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Print, publish, project! - Dec 28, 2004 (BT)

BackDec 28, 2004

The Straits Times / The Business Times News On SPH

Print, publish, project!

While prospects for the local printing industry remain good, JOYCE KOH finds the companies aware of the need to work smarter and to rely on foreign business.

By Joyce Koh
Dec 28, 2004
The Business Times

THE festive season is upon us again and behind the flood of calendars, organisers and magazines piling up on our tables is a surprisingly resilient printing and publishing industry here.

Against competition from low-cost regional countries, local players have managed to stay ahead of the game by banking on their quality and service to draw in more overseas clients.

Indeed, printing and publishing is a sizeable industry with over 900 establishments employing about 24,000 people, and chalking up $1.5 billion in value-added contribution in 2002.

Singapore's print exports came to about $670 million last year from key markets in the US, UK and Australia. And according to IE Singapore estimates, many printing companies here earn at least 70 per cent of their revenue from abroad.

And no wonder - since the delightful pop-out books, glossy coffee table books and lovingly binded encyclopaedias are all highly sought after for the skill and expertise that goes into producing them.

Singapore's efficient port facilities, customs clearance and strong intellectual property protection also ensure that a gamut of magazines from Newsweek and Time to The Economist and Forbes International ? which incidentally are printed by Times Printers - arrive promptly every week.

Satvinder Singh, assistant director of business services at IE Singapore, said: 'Even as these printers expand and seek new markets, we are seeing that they keep their headquarters in Singapore, retaining their HQ functions locally and using their Singapore plants for higher-end, more time-sensitive print jobs.'

Even so, local printers are certainly not denying it will be a tough road ahead to grow their business.

'Worldwide and locally, pricing has been trending downwards because there is more supply than demand,' said CS Graphic's managing director Lee Sian Tee. 'I've heard there is an excess of 15 per cent in printing capacity, and when China starts coming into the business, this will put more pressure on pricing.'

Indeed, one of the more established printers in town, 70-year-old Tien Wah Press, said that while industry prospects remain good, competition is becoming more intense with pricing 'the essence'.

To stay ahead, Tien Wah - which was one of the first printers in the world to come out with pop-out books - said it banks on high-quality service and cutting-edge technology.

'Once we get an order from a customer, we don't just wait for instructions but we suggest how to maximise their print run and sizes, as well as innovation in their end product,' said its sales and marketing director Andrew Yeo.

With its production plants in Singapore and Malaysia churning out sales of $200 million a year, the company gets about 95 per cent of business from overseas.

Meanwhile, 18-year-old CS Graphic, whose business is entirely from outside Singapore, said that while pricing pressure is definitely felt from up-and-coming low-cost markets, the company is meeting the challenges head-on.

Size matters, said its MD Mr Lee, and the company will be doubling its capacity in Singapore over 3-5 years because 'if you're not big enough, it is difficult to compete in this capital-intensive industry'.

His $21 million-a-year company prints about 300,000 books a month for a high-end clientele which includes Thames & Hudson and renowned museums like The Metropolitan Museum of Art in New York and The Art Institute of Chicago.

Of course, another strategy in the printing world is to capitalise on strengths which have served the company well through the times.

Lim Chin Tong, chief executive of Xpress Holdings, said his company tries to provide an extra value-added service by participating in every step of the printing process from design and layout to printing and distribution.

'We are in a tough industry, so what we have to do is to constantly look for new niches in the financial industry, or any niche that capitalises on our strength - which is in low volume, high mix and quick turnaround printing,' said Mr Lim.

Xpress - which prints financial documents like stockmarket reports, IPO prospectuses and annual reports - is already active in the region with a third of its sales from overseas.

Going forward, Mr Lim said he will outsource backend jobs like preliminary design and is open to M&A opportunities to expand, but he maintained the bulk of the printing will still be done in Singapore because of the need for a quick turnaround.

Overseas market

Just like local printers, publishers here also have to carve out a niche for themselves as they cater to a more fickle readership and reach out to more markets abroad.

Popular Holdings plans to focus on educational publishing, where growth is about 10-15 per cent - compared with trade book publishing, where growth is only about 3-5 per cent.

'Our strengths lie in bilingualism in publishing and retailing,' said Isa Wong, Popular's CEO of Hong Kong, China and Taiwan operations. 'With China getting more influential, topics related to the China market are becoming a lot more interesting to overseas Chinese in Malaysia, Taiwan and Hong Kong, and there is very substantial growth in this area.'

Ms Wong said the key to success is whether one has good control of the market, and to that end, it is trying to build up its distribution network in China. Already, it has 100 proprietary stores and 300 alliance bookshops in the country.

As for magazine publishers like Blu Inc Media, they say that even as they keep up with readers' more demanding tastes, they remain firmly rooted in Singapore.

'It (Singapore) is an innovation centre for publishing and the test platform for many local and international titles in the region,' said Blu Inc's chief operating officer Wee Hian King.

With magazine publishing in Singapore having achieved international standards, Mr Wee added: 'We have the resources with the know-how and the competencies to take magazine publishing into the region ... the timing is right as the magazine markets in the region have gradually opened their doors to foreign publishers.'

Blu Inc publishes magazines like Female, Nuyou, Torque, Seventeen and Men's Health.
What about Singapore Press Holdings (SPH), which has a firm foothold in local newspaper publishing?

Indeed, SPH is not immune to rising newsprint costs and the vagaries of economic conditions. But it continues to stay abreast of readership trends by investing in making its products more palatable and attractive, said Cheong Yip Seng, editor-in-chief of SPH's English and Malay Newspapers Division.

After the recent consolidation in the media industry which staunched some $40 million losses from SPH's broadcasting division, Mr Cheong said developing trends in the industry like the purported move towards tabloid-sized newspapers is unlikely to affect SPH.

'The move to compact edition was born out of desperation when European newspapers found sales dropping dramatically, so they responded by this very drastic move to change from broadsheet to tabloid,' he noted.

'We are not in crisis, so there is no need for us to resort to this since there are many implications for the move. The jury is still out on whether this is a plus, and we are watching the development very closely.

'But I don't think this is going to be a worldwide phenomenon, and I see no advantage in ST (The Straits Times) or BT (The Business Times) going tabloid.'