The investment is based on contracts won in the banking, insurance, retail and telecoms sectors printing full-colour personalised marketing on bills and statements.

The company claims that using its system can improve response rates from the 2% typical of DM to 18%, as well as cutting production and mailing costs.

"People tend to read a bill in the way they don't read direct mail," said DSTi Output chief executive Tim Delahay.

Delahay said the firm was talking to one customer about reducing its annual 6m spend on billing and 40m DM spend by 30%.

"By combining some campaigns and reducing inserts and mail shots we can offer a service that cuts costs by 30%," he said. "And that's before measuring any benefits and uplift. It's an exceptionally compelling argument."

DSTi is building a state-of-the-art factory in the Midlands to more than double its capacity, which joins its Bristol factory.

Work starts on the 10,000m2 20m site in August. It will be kitted out with another 20m of equipment, including Kodak Versamark colour digital webs, Xerox DocuColor cutsheet colour machines and mono sheet and web machines, as well as inserting and mailing kit. Initially the site will employ 120 staff, but that number is predicted to grow in time to 400.

Investment in the new facility follows a 10m spend on its Bristol site which included the world's first 4/4 Versamark and additional Pitney Bowes mailroom equipment. The 4/4 Versamark joined a pair of
4/1 machines ordered at Ipex 2002.

The firm developed its HiOutput product, which eliminates pre-printed stock and adds full-colour personalisation for GE Capital. DSTi Output was formed by DSTi to buy GE Mailing Services, its transactional print and distribution centre, in 2002.

Story by Barney Cox