Herald Printers: Old family company finds new direction

Avia Collinder, Business Writer

Herald Printers needed a game-changer. The company had survived eight decades but found itself struggling as the economy tanked at the close of the last.

By January 2009, revenue had slowed and the family-run company was experiencing "consistent losses" over that period. It was by no means alone. Right across the printing industry, as former loyal customers themselves sought to cut costs by going paperless, profit margins were also dwindling.

At The Herald Limited, it forced a restructuring that is still ongoing and the development of key areas of services to compensate for lost income. It required a new way of thinking and has brought some positive results.

"We are showing slight improvement in the very difficult area of aged receivables influenced by the overall economy at this time," said Managing Director Rodger Brown.

But the company, which has also been around since 1922, also considered itself lucky to have been selected as one of 30 candidates for the FamBiz project run by the Private Sector Organisation of Jamaica (PSOJ) with backing from the Inter-American Development Bank (IDB).

Herald Printers may have been around for decades but the company still has a youthful appeal.

Brown describes himself as second-generation management of the family company. He took over the running of the business from father Kenneth 'Teddy' Brown, who in 1979 acquired it from another family - the Richards.

The implementation of strategies outlined by Fambiz consultants and new company advisers have resulted in noticeable improvements in the company's cash-flow position, he said.

"The Fambiz project was very timely, as the owners and management were seeking out information and assistance to implement a formalised structure for the organisation. Also, the main issue of proper succession planning was raised and considered, as this sensitive topic is, most times, overlooked and not addressed in many family businesses," Brown told Sunday Business.

"We were able to assess, adopt and implement some corporate governance strategies that have yielded positive results in our overall performance and operational efficiency."

Brown did not disclose income but said Herald is among players making more than US$1 million in annual revenue. He currently employs about 40 full-time and part-time workers, but staffing has risen as high as 56 in the past and fallen as low as 31 as market conditions changed, he said.

"The digital age is here so the staff complement is a lot more computer-savvy than in years gone by, when printing was done by older methods and differing demand in the market," he said.

Herald Printers was incorporated in 1922. Originally dubbed 'Temple of Fashion Printery', it was located on Tower Street and provided letterpress and publication services to many business and individual customers at that time.

In the late 1960s, the printery moved to its present location at 43 East Street, where it transitioned to offset printing and later expanded its lithographic print services and products.

During its near 90-year history, the Herald has transitioned into the digital era of graphic design, marketing and print consultancy and a full range of digital and offset printed products.

Operational demand was once mainly commercial print needs, goods and product control sheets, such as requisitions, purchase orders, invoices, receipts and other carbonised and non-carbonised forms, pads and books.

demand changes

Today, the demand has changed based on the advent of digital systems to control and reconcile, as well as digital printing and personal computing which have reduced the traditional areas of print.

Demand has shifted in recent years to short-run colour prints of one to 100 copies - "they are purchasing as need arises ... instead of stockpiling letterheads, envelopes, brochures, etc" - as well as packaging, with a steady demand for magazines and publications, Brown said.

The need for the company to retool and keep abreast with the market has led to higher operational costs. Currently, for The Herald, marketing items such as flyers, brochures, posters and point-of-sale promotional material are best-sellers.

"We are very competitive in this segment, and our quick turnaround time with other value-added services makes us very attractive to customers. We also have the ability to do high-quality printing and finishing," said Brown.

This has attracted clients, including Wealth Magazine and Kingston Kitchen, for which Herald is the exclusive printer.

Its primary costs are in overheads and raw material, with the latter presenting a special challenge. All raw materials used have to be imported and costs vary with market conditions.

"Overheads and capital acquisition costs are still high and restrictive and, as such, makes it difficult," Brown said.

The company's markets straddle the public and private sectors, including National Housing Trust, banks such as EXIM and First Global; hotels such as Grand Palladium Hotel and Iberostar, as well as firms in the business of marketing and communications.

Principal competitors include, but are not limited to, other lithographic and print shops, such as Hot off the Press, BCNS Printers, Mapco Business Printers, Lithographic Printers and Phoenix Printery. Herald is the oldest of them.

affected by recession

The company since January 2009 has been affected by the global recession and rising fuel costs, which have contributed to high electricity and other utility bills.

The ongoing restructuring and new ventures require an investment in excess of J$70 million over the next five years. This includes acquisition of equipment, software and training, expansion into other geographic areas, and possible expansion into the export market.

The projection for return on this investment is between 4-5 years after phase one implementation, when the company projects its sales should double.

"The change in the demand from the market result in shorter, cheaper print runs needed in faster time frames, which we constantly work on by acquiring newer Digital presses and more efficient workflows," said Brown.

There is "increasing competition with the rise of small players entering the print market with aggressive pricing strategies that 'commoditise' the industry, which we combat by being 'more than just a printer'," he said.

While in the past the company concentrated on more single-colour and multicolour commercial print items, and still serves customers in this regard, it has added and developed product offerings to meet the demand for short-run colour.

"Web to Print development is also in our plan, to use the Internet as a tool to increase productivity and as a convenience to clients, without becoming impersonal. This area has great growth potential and is a proven business platform in other developed countries, and would expand our clientele to other countries," said Brown.

The service will allow the placement of orders online for items such as business cards, flyers, and brochures, which the Herald would then ship to clients.

"It is something we are developing and plan to launch this year in conjunction with the 90th anniversary of the company," he said.

Brown notes that while the popular perception is that premium print services are not available in Jamaica and in the Caribbean, and that print services are widely regarded as uncompetitive when compared to other markets, such as China and India, where the industry has significant growth and capacity.

"Although the environment is very challenging here, with the high cost for electricity, low literacy rate which impacts the necessity for printed material and other factors, the print industry still has potential for growth and development, and even with the advent of tablet computers, Smartphone apps and mobile solutions, print is still growing worldwide, and there is still a need," said the printery operator.

"To survive, companies and individuals must market, and hence must print," he said.

Coming out of the PSOJ Fambiz project, the most significant area of assistance was in organisational development.

"This has led to detailed organisational charts, outlined job descriptions, creation of new posts and overall thrust as we reinvent our way of doing business," said Brown.

"Reorganisation has made management more frugal with our cash management, and we always revisit ways to become 'leaner and greener' as an organisation as we implement strategies to cut cost and reduce our carbon footprint in our operations," he said.

business@gleanerjm.com

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