These events are indicative of the level of the threat facing the sector. There is a solution, but it does not lie with the printing community alone: if publishers and print buyers want a sustainable UK supply base, they need to understand the issues and work with us to make it a reality.

Other manufacturing industries are being supported by their customers. Government data reveals that while UK manufacturers’ input prices have risen by 17%, output prices are also up, by 5.3%. So around one-third of the increase in input costs is being passed through the supply chain. Meanwhile, in print, costs have risen by around 30%, yet prices have remained static at best. Print has been its own worst enemy – obsessed with chasing volume at any cost in order to fill cheaply-financed machinery. Volume isn’t the answer; in fact, at today’s market price an increase in volume simply increases losses.

Our sector has taken drastic action to survive with employees often bearing the brunt. At Wyndeham, we have aggressively cut costs to remain viable without having to look at increasing prices, but the reality is that material and energy cost increases now far outweigh the cost-cutting measures. And if this is the case for us, as the largest web offset printer, it will almost certainly be so for our competitors. The sector is already heavily loss-making and increases in input costs are exacerbating these losses. As these pressures work through the system, compounded by ongoing volume decline, it is inevitable that there will be more web offset casualties coupled with further reductions in capacity.

Sea-change in strategy
The upshot of all this is that print prices must increase because the sector is not sustainable at current levels. While customers may find this hard to stomach at first, it is essential if there is to be sufficient capacity to meet their requirements. In future, the most important question a print buyer will need to ask is not ‘how cheaply can I buy?’ but ‘how can I achieve the security of supply that enables me to continue to publish?’ This scenario represents a sea-change in purchasing strategy and will only be implemented if the awareness of this issue is raised and a genuine supply chain partnership approach is adopted.

As the largest UK web offset manufacturer, with a modern equipment base and blue-chip funding, we are ideally positioned to provide the security of supply which will increasingly become a priority. We have started a dialogue with our customers and believe that this message is being understood. We are at a defining moment for the sector, as the outcome of these discussions will define the future of the industry. The question is how many other web offset printers are implementing a similar strategy?

Paul Utting, chief executive, Wyndeham Group