Innovation Critical for Kickstarting and Maintaining the Industry’s Recovery
In an exclusive interview with Print Pack, Andy Thomas-Emans, the Strategic Director at Tarsus (Labels, Packaging, and Brand Print Group), the organisers of Gulf Print & Pack, speaks about the opportunities, challenges, the COVID-19 impact, tips for recovery and so on.
What are the opportunities for the printing industry in the region?
The region is ripe for opportunity. According to Smithers (previously Smithers Pira) consultancy, the region’s 1,700+ printers have a proven investment culture and stay up to date with the latest machinery and materials developments. The region is fast adopting digital technologies, which is opening up exciting opportunities for enhancing business processes and capabilities.
The switch to digital platforms and technologies will, however, not only require new investments, but human resources with the appropriate skills. Certainly what we saw at our 2019 edition of Gulf Print & Pack (GPP) were solutions in abundance to this issue, such as automation of the whole workflow, from order-taking to print production, invoicing and logistics; and routes to increasing efficiency and reducing waste.
The UAE in particular also has the advantage of being the region’s major printing hub with Dubai Production City (aka IMPZ), and Sharjah Publishing City is now a prominent service center for an increasing number of print equipment manufacturers operating throughout the Gulf world and beyond.
The industry is certainly growing. The MENA printing machinery market was worth $446.1 Million in 2017 and is forecast to reach $545.7 Million by 2022. By that time, over 13.46 million tonnes of print materials will be consumed in the region. Pre-COVID-19 figures published by Smithers showed that print revenue in the region is growing at 8.7 percent year-on-year against a global growth rate of just 1 percent, and will hit a value of $40.7 Billion in 2022, up from $32 Billion in 2019.
What sort of print jobs are in demand in the region?
Currently, the highest demand is for packaging and label printing, particularly for pharmaceuticals. As a trend, we have seen many commercial print houses upgrading their equipment inventory to cater to the packaging and labels sector in the past few years. This proved a good move for those who made the change, as the commercial print was hit hard by the pandemic. Most printed publications including newspapers were hit hard, whereas labels and packaging have shown steady growth.
Players from the large format field have seized the opportunity to work on social distancing graphics and displays, including information stickers and posters, floor tiles, etc to help the general public stay safe and keep a safe distance. 3D printers in the region have also started to help out by creating face shields, goggles, and more customised solutions, and have really taken off in the region.
Which markets according to you are the most upcoming in terms of opportunities and demand?
The MEA region has an overwhelming youthful demographic driving print growth and creating opportunities for short-run customized and personalized packaging. Some 60 percent of the Arab population is under 25 years old, making it one of the most youthful regions in the world, with a median age of 22 years compared to a global average of 28. Looking at contiguous markets, Africa has the youngest population in the world, and it is growing fast. By 2055, the continent’s youth population (aged 15-24), is expected to more than double.
According to you, has the lockdown due to COVID-19 had any impact on the printing services sector?
Yes, certainly – the whole supply chain has been impacted, particularly in retail, and this has hit PSPs hard who were not deemed ‘essential’ services. Packaging and labels suppliers were able to make a claim to be part of other essential industries such as pharmaceuticals, food, and drink, so in many cases were able to keep working.
But these converters and printers needed to adapt quickly; reconsidering plant layout and social distancing, staffing, implementing a more robust cleaning/sanitization regime, temperature testing, split shifts, and non-contact delivery scheduling. In some cases, printers have housed staff on site to reduce COVID-19 spread. Some printers have taken the opportunity to diversify their product offering into critical industry sectors. On the supplier side, equipment manufacturers have implemented remote customer service and training packages because engineers cannot travel.
Travel restrictions have of course posed logistical challenges and bottlenecks in moving equipment, components, and supplies, so international sales will inevitably have seen a dip, delivery lead times are longer, and some products remain in short supply. Generally, however, the supplier industry has remained remarkably resilient in keeping the supply of materials, inks and other consumables moving.
What sort of demand has been seen in the e-commerce/home delivery sector in terms of printing, signage, and related services?
The use of e-commerce and internet shopping has been growing rapidly throughout the region, and particularly these last few months. This is opening up opportunities in ‘smart’ tracking labels and secure documentation, along with innovative returnable packaging, printed consumer communication pieces, and logistics management.
This also requires secure shipping and warehousing systems. As a key regional trans-shipment hub, Dubai has seen massive investment in port, airport and warehousing facilities, and this has created a growing market for VIP (variable information) print+apply and secure documentation systems.
What do you feel about sustainability and green technologies?
Sustainability is now hard-wired into brand procurement requirements, and at the same time governments throughout the region are implementing increasingly tough regulations to promote recyclability, reduced greenhouse gasses, and cut down the amount of packaging in circulation. Suppliers have responded with a wide range of new technologies and services which have hooked into global sustainability programs like FSC/PEFC certified papers.
We have also seen the down-gauging of plastic films, the introduction of more recycled content into a wide range of packaging and print materials, and the reduction or elimination of VOCs from more parts of the print production process. Whereas in the past these were ‘nice’ things to do, today they are absolutely essential if PSPs and packaging converters want to work with local and global brands.
What are the challenges of this industry?
I have already mentioned the challenges presented by the COVID-19 pandemic and by the need to comply with the sustainability requirements of brands and governments. We should also mention the issue of profitability faced by PSPs in commodity print markets – which has to be tackled by diversifying into a niche, added value markets – the continued difficulty in finding skilled production staff, and the continued increase in raw material and other related costs. Increased online consumption of news, books, and magazines is something else the industry has to tackle, by developing new, higher value-added print applications which link to online resources.
According to you which job segments are seeing the growth?
Books are a great example of how print is not only holding its own against digital downloads but actually bouncing back. Digital presses – both toner and inkjet – allow publishers to adopt completely new business models based on higher unit value, low volume print runs. This means they can reduce inventory and risks by ordering multiple short-run reprints on demand. And this in turn offers new opportunities for commercial printers adopting digital print and finishing technologies.
Key growth segments of the on-demand book trade are children’s books – often with elaborate finishing – and educational books, as schools, colleges and universities look to keep pace with ever-growing student numbers across the MEA region. As mentioned, this part of the world has an overwhelmingly young, and increasingly literate, consumer demographic.
Newspapers and magazines still represent over one fifth of total print volume in the region, and digital print is enabling a new breed of specialized periodicals to flourish. The consumer demographics driving growth in on-demand book printing are also driving growth in poster and billboard advertising and retail point of sale (POS). These applications all require the latest wide format inkjet printing and finishing technologies.
And as mentioned earlier, packaging and labels across all categories continues to grow across the region. One potential boom area is inkjet printing direct to corrugated, particularly for items delivered by internet shopping and for point of display units found at major retailers across the region.
Another key trend is for retail product shipping case to double as a display case on the shelf, and this requires that the colors on the corrugated case match the brand colors of the consumer items they contain. This in turn requires a new generation of digital print technology and color matching software. Digital printing of fabrics and textiles is also growing across a wide range of applications, from personalized wallpaper to corporate furniture and exhibition stand coverings, and now moving into personalized fashion items.
Another area seeing increased demand is in 3D printing (otherwise known as Additive Manufacturing). In Dubai, for instance, the government has made Additive Manufacturing a key strategic area for the country’s development, and, increasingly, PSPs are finding new business opportunities to complement their traditional print business. For example, they are offering consumer-oriented promotional items such as 3D prints of family members to go alongside digital photographs. Some are supplying prototype tooling and an on-demand spare parts service to local manufacturing and logistics businesses.
What are the factors impacting the retail printing market?
The MENA region is a market where luxury brands are pre-eminent, particularly in the increasing number of malls and for online delivery. This not only requires a high level of POS presentation graphics and display casing, but also requires innovative solutions to the huge rise in counterfeit goods and diversion in the supply chain. Innovative solutions to this include foil stamping, holograms, variable coding, invisible inks and guilloche printing. These are all fast-growing areas within retail printing.
I already mentioned other key trends such as the increased importance of high quality, short-run, colour-managed corrugated displays of all kinds, from the end of aisle display units to on-shelf display cartons. In addition, there is a wide range of both indoor and outdoor graphics used to support branded goods in the store and available online – another good example of how printed collateral works to promote sales in the online world.
What opportunities are present in the retail printing market?
Consumers – particularly the younger demographic – are increasingly looking for an enhanced in-store experience, which links with their ‘online life’. This has created a highly competitive market for digital branded print – everything from POS, point of purchase, to labeling and advertising, often linking to online resources through the use of RFID, NFC, QR codes and Augmented Reality (AR). Also, as mentioned above, the battle against counterfeiting of a wide range of consumer goods has created a burgeoning industry and some interesting opportunities for diversification.
Are cloud-enabled digital workflow services adding value to the overall workflow?
The COVID-19 emergency has seen a rapid move of work from offices to domestic settings, and this has required the rapid rolling out of secure, cloud-based workflows between outworkers and physical production hubs. This has happened across a whole range of occupations from sales to customer service, accounting, equipment troubleshooting, and marketing. Post-pandemic it is certain that companies will want to build on these new ways of working, both internally within print operations, and in communicating both with their customers and their supply chain. Another interesting effect of the pandemic has been increased automation of print factory equipment and the ability to download jobs and monitor activities remotely, all of which have propelled the print industry more quickly towards Industry 4.0 automation.
What role will printing play in the post-COVID-19 workplace?
Perhaps one surprising result of the COVID-19 pandemic has been a renewed requirement for print as societies come out of lockdown. All workplaces, and not just retail outlets, will require printed signage indicating safe working distances, one-way traffic flows, the maximum number of people in confined spaces, and so on. This is likely to mean a boom in smart wide-format print work. This will not only impact indoor graphics and signage. Street furniture, bus-stop graphics, parking spaces, and a host of other outdoor print requirements will emerge over the coming months.
Do you believe Device-as-a-Service offerings bring value to brand owners?
We have witnessed this on a small scale with FMCG and retail giants, but the potential is also there for office-based and smaller production printers (such as A4, A3 MFPs). The larger digital production printers were provided as a DaaS service to SME PSPs and took off in a lucrative way a few years back. But due to the reduction in commercial print revenues, this is on the wane. In addition, using DaaS for final proofing etc will be challenging in this part of the region as human to human interaction between brand owners and print houses is strongly embedded.
How will the Gulf Print & Pack (GPP) show help the print industry’s recovery?
GPP plays a key role as the go-to event which connects industry buyers with the global print brands in the MEA region. Being its largest and longest running industry show for commercial, labels and package printing, GPP is the place suppliers choose to show new innovations and product launches. It is these technologies – automation, higher productivity, sustainable solutions – which will help drive the regional print industry back towards profitability.
This is not the first time GPP has been at the forefront of such a rescue. After the 2008 economic downturn, the subsequent edition of GPP in 2009 helped the industry adopt more efficient solutions to increase productivity and reduce waste. GPP 2015 was another example, where lower capital intensive and higher productivity machinery were showcased and a record number of deals and visitors flooded the show.
GPP 2019 introduced the Print Décor Lounge where visitors learned how to add another income by working on indoor décor using their existing machinery, or adding a few accessories to cater to a completely different but lucrative segment. The GPP team, together with its advisory board members and media partners, will be exploring key customer territories armed with education as an offering in 2021. The cities of Riyadh, Dammam, Jeddah and Cairo, plus Nigeria and Kenya are among the places where we plan to explore and understand the print industry needs and wants to better deliver a tailored array of solutions during the GPP 2021 expo. This is scheduled to take place between 14-16 December 2021.
Right now, the industry needs to think creatively around short and longer-term solutions for its future. Our shows, such as GPP, are key platforms for showcasing the latest print technologies and trends, and as such, will enable that thinking to really flourish. Printers/PSPs will gain a unique insight into the synergies between packaging and commercial print, and discover how creative thinking can be applied. Innovation is going to be really critical to kickstarting and maintaining the industry’s recovery, and the show is an opportunity for the whole industry to come together and collaborate on the best solutions that support that process.