Consolidated's Bold Move
Houston-based printer caps $47 million, two-year spend with 36 HP Indigos.
By Mark Vruno, Executive Editor -- Graphic Arts Online, 7/1/2008
The Consolidated Graphics international printing network made a major move into expanding its digital footprint, following through on a promise to invest millions more in print-on-demand technology this year. The Houston-based firm announced during drupa it signed a contract with HP for the installation of 36 Indigo digital presses—including at least six model 7000s—at facilities in the U.S. and at its Czech Republic plant in Prague.At press time, an installation at the company's Medford, OR operation already had begun; the rest are to be up and running by year's end. Consolidated, currently the world's largest producer of printed material on the Indigo platform, was reportedly considering adding at least two more of the HP machines to its multi-million-dollar order.
With 2007 sales of $1.1 billion, Consolidated ranks No. 15 on the GAM 101. Its 6,000 employees provide short-run commercial printing and document technology services through 70 business units (64 acquired since going public in 1994) across 27 states, Canada and Europe. Its most recent acquisition was in March, when it bought $135-million PBM Graphics of Durham, NC.
“Our regional presence provides proximity to clients,” CFO Jon Biro told financial analysts last month. The broad base of locations “facilitates efficient print management and fulfillment. Clients like our ability to distribute first, then print in multiple locations, closer to them.” With shipping costs rising, printing close to point-of-use has added appeal.
Consolidated's 20,000 clients include blue-chip brands such as Apple Computer, Blue Cross/Blue Shield, Disney, Harley-Davidson, Microsoft, Midas, Nintendo and Starbucks. Research shows that print customers are demanding faster turnaround and higher customization, which is why CGX plans to put $22 million into digital print in 2008—a quarter of its total capital expenditures. Last year, the company spent some $25 million on digital print technology, and “sizable investments” in the digital arena are expected to continue in 2009, Biro says.
CGX claims to have the largest and most technologically advanced sheetfed printing capabilities in North America. In addition, “We believe [we have] the largest footprint of high-speed digital presses in the commercial print industry, both in terms of units and strategic locations,” says chairman/founder Joe Davis. The firm has 15 plants fully dedicated to offset production, while more than 50 facilities now have both offset and digital presses. Some of the new Indigos will be placed in two of these plants: Nies/Artcraft, St. Louis, which beta tested the 7000, and CDS Publications' Medford, OR site. CDS runs eight Kodak NexPress 2500/3000s and a Digimaster 110, and added a web-fed Xeikon 6000 in June 2007. This month, Consolidated purchased three additional 6000 models—with enhanced 1200-dpi resolution (at 4 bits/spot)—to be used to print high-quality dust jackets for photo books.
Photo print demand
The majority of Consolidated's new digital installations are for a photo book printing operation that will house a still-to-be-determined number of heavy-duty Indigo 7000 presses. In addition, six 7000s, including the Nies/Artcraft unit, will be used for variable-data direct marketing applications. The 7000 prints at speeds of 120 letter-size ppm. HP targets the new model for monthly production volumes averaging over 1 million pages; it rates it as capable of producing 3.5 million four-color letter-sized prints monthly when running 24/7. Its model 5500, with technology updated prior to drupa for improved performance, is aimed at monthly volumes in the 300,000 to 1 million range. The 7000 features a 12.48×18.26´´ image size (0.5´´ more than the 5500), allowing four-up 6×9´´ books and postcards, as well as thick-spined book covers (500+ page counts) on 80-lb. text.
Consolidated's move to photo book work taps the rapidly emerging market of photo specialty printing, including photo books and similar digitally printed products, such as greeting cards and calendars. According to research firm IDC, the photo merchandise market will grow 91% from 2007-2009, with worldwide revenues expected to reach $2.6 billion by the end of next year.
Consolidated acquired its first Indigo press in 1998. It has used the technology in print applications demanding high uptime and offset-like or photographic quality. Prior to this latest deal, the firm already was operating 19 Indigos for personalized marketing collateral, print-on-demand supply chain management and multimedia campaigns through its CGXSolutions digital division.
In addition to NexPresses and Xeikons, various locations also run Xerox equipment, including iGens. “We like to have enough tools in our arsenal, based on customer needs,” says executive VP operations Ric Davis (no relation to the CEO), adding that the firm has worked diligently to ensure its printed output “looks the same everywhere” throughout its fully integrated digital network. Consolidated has developed homegrown color-management technology and also uses off-the-shelf color software.
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