With the integration of World Color Press and Quebecor largely completed, "We're ready to move forward," declared Marc Reisch, president and CEO of Quebecor World North America, in an interview at the printer's Greenwich, Conn., offices. Quebecor acquired World Color in late 1999, bringing together two companies whose strengths complemented one another. "We can do virtually everything on a global basis" in the print world, Reisch said.
Quebecor's book printing revenues were $790.9 million in 2000, accounting for 12% of the company's total revenues. According to Jerry Allee, president of book services for Quebecor World North America, about 60% of its sales came from consumer books, 25% from the educational market and 15% from Bibles and specialty printing, an area that includes its print-on-demand operations. The major expansion thrust for Quebecor over the next year will be to expand its business in the education market, especially in the elhi segment. "It's clear we're undervalued on the education side," Reisch said, adding that the company is committing a significant amount of capital to expand its capacity to print educational materials.
Another core area that Quebecor is looking to expand is the trade multicolor segment for both adult and children's titles. Quebecor printed the new Tiger Woods book, and is looking to do more in the illustrated book market, Allee said. The expansion in the elhi and consumer fields are part of Quebecor's strategy to increase its business with its core customers. Quebecor is hoping to use its global presence and multi-platform capabilities to convince media companies with worldwide operations to reduce the number of printers they use, whether it is for magazines, catalogues, inserts or books. Because many media companies are now so large, they need to think differently about buying services if they want to effectively leverage their scale, Reisch maintained.
To increase its business with its core clients and to add new ones, Quebecor is steadily increasing its use of print-on-demand technology. Currently, Quebecor is using print-on-demand principally in its rapidly growing customized textbook business, but it is looking to transfer that process to the trade segment and even beyond the traditional book market. Unlike textbook publishers, most trade houses do not see customized products as a new revenue stream; Allee and his team hope to change that thinking. Quebecor has worked with Fodor's to develop the travel publisher's custom book program, which permits consumers to create their own guidebooks from different Fodor's titles, and Allee would like to see more publishers adopt similar initiatives. The printer is also exploring ways to use POD to penetrate the journal, courseware and training manual markets. "Publishers are looking for more customized products and we see lots of potential," Reisch said.
One more area that Reisch and Allee believe is right for expansion is the distribution and fulfillment business. Allee said Quebecor is prepared to ship books from both large or small publishers directly to an individual's house or to a company's stores.
A Hard Six Months
After a strong 2000, business has slowed in 2001. "It was a tough first half. Business wasn't horrible, but it wasn't great," Allee said. The third quarter was "much improved" over the first two, but Allee said the fourth quarter could go either way. "It will be all about reprints," Allee said about the fourth quarter prospects. One segment that has been surprisingly strong is the mass market paperback category. Quebecor has had its best year in that segment in at least five years. "We're very encouraged," Reisch said.
While most of Quebecor's book printing is done from digital files, the company has no plans to enter the e-book business, and Reisch is wary about straying too far from its strengths in the print world. "We feel very comfortable that we can get a good return from the printing business. We will be really, really right or really, really wrong," Reisch said.