the front end of the business. "It's best that we focus on what we know and invest in printing/binding technology instead of trying to expand beyond our capabilities," Ma says. "Productivity has increased significantly due to new printing technologies and efficient workflow. A typical run of 3,000-10,000 copies of a full-color, 128-page book takes us about three weeks from film to packing." But, as he notes, cycle time is always flexible, depending on customer requirements. With its California sales office bringing in more business, H&Y has expanded its operation to Dongguan and recently added another 40,000 square feet for future expansion.

In September 2001, Singapore National Printers (SNP) took a 60% stake in Excel United in a move regarded by many as an effort to monopolize the pop-up book market. The managing director of SNP SPrint (Thailand) is Foong Kee Loon. Tan Jin Yan, the former managing director, is now executive v-p at SNP Corporation (Singapore) for the commercial printing business and in charge of SNP SPrint (Malaysia), SNP SPrint (Thailand) and SNP Excel United. SNP SPrint (Thailand) was used instead of SNP Sirivatana in an effort to build the SPrint brand name for the group's printing businesses. By the same token, Excel United is now SNP Excel United, and will be renamed SNP SPrint (Hong Kong) in the near future.

SNP's move would seem to result in job/resource duplication and intra-company competition. But what does Tan have to say about this? "Although both SNP Excel and SNP SPrint (Thailand) are capable of manufacturing the same type of products, both have their own strengths. Just to quote one example: Excel can provide a good turnaround time for huge boardbook projects with their highly efficient workflow in this type of production. On the other hand, SPrint (Thailand)'s flexible workforce means it can multiply its labor pool seamlessly to handle huge quantity of complicated pop-ups." As for synergies, Tan says, "We are now moving towards integrating them by leveraging on our purchasing power of raw materials, equipment, con- tainer capacity etc. We have also put in place a staff exchange program to share production know-how, to standardize sales service level and so much more."

What about confusion among customers? For Tan, this is not an issue. "There are less than 20 common clients between the two companies, and these clients place different products. We continue to develop SPrint to be a one-stop production center for children's books. There is no conflict of interest. In fact, these two companies complement one another. We acknowledge the fact that we now have a large share in the pop-up/ sound module market. Our goal is to continue developing new markets for these products."

If Excel customers are expecting some kind of operational standstill resulting from the acquisition, they will be relieved to know that Excel is building another four-story factory to increase its production capacity and to facilitate better workflow for its finishing processes. SNP also set up a Beijing office not long ago. But according to Tan, "That is mainly for domestic publishing, with an eye on the children's segment. There is no immediate plan for print production in Beijing, though we do not rule out the possibility in the future."

To all intents and purposes, C&C Offset is a state-owned company that is Hong Kong-registered in an astute move to capitalize on the island's financial strengths and entrepot status. Therefore, by default, it now enjoys not only tax breaks but the all-important factor of having Chinese government backing on its side. C&C is moving in leaps and bounds when it comes to investment. In its New Territories factory alone, there are now three CtP systems with an enviable utilization rate. The Shenzhen plant will have its brand-new second CtP system by the time you read this. The company is also eyeing the newly industrialized and reenergized Shanghai for security printing plans.

Last year, C&C started offering digital asset management (DAM) services. According to director and assistant general manager Ken Lee, "In the past, some clients would ask us to keep digital scans on archive so that they could later reuse or repurpose the content. In recent months, we have more clients wanting to publish digitally, and they are exploring possibilities of converting existing materials for cross-media publications. By utilizing our in-house prepress/ publishing expertise, we are able to offer them DAM service."

How does C&C deal with these files/ scans? "Most of them are saved on CD-ROMs in PDF, Postscript and application file formats during the manufacturing process. For some publishers, the files are sent back in the requested format after the project is completed. For others, the files go into archival servers to ease the transfer process and client access. Technically, we have the know-how to help publishers move into e-publishing."

The usually tight-lipped Wing King Tong management once again refuses to discuss anything about their clients or recent projects. Uncooperative? Hardly. PW sees that as a strength: confidentiality is, after all, a highly coveted quality in the publishing world. "Word-of-mouth advertising is tough in this industry," says marketing director Jeremy Kuo. "Publishers are by nature very competitive. Many prefer keeping their suppliers' identity a secret, and most won't even include the printer/manufacturer's name on the imprint page! But we respect their request for privacy, and this goes double when we receive jobs destined for the same target market from competing publishers."

With Arthur Quek fronting its New York sales office, WKT is now poised for a direct assault on U.S. soil. Previously contented with communicating with clients via phone and e-mail, this company has had a major change of heart. Quek explains, "It's a cliche, but printing is a service industry first and manufacturing second. Customers place equal and sometimes greater value on the printer's ability to go that extra mile. So far, due to our efficient customer service, we have been able to retain productive long-distance relationships with all our clients in different corners of the world. But we recognize that in order to expand our business further, we require an even higher level of service--one which can't be delivered without close personal care and face-to-face consulting. This is where our New York office comes in."

"We continue to have great success with clients who found us through the Internet. The number of publishers using this search method to locate offshore printers is amazing," notes Andrew Clarke, president of Asia Pacific Offset from his Washington, D.C., office, the U.S. headquarters for its parent company, Phoenix Offset. He admits that September 11 did affect the company's sales: "The U.S. came to a standstill for much of the last quarter of 2001. Fewer titles were quoted and scheduling was disrupted. There was, however, a tremendous amount of activity for first quarter 2002, as publishers regained their momentum." The level of business now, Clarke says, is about the same as it was for the same period last year. "Reprint activity has been lively," he adds.

Clarke continues, "This year we started to offer CtP services to our clients. This is in addition to traditional film output and wet proofing. Each method has its own merits, and by providing both, we can customize our services to meet client requirements. We have also set up an FTP site for faster file transfer to reduce client's costs and to provide quicker response." This year, he expects to see significant growth in the gift and stationery categories. "Our strongest area of growth in the past year has been in art and architecture books."

A favorite with Forbes magazine in the Best Small Companies category, Hung Hing is not resting on its laurels but looking far into the future. "We are in the process of building a plant in Shanghai to cater to both domestic market and export. To start with, we will concentrate on boxes/ packaging. We believe that the Shanghai area offers great potential, and this expansion is in line with our overall plan for the company. This is an area populated by more than 100 million people and serviced by the present Hong Kong/ New Territories/ Shenzhen printers. It needs more printing houses," says managing director Matthew Yum. Its new wholly-owned plant located in Wuxi will have a "buildable" factory floor, close to two million square feet; first-phase construction is targeted for the first quarter of 2003.

Several months ago, Hung Hing joined the CtP movement by installing its first CreoScitex system in Shenzhen. Though optimistic about the enhanced efficiency the system can bring to its production, Yum notes, "The workflow is not appropriate for some of the children's books we produce, but CtP is definitely the direction to go in this business." Yum is modest about the company's plan to stay on top of the competition. "We will keep expanding and searching for new markets, and reinvesting in new technology, equipment, human resources, etc., in order to enhance our performance." Despite a considerably low growth of 10% in the first half of 2001 and a quieter second half, he is confident that there are opportunities even in the gloomiest economy. Yum's stance is appropriately summed up by an old Chinese proverb: fish when the water is murky.

Truth be told, Megumi Sonoda, senior manager for the overseas sales, purchasing and shipping division at Toppan, is very disappointed at the 30%-40% drop in the company's U.S. sales following September 11. Fortunately, the company's diverse portfolio has allowed for a great balancing act that resulted in a bottom line mirroring that of 2000. "It's interesting to note that our Japan sales have increased tremendously despite its dismal economy, and that has helped to stabilize our 2001 turnover," he says.

According to Sonoda, Toppan has experienced an increased demand for digital/CtP workflow from the coffee-table book segment. "About 70% of our customers are sending in high-resolution PDF files instead of films or application files. We handle the whole prepress process from there onwards. We do not subcontract out. Another observation: these customers are also more inclined towards digital proofing and remote proofing. So we are going to take advantage of this trend by installing a new CtP system in our Shenzhen plant soon." Any major problems with the electronic files from customers? Sonoda says, "One major headache is the different versions used by different customers. We just have to keep investing in software and training and also to keep up with the prepress/workflow technology."

For Hua Yang, the U.S. economic downturn has resulted in a drop in sales from that market. The company is taking advantage of the lull to reassess its strategies and future direction. Kevin Murphy, its president and CEO, says, "We are redefining our markets to better utilize our skills and facilities in every possible way." There are some changes in the management structure at Hua Yang as well: Alex Ngan resigned last year; Richard Burgess is now in the New York office; and a new recruit, Tony Brooks (v-p of marketing), now heads the market development/ sales department. The company is also working closely with creative personnel in France and Germany to do more conceptual design and to develop new materials.

Dai Nippon is planning to go into hand-assembly in a big way. Accordingly, its five-year old Dongguan factory--controlled from its Shenzhen operations office--is placing more emphasis on hand assembly as opposed to book printing. Meanwhile, its New Territories facility is experimenting with various printing processes to provide new services. One current gimmick is registered embossing to create a high-end look to products, especially children's books. "On top of the embossing, we can further add UV lamination and stamping, to give it a deluxe feel," explains general manager Tsuyoshi Naganuma. Printing on metallic foil paper, which is popular in the U.S., is also widely done in this factory. Direct-to-press seems to be thriving in Dai Nippon. Another Screen ThruPress has been added to handle increased demand from domestic and Japanese markets for calendars and leaflets.

Conrad So, executive director at New Island, is very optimistic about the company's strengths in material/process research and development, particularly in applying new processes to traditional products such as novelty books, educational packs, stationery, a combination of these and packaging. "The next trend in print manufacturing could very well be hybrid formats, utilizing PVC, clear acetate and different materials and processes presently available and being developed. We are seeing more customers requesting nontraditional techniques and processes in hand-assembly products." New Island's in-house R&D division has been providing this type of service for many years but it still remains one of the few to have dedicated in-house R&D resources. The company's confidence in this higher level manufacturing technology is reflected in its state-of-the-art Dongguan printing facility, built to complement its hand-assembly operations located in the same area.

At Leo Paper, reinvestment and fast expansion seem to be the top items on its to-do list year after year. The current tally shows 33 presses and three automatic casing lines, one of which is connected to a 24-station perfect binding line--the exact numbers planned the year before! So, was the company on its two-digit growth track for 2001? "Yes, of course. The situation last fall wasn't as bad as predicted, though of course the year couldn't be better than 2000," says Kelly Fok, group marketing director. Since our last report, Leo has reinvested more than $6 million in equipment, technology and training for personnel in its Kowloon, Heshan and Nanhai facilities. "With the industry becoming so cost-driven and time-sensitive, the way to increase productivity and quality is to invest. All the time," Fok says.

Leo's hand-assembly department has stabilized at around 7,000 workers. The company has a 11,000-strong workforce. "We are upgrading the department and going into semiautomatic production. This is in line with our goal to achieve consistent quality and increased productivity," Fok says. "But it would be impossible to totally automate the processes currently done by hand. My guess is that viable automation to replace these operators most probably won't happen in the next five to seven years."

On the topic of shrinking customer pool, he says, "Many suppliers believe that the publishing industry is getting smaller and the volume is shrinking. For Leo, we believe the volume is there. Publishers are finding new and innovative sales channels to market their products. And the mass channel is also playing an important role in driving up sales volume.." But Fok does agree that profit is getting smaller, and believes "high-level customer service, in-house full-service and exceeding client expectation make the difference."

With its manufacturing based in Southern China, Leo has been shipping about 50% of its finished goods directly from mainland ports for quite some time. "It's a decision that brings about savings for customers and adds speed to delivery," says Fok.

Nowhere is the defiance to the gloom-and-doom prediction stronger than at Elegance Printing. Its U.S. business in 2001 grew an astounding 50%, which Frank DeLuca, U.S. managing director, attributes to its multiple in-line Creo Topsetter CtP/Heidelberg systems and time-saving fully digital workflow. "Publishers are getting better with the digital workflow as time passes, but we are still seeing a lot of incomplete files--the major hiccup--coming through our door. PC files are also more problematic compared to Macintosh files as we then have to deal with font, file conversion issues, etc. So, in order to ensure the files are as error-free as possible prior to pre-flighting, we have stringent 'first-gate' quality checks."

Last year, the company put in two more 5-color Heidelberg presses, bringing the total to 16 presses, and doubled its customer service personnel. "As a rule, we move equipment that is older than 48 months to our Shenzhen facility. At present, we have doubled our Shenzhen operation, to more than 200,000 square feet, 1,000-plus hand-assembly workers and five Creo/Heidelberg CtP-to-press systems. We have also started offering boxed stationery products and numerous labor-intensive products." Elegance still does the majority of its printing in Hong Kong, believing that the labor quality is higher here than in China (where all the binding is done). The Kwun Tong facility is set to go through major expansion program as the company adds another U.S. sales office (in New England) to serve East Coast customers and to target new markets.

ColorCraft is gearing up for a bullish 2002, according to deputy chairman David Kinloch. Part of this confidence stems from the completed modernization and expansion program for its Hong Kong office, which was put into motion in the last quarter of 1999. The program was completed ahead of schedule and even though, according to Kinloch, there were many traumatic shifts in staff, work practices and systems during the process, the company has weathered it very well. "The resilience of our staff--old and new--helped much during the storm," he adds. New integrated software to improve response time and efficiency was also added. In terms of personnel, the company has added two major posts--chief financial officer (Peter Guy) and production director (Stephen Stringer)-- to enhance management and total expertise.

Over the last 30 years or so, ColorCraft's core competency is still "simple" printing, which generates 90% of its overall sales. "Children's books remain our strongest area. Although some of our clients were quieter than usual in this gloomy economy, we still saw significant growth in 2001." In total, sales increased 15%, and for the first quarter of 2002, sales and margin are notably higher compared to the same period last year. Production of book-plus and educational games--where ColorCraft has begun to provide the full package instead of just paper and ink--has also increased significantly.

The ultrashort-run (USR) is getting popular with publishers who prefer zero inventory levels and direct-to-store policy. At Palace Press, one recent USR project was a duotone, case-bound, limited edition of 500 pages, in a run of fewer than 1,000 copies. Though general manager Lesley Sun says the company is not targeting USR printing, it is versatile enough to do limited editions in runs of 500.

Publishers mainly know Palace Press for its ability to handle complicated projects with innovative manufacturing methods. One recent example was 1,000 New York Buildings for Black Dog and Leventhal. For this book, artist Thomas Palmer prepared 1,000 duotone files using the latest high-resolution digital technology; the files and screen angles were manipulated on Palace's direct-to-plate printing press. Through repeated testing, they came up with optimum solutions for densities, screen angles, dot-gain percentages and other technical criteria. The 586-page tome was then printed on high-quality Japanese matte artpaper and case-bound for an initial run of 25,000 copies. "This is just an example of how we're able to save thousands of dollars in film costs for our client while still achieving a museum-quality book using the latest technology in a seamless process," Sun says.

Palace Press's future plans include content creation, print consulting and expanding into toy-based product sourcing. "We are leveraging on our experience with Side Show Toy, which currently handles all the limited-edition characters for Lord of the Rings and the collectors edition DVD set for New Line Cinema." As for current trends, she says, "We are seeing significant growth in special market products, which have more interactive elements as opposed to traditional books. But coffee-table books remain our strong market." And she is pessimistic about the future of e-publishing: "People love books, the smell of fresh ink on a page, the feel of paper, binding, etc. The essential human need for tactile interface will never be replaced by e-books."

At Regent Publishing, managing director George Tai is optimistic about the company and the future of both the printing/ brokering and publishing businesses. "We believe that partnership is key to a healthy bottom line, and it provides a better relationship with clients. Besides providing publishers with more gimmicks and novelty items, we must help them to create and develop new ideas, lead them through the new technologies and assist in the adoption process." Leveraging its 18 years of experience in print buying and manufacturing, Tai has recently set up a nonbook and sourcing department responsible for component sourcing and assembling. The goal is, according to Tai, to provide a more comprehensive, one-stop service for clients.

As to potential competition from Shanghai, he says, "That's undeniable: the city is set to become the next printing center in China because many publishing houses and printing/ manufacturing companies have set up branches and factories there. But for the next five to 10 years, I see Shanghai catering to the domestic market only. And as people around the world become more aware of mainland China and its ability to deliver first-grade products and services, they will no longer mind the 'printed or made in China' labels. Then, we are set to see a new phase of print manufacturing in this region."

Even though 90% of Regent's printing and prepress is done in mainland China, Tai says his company is not shipping directly from ports there. "There is a limited number of vessels going to North America in a month, and as most of our customers are from that area and all demand fast shipping, we simply can't afford to do so right now."

Jade Production's performance during the period from April 2000 to March 2001 was "rather dismal," according to James Binnie, its founder and sales director. The months after that were better, but intense competition in the brokering/plush-and-plastic market reduced the profit margin considerably though Jade saw an increase in turnover. Binnie is now actively involved in managing the U.K. accounts since the company lost its sales rep last year. Jade has no specific target market but, according to general manager Ken Kong, "We would like to do more stationery and promotional work and will continue to develop those areas in the coming year." Asked if there is any interesting development in the Hong Kong/ China print manufacturing industry, Kong says: "There are some export printers here actively pursuing mainland markets. Why? Because the quality demand from these domestic market is generally lower. And there are pockets of high-quality demand from the Chinese market that are prepared to pay higher prices than those offered by offshore publishers. So we may see more suppliers choosing to work with mainland customers than pursuing the cost-driven overseas accounts." An observation which is indeed food for thought.