The wide format opportunity

Neil Falconer -Print Industry Strategy Consultant and MD of Printfuture.com

Neil Falconer -Print Industry Strategy Consultant and MD of Printfuture.com

[GUEST BLOG]

Want to see your profit margins grow in 2013/14?

Want to find new applications with real growth potential?

Want to gain both above without major capital investment?

Want all your pigs to fly?

 

Yes I realise that implying there is a simple answer to the first three objectives encourages a large pinch of cynicism. But this blog and the associated fuller paper is to encourage you to look seriously at the wide format market. And for those of you already in that market in a small way eg with a plotter for drawings and maps, it is to encourage you to develop the sector more actively.

At the end of June, the Excel centre in London hosted FESPA 2013, a wide-format extravaganza that gave the lie to the pessimism that characterises much of commercial print today. In the excellent ‘Widthwise’ annual survey of wide-format printers published by Image Reports just before FESPA, a staggering 39% of the 223 respondents stated that their profit margins had grown in the last year and only 19% had seen it decline. Would that were true of the rest of commercial print!!

Furthermore those in the sector intend to grow, with 49% planning to recruit more staff and 40% intending to purchase more wide-format kit in the next two years. So what is preventing you from joining the trend? Let me suggest the following.

Lack of demand?

Well of course you know your customers better than anyone [I hope!] and they may not have a need for wide-format print but I should be very surprised. The staggeringly large range of applications means that virtually every consumer or business is going to be purchasing something in wide-format print sooner rather than later.

Too much competition?

Print history is littered with markets/applications/technologies that started out attractive but then sucked in more and more printers. As a result margins just went down and down. Surely wide-format is no different? Of course not and it was generally acknowledged that the rate of growth in the Sign and Display market in the UK and arguably in much of Western Europe is slowing. But please note slowing, not stopped or contracting [remember the statistic above on growing margins]. What is more, the applications are constantly widening with faster and wider machines, new inks, new drying methods, and new substrates fuelling the growth.

Too high cost of entry?

Entry level machines are under €12,000  incl. RIP. Mathew Drake of Roland quotes a market price of c € 48 a sq. mtr. and a substrate/ink cost of c. € 3.6 a sq.mtr. so there need be only a modest level of demand to start to cover initial investment. And yes, I do realise that a low cost of entry will encourage faster erosion of margins, but so far market growth has outstripped capacity growth.

Lack of expertise?

Now that is more challenging, as there is no doubt that like every technology, there is expertise that needs to gained or recruited.

Overall there is a very strong case to invest or further invest in this market.

To find out more, read our Article – “Opportunities in Wide Format”

This is available from Ricoh Business Driver or, if you are not a member, request it here.

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