Last month, in a move that surprised much of the paper sector and sent eyebrows skyward across the rest of the printing industry, merchant Paperlinx announced it was moving into the consumables market, linking up with Agfa Graphics to sell plates, chemistry, hardware and software.
While paper merchants have been extending their product ranges to include some non-core products for some time, this represents a much more radical departure.
The decision seems more unlikely, coming as it does so swiftly after the collapse and resuscitation of Litho Supplies (5 January). Despite Litho Supplies’ Lazarus-like resurrection, Paperlinx’s arrangement with Agfa still stands. But will this departure from its core business pay off for the paper merchant?
Strong market position
Paperlinx is a force to be reckoned with in the merchant market; through its operating companies, Robert Horne, Howard Smith Paper and PaperCo, it holds around a 50% market share. Paperlinx will sell the Agfa products through its Total Print Supplies (TPS) division, which was launched last November.
Starting from such a strong position, it is perhaps unsurprising that the company has territorial ambitions beyond the paper sector.
For example, TPS has teamed up with waste collection and disposal specialist WasteCare to provide a disposal service for spent pressroom consumables.
According to Paperlinx, TPS’s prospects are encouraging. The company says that the first phase of the regional roll-out, in which PaperCo and Robert Horne began offering consumables, has been very successful. The products are delivered to printers as part of their normal paper delivery, an approach that TPS business development manager Steve Brading says will be viewed as revolutionary for the print industry.
Printers are seeing the benefits of bundling their paper with their litho consumable requirements, he says.
Among the products that TPS will stock are Afga’s Azura TS and Lithostar plates. Brading explains that the addition of the pre-press range was a logical extension to complement the group’s current offering and that Litho Supplies’ difficulties provided an impetus to get into the consumables market.
We believe that our timing is ideal, in light of recent events in the graphic consumables sector because commercial printers are looking for a secure and dependable supplier for these business-critical products, he explains.
According to Brading, there is a gap in the market for a national supplier offering a full logistical service, technical support and the range of products.
Despite this optimism, Paperlinx’s announcement has provoked some fierce criticism from rival suppliers. Stehlin Hostag managing director David Ward for one wonders how a paper merchant can successfully provide the service levels to deliver pressroom consumables – a sector in which the company has no history or experience.
It is a complex marriage of products, not just a logistical network offering, he says. Printers are looking for support and I don’t believe the merchants can offer that. They aren’t manufacturers. Printers deserve to be working with partners that can offer the necessary support.
Brading counters this argument, insisting that Paperlinx has invested heavily in pressroom technical expertise and that customers will be offered expert advice on the right choice of product for the best print result. He says the success of TPS is down to recruiting the right people and partnering up with a supplier in order to get the extra support.
While the recruitment process has been quite lengthy, we are committed to getting qualified and experienced people on board, he adds. We are linking our technical expertise in paper and plastics directly with ink, chemistry and plate manufacturers.
Technical expertise
To this end, the company’s technical team has joined forces with ink giant Sun Chemical and together they are running a number of ink and paper trials that will identify the best product combinations and contribute to product development.
As for Paperlinx’s lack of experience in this field, the company’s North American paper merchant, Spicers, has been selling consumables for more than 10 years. Dave Allen, vice-president of Paperlinx Europe, says: We have taken their pre-press and pressroom expertise to another level with a range of software-based colour management and workflow options. We are tapping into this resource to see what else we can bring into the UK market.
At the moment Paperlinx is ploughing this furrow on its own – most merchants aren’t keen on moving into the press consumables market. A spokeswoman for Antalis and James McNaughton explains that its not a business it wants to get into Our main focus is on paper distribution and providing customers with their paper requirements first and foremost, she adds.
Elliot Baxter (EBB) is another that’s steering clear of supplying consumables, stating that it has no plans to do so in the near future. Chris Sandwell, EBB sales and marketing director, warns that merchants could be in danger of becoming a jack-of-all-trades and, probably, master of none.
We have already seen merchant stock inventories fall over past two years as they are under pressure to reduce working capital, he explains. Additional stock products in new areas will dilute paper stocks still further and lead to a decline in service levels. Sandwell adds that EBB is focused on being a paper merchant that offers consistency of product, service and stock availability.
Denmaur Independent managing director Mike Gee also has no intention or desire to get into the consumables sector. We are staying very much focused on our core paper business, he says.
While Paperlinx’s rivals question the wisdom of moving into consumables, one paper merchant has already successfully diversified in this area. Rosefox Paper stocks a range of products from imagesetter film to CTP products, blankets and inks (see below).
Printing supplies manager Malcolm Diggles says that, with a distribution network and customer base already in place, merchants supplying consumables is a natural progression.
However, he warns merchants must act responsibly and supply quality products with a technical back-up. They must not undermine an already fragile marketplace, he says.
Rosefox and Paperlinx have taken the view that diversifying into consumables is right for their businesses. Paperlinx’s share of the UK merchant market suggests that it is well placed to deliver essentially a one-stop shop for paper and consumables.
Others will watch with interest how this develops over the coming months. Only time will tell if this is a move that sparks a change in the face of UK merchanting.
ROSEFOX
Rosefox Paper is no newcomer to the consumables market. Based in Preston, this family-run paper merchant, part of the Aims group, diversified more than 19 years ago – a move that it has not regretted. We have gained a reputation for offering quality products into the marketplace combined with a speedy and efficient service, says printing supplies manager Malcolm Diggles.
The company has worked with several suppliers, including Agfa, Vanson and more recently Glunz & Jensen.
What makes the difference, says Diggles, is that Rosefox can offer a more personalised service to customers, unlike some of the larger suppliers or distributors.
We will find out what the customers need and offer products that are going to help their business move forward, he says.
This is one of the reasons we have been successful supplying consumables, as we are not just after a quick sale. We are in it for the long term and we will keep offering new innovative products to our customers.
The upshot is that Rosefox now deals with some customers purely for consumables, quite an accolade for a company that is, by trade, a paper merchant.
We are seen by suppliers as a genuine consumables supplier to the trade, adds Diggles.
