A New Round of Shuffling will arrive in Printing Industry (I)

(NPES international Printing E-Commerce Network 2008-12-26) For the printing industry, 2008 is bound to be an extraordinary year, from paper price hike to the promulgation of new labor contract law, from the central bank raised the bank deposit reserve rate to the RMB appreciate, from the Wenchuan earthquake in Sichuan to the Beijing Olympic Games, the printing industry has gone through various tests. Now, the financial crisis in the United States has hit rough the world, how can the printing industry "overwinter "? How to withstand the storm?

The Printing machine market is obviously frustrated, 15% of book and magazine printing enterprises took a loss
It is learned from Print and Print Equipment Industry Associations of China that China's book printing, packaging printing, printing machinery and equipment, production and imports and exports are affected to varying degrees under the influence of the global economic downturn in the first half of this year. Among them, book printing enterprises severe decline in corporate profits, many small and medium-sized printing enterprises losing money, some of small printing enterprises in South had gone bankrupt; export products and overseas orders in packaging printing has decreased; due to the affection by the shortage of funds, companies become more cautious to investment, sales of printing machinery was impeded and the update of technology, equipment slowed down as a whole.
In fact, the economic operation of China’s book printing industry has been rather stable in recent years and the annual growth rate has reached 5% in 2006 to 2007. Experts predict that China's total amount of printing books increased slightly in this year, but the margin was small, however, due to low labor costs and rising costs and other factors, the economic efficiency of enterprises in 2008 will continue to decline, the loss-making enterprises accounted for about 15%. State-owned book printing enterprises are lack of stamina and technical funds, technology, equipment will be updated more slowly.
But for the packaging printing industry which has been developing rapidly, the growth rate has also slowed down in 2008. In 2007, the industry's output value amounted to 142 billion yuan, accounting for 32.3% of the total printing output, the growth rate reached 14.2%; Affected by factors such as price hike of raw materials of paper and plastic (about 20% to 30%), rising labor costs (about 10%) and rising energy prices, it is expected that the growth rate in this year will drop to 10-11%. Reporters learned that materials for processing business of packaging enterprises in the coastal areas of Guangdong has reduced and the margin was larger (20-30%). At the same time, appreciation of the RMB exchange rate affect the result of reduced exports, especially exports to Europe and the United States, and orders reduced significantly; losses of small and medium enterprises expanded, the loss-making enterprises in Shandong even reached 20%, tight circulating fund and slow equipment update speed occurred in a large number of enterprises.
For the printing machinery manufacturing industry, the statistical analysis of members of the Association show that the market demand becomes weakening, equipment purchasing power declined and market sales situation become tight. Major economic indicators of printing equipment showed a downward trend: gross industrial output value increased 5%, but product sales value fell 2.6%, total profits dropped 32.1%, the economic efficiency index dropped 25%. Exports fell slightly, the first to third quarter in 2008 reached 0.68 billion yuan of delivery value, down 5%; growth rate of enterprises’ export decreased 5%, profits of export products declined which effected by the depreciation of the U.S. dollar and the fall in tax rebate rate. Loss-making enterprises increased from 6 in 2007 to 13 now, amount of losses reached a new record in recent years, which is 4.5 times above that the same period last year.

Printing machinery enterprises faced with dilemma, transition will be the first choice
"The impact of financial crisis on manufacturing sector comparatively severe " Liu Ying, Market Commissioner of Shanghai Charity Machinery Co., Ltd, who said to reporter of “Chinese Press and Publication" that 20% of small and medium-sized enterprises closed in Wenzhou area in the beginning of 2008, the market department’s feedback is that the number of customer base significantly reduced. "Not long ago, except that sales value of small-scale flexo polishing machine and packaging equipment increased, other offset, polishing, and post-print equipment did not increase basically." Economic efficiency index of Shanghai Charity from the first to third quarter in 2008 dropped 25% compared with the same period last year, the company now has been reduced the production of quarto and more low-speed devices and other production of small-scale equipment maintain stable basically, furthermore, they strengthen the R & D of new equipment of high-speed, high-performance, cost-effective.
"With the evolving financial crisis, people are more cautious to investment, which is the most obvious impact on sales of machinery." said by Zhang Sitong, who is in Technology Development Department of Beiren Group, Printing machinery Industry in Beijing and Shanghai has declined alarmingly. The growth rate from January to July in Beijing is -27% and -54% in July; The growth rate from January to July in Shanghai is -5.85% and -17% in July; Due to the price frustration of steel in 2008 as, it is expected that price of printing equipment in 2009 will be lower.
According to the analysis of reasons why the printing machinery manufacturing industry was affected, we find that the from the margin of paper price rise in early 2008 is too large, and laid potential problems for printing companies and related industry development. The high price of newsprint caused short cycle and high speed of enterprise revolving fund, a large number of customers have to hoard paper and squeezed money on paper, which leading to lack of funds and can not afford to procure new equipment to expand production. In addition, some enterprises’ equipment utilization ratio is low, and actual use range of some high and medium grade equipment is just limited to a single variety of print work. In the mid-year, rising labor costs, production costs and other factors has further strained the problem of enterprise fund; RMB appreciation and change of export tax rebate rate have a direct impact on profits of foreign trade enterprises. Those enterprises want to expand production in 2008, small and medium-sized enterprises can not afford to bear alone due to the impact of bank deposit reserve ratio hike and application of the bank loans.
At the same time, the price hikes of steel in the previous period also led to the printing equipment manufacturing industry suffered two pincer attacks. On the one hand, rising prices of raw materials, and product price can not float in the short term; on the other hand, the decline in the purchasing power of customers, which has a direct impact on product sales.
For this reason, Shanghai Charity Machinery Co., Ltd has made a number of measures to deal with. Such as through making efforts to strengthen management and skills to ensure benefits: the company carried out a series of ISO9000 quality system standard certifications at the same time of stable production, which in order to strengthen quality control, focus on new product design, research and development and accumulation of experience of product market. Regarding product promotions, advocacy model has changed from the previous paper-based media to web-based media and activities with the advertising model, said by Liu Ying, which is also in order to adapt to the changes in the market, low-speed devices is easy to be eliminated, new product life cycle has shortened, companies hope to respond to changes rapidly in the market by network media.