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          The printing industry is transforming into green and digital

          Author: ComeFrom: Date:2019/5/14 10:50:31 Hits:235

          Affected by multiple factors, the printing industry has been in a downturn in the past two years. A large number of small and medium-sized enterprises have been in a difficult business situation. The orders have decreased, the operating rate has decreased, and the trend of profit decline has intensified. The industry is entering a transitional stage, and market risks must be highly valued.

          Under the background of slowing domestic economic growth and promoting diligence and thrift, printing demand for packaging and decoration has dropped significantly. Under the influence of the trend of electronic products gradually becoming the mainstream media, traditional books and periodicals have been replaced by a large number of books, and the demand for book printing has declined accordingly.

          In recent years, labor costs and raw material prices in the printing industry have been rising, and printing costs have been increasing. The traditional printing production cycle is long, and the time cost burden of enterprises is also large.

          Currently, digital printing and green printing have become the mainstream trends in the industry. In recent years, the "Digital Printing Management Measures", the standards for digital printing classification, and the three green printing standards for lithographic printing, commercial paper printing and gravure printing have been issued, and the green printing of primary and secondary school textbooks is required to be fully covered. According to research institutes, the proportion of digital printing will rise from 0.4% in 2011 to 14% at the end of 2015, and the proportion of green printing will reach 30% by the end of 2015. While the digitization and greening process in the printing industry is accelerating, technological competition has intensified and the industry has accelerated adjustments.

          The purchase and printing technology of printing equipment requires a large amount of capital investment, and the price of raw and auxiliary materials that meet the green standard is 20% to 35% higher than that of ordinary materials. The weaker printing companies were unable to afford the high cost of digitization and greening, so they were eliminated. With strong production organization, advanced printing technology equipment and cost advantages of large-volume procurement, the printing enterprises with stronger strengths have increasingly concentrated their orders and realized a virtuous circle of operations.

          According to statistics, there are more than 400,000 printing enterprises in China, of which nearly 80% are SMEs. In the past two years, the number of small and medium-sized enterprises has decreased drastically, and even in the Pearl River Delta and the Yangtze River Delta, there has even been a “downturn”. SMEs face greater risks in the transformation of the printing industry:

          Overcapacity risk. The sharp decline in printing demand has led to relatively small and medium-sized printing companies to maintain turnover with scattered orders and low profits, and the operating rate is generally less than 70%. Small and medium-sized printing enterprises lack bargaining power, and marketing and collection are difficult. The losses caused by the withdrawal of orders and orders from upstream orders companies are mainly borne by the printing companies themselves.

            investment risk. In order to avoid being eliminated, SMEs purchase digital printing equipment or modify printing systems through debt. However, large equipment investment has increased financial pressure, and investment decisions may lead to a broken capital chain. Affected by factors such as industry trends, credit scale restrictions and low mortgage rates for printing equipment, it is difficult to obtain sustained and sufficient financial support through conventional financing channels such as banks. Some enterprises have turned to high-risk investments and even involved private lending.

          The industry chain expands risks. Some innovative small and medium-sized printing companies have begun to transform from processing services to creative design services, adding value-added products by providing customized, contented and differentiated services, chain printing, web printing, packaging design, (convention services, etc.) The upstream and downstream industry chain has been continuously expanded. However, most SMEs have not yet formed an effective profit model, often losing their view. Source: Urban and Rural Financial News)

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