Production: Outsourced Printing Makes Sense for Newspaper Publishers

By: Mark Vruno

Production: Outsourced Printing Makes Sense for Newspaper Publishers

Cutting (to) the Core:  
Outsourced printing continues to make sense — and ‘cents’ — for more and more newspaper publishers  

The old European tradition of publishers reproducing their own works never totally migrated to the New World, with the exception of newspapers, of course. In America, there’s been mostly a church-and-state-like separation of publishers and printing presses. Even Reuben H. Donnelley, a son of the founder of North America’s now largest printing firm, had to break away and eventually form his own directory publishing business in the 1880s. The spin-off may have been a formality because, either way, his father and brother were printing the phone books he published independently.

Fast-forward to 21st-century print outsourcing trends: The vast majority of U.S. newspapers always have done their own printing. But modern-day publishers increasingly recognize outsourcing’s value as a management tool that makes profit sense, according to mega printer Transcontinental, Inc. By “jobbing out” print, newspapers can focus on their core business and still use technology to their advantage — without having the capital-intensive burden of investing in the latest multimillion-dollar printing presses, not to mention associated labor costs.

Among smaller newspaper publishers, outsourcing the print function is nothing new. A number of independent community newspapers have long contracted out their print needs to suppliers such as Montreal-based Transcontinental, which now produces more than 150 daily and weekly newspapers across North America. As reported in the April issue of Editor & Publisher, family owned Times Publishing Co. is moving its printing operations to a different facility. With headquarters in Erie, Pa., the company publishes the Erie Times-News. “Our major concern is the age of our printing and packaging equipment and the millions of dollars it would take to maintain or replace this equipment,” said president and publisher Rosanne Cheeseman.

“Although we have printed our own newspaper for nearly 90 years, with today’s technologies we have decided to purchase printing and packaging services elsewhere. The world of communication is changing,” Cheeseman said, “and more than 50 newspapers across the country have closed printing plants just since the beginning of 2009.” Times Publishing is in discussions with several potential third parties to print and package its newspaper, but the transition will likely occur during the third quarter of 2011, she said.

The Price of Progress
Print shop layoffs are inevitable, of course. Cheeseman said Times Publishing intends to offer separation packages to its 40 or so affected employees. Eastern Connecticut’s largest newspaper, The Day, had been printed independently since 1881 — until this past March, when Day Publishing Co. cut 38 workers due, in part, to moving the printing of its flagship newspaper to the Providence (R.I.) Journal. Most of the layoffs occurred in the printing division, which had 151 employees. (The firm’s weekly newspapers still are printed in its New London plant.)

While cost reductions may be top of mind, Transcontinental points out that an outsourcing decision often stems from the need to increase performance levels to the expectations of a rapidly changing marketplace. Outsourcing puts a function in the hands of experts committed to a particular area. The real question: Who can do the job faster and better? Still, with the present down economy, print outsourcing seems to be a global cost-cutting trend. Last month, Fairfax Media (The Age, The Sydney Morning Herald, and The Canberra Times) announced cuts to its printing operations in Australia and New Zealand, with a total of 350 job redundancies in printing and editorial expected to cost it $25 million in 2011. Fairfax, which hopes to streamline printing processes, is in talks with News Ltd. and APN News & Media about potential joint ventures, according to The Australian.

Several larger North American dailies, too, are taking a hard look at the resource burden of maintaining their own printing plants — an idea some big publishers deemed radical just a few years ago. Most union-related issues have been ironed out, as more newspapers realize the benefits. It has been nearly two years since production of Hearst’s San Francisco Chronicle went live at Transcontinental Printing’s Fremont, Calif., plant. Another example is La Presse, a Montreal daily that knew it needed to invest in new equipment to meet long-range objectives and address the demands of advertisers and readers for more color, higher quality, and more targeted distribution. Transcon built a state-of-the-art facility that was up and running within 16 months after the start of construction. La Presse is profiting from the ability to run more inserts and gain more color ad revenue.

In San Francisco, the Chronicle’s outsourcing success story has been well documented. It gained the benefits of ultra-modern hybrid heatset/coldset presses, advanced support technologies and highly skilled people through the 338,000-square-foot factory that Transcon constructed specifically for the newspaper in Fremont. A new format with higher quality, four-color printing and more flexibility for inserts are a few of the advantages. “Since Transcontinental of Northern California has begun producing the San Francisco Chronicle, the reproduction quality has been excellent,” said publisher Frank Vega. “The clarity and contrast of color photographs and graphics has noticeably improved and has been confirmed by the positive and enthusiastic feedback from readers and advertisers.”

Outsourcing – Not a New Concept:

The Toronto Globe and Mail, one of Canada’s two national newspapers, began an outsourcing partnership with printer Transcontinental 16 years ago and, in 2008, extended the contract for 20 more years. As part of that $1.7 billion extension, Transcon spent more than $200 million constructing a new press infrastructure based on heatset-equipped, triple-wide Commander CT presses from KBA; a UV-equipped, triple-wide press from manroland; and UV-equipped, single-wide presses from Goss International. Since going on-edition with the presses last October, circulation has grown by more than 4 percent, while ad sales in its glossy Globe Style magazine have more than doubled. One advertiser, L’Oreal, reportedly is spending about $50,000 to $100,000 (Canadian) per week in the edition. And Globe and Mail’s “Globe Life” semi-commercial product has attracted 100 new advertisers, with revenues up 45 percent since its launch, the paper stated.

Advocate Printing and Publishing WINs:

Advocate Printing and Publishing of Pictou, N.S., Canada is streamlining its business processes through Prism solutions that provide actionable, real-time business information for immediate and effective decision making. Advocate — a diversified print communications company with newspapers, magazines, websites, design and photography studios, multiple printing operations, outdoor media, signage, distribution, investment, and hospitality companies — is installing the WIN management information system (MIS) and QTMS production management system as part of its Advolution initiative focused on productivity and areas of future growth for what is already the largest independent printer in Atlantic Canada.

This deployment includes proactive, production-level dashboards and browser-based tools that help employees manage day-to-day activities, and automated wizards that remove labor-intensive and repetitive tasks, resulting in consistent and standardized work practices. “Without quality, immediate and accurate information, our ability to flexibly react to the marketplace is limited,” said Sean Murray, CEO of Advocate Printing. “Prism and QTMS in concert with our lean and green initiatives will provide us with the information we need to remain a leader in our sector. The printing industry must limit and control waste, whether it is product waste, redundancy or excess inventory, and we know QTMS will assist with the tracking and control of our raw materials and waste.”

Recap: Ink+Beyond in Canada:

More than 250 publishers, editors, and corporate executives converged in late April for the 92nd Ink+Beyond conference in Richmond, B.C. — the newspaper industry’s largest annual conference in Canada. It is hosted by Newspapers Canada, in partnership with the British Columbia Community Newspapers Association. Multiplatform strategies, print design, sales techniques, and newsroom management were among the topics discussed. Speakers included Geoff Tan, senior VP of Singapore Press Holdings; Robert Whitehead, director of marketing and sales of Australia’s Fairfax Media; Jim Gerber, director of content partnerships for Google; and David Olson, community marketing director for social media dashboard maker HootSuite.

“Newspapers in Canada are positioned to embrace rapid technological change,” said John Hinds, president and CEO of Newspapers Canada, a joint initiative of the Canadian Newspaper Association and the Canadian Community Newspapers Association. Combined, the two represent more than 830 daily, weekly, and community newspapers in every province and territory. “Both dailies and community papers are bedrock news sources and powerful advertising vehicles — on any platform,” Hinds said. “They have strong national and regional brands preferred by both advertisers and readers.” According to North American Development Bank figures, 15 million Canadian adults (78 percent) read a daily newspaper each week either in print or online, while 74 percent read the latest edition of their community newspaper.

RBP Extends ‘Liquid Gold’ to Newspapers:

RBP Chemical Technology, the Milwaukee-based manufacturer of surface chemistry products for the printing and electronics industries, has extended the Liquid Gold brand to its entire line of newspaper fountain solution products. Announcing the new brand extension, RBP president Mark Kannenberg said: “For many years, North American newspapers have relied on the Liquid Gold name on NENSCO products. With the RBP acquisition of NENSCO late last year, the traditional Liquid Gold products continue to be available. Because the Liquid Gold brand is extremely well known in the newspaper community, however, it is being extended to all RBP newspaper fountain solution products.” The Liquid Gold line includes mild acid, neutral, and alkaline fountain solution products for newspaper and coldset web operations.

Flint Raises Ink Prices:

Due to the continued increase in the cost of raw materials and related expenses, Flint Group raised the price of newspaper printing inks, effective last month and subject to existing contracts — up 8 percent for black lithographic and flexographic inks and 6 percent for colored inks. “The raw materials used to make newspaper inks have experienced very significant increases in global demand,” said Norm Harbin, Flint’s business director of newspaper inks, citing a 40 percent spike in the price of naphthenic oils and a 20 percent increase in the price of carbon black in the past eight months. Both products are fundamental components in the formulation of newspaper inks. Harbin said competing industries, such as tire manufacturers, are also driving prices upward as raw materials suppliers shift production to meet their needs. “And growing markets like China are absorbing a much larger portion of the available supply. Spiking crude oil costs are a strong cost driver as well, but just one of many,” he said.

Global News(print):

Precision Work in Germany, Russia
Delivery of the first of two manroland Colorman press lines (each featuring a pair of presses) at Druckhaus Ulm-Oberschwaben (DUO) in Germany is in full swing, and test runs are due to start in July. Six days a week, the company prints 22 local editions of the Schwäbische Zeitung and 13 of 34 local editions of the Südwest Presse, a DUO partner. This adds up to daily production of 35 different editions with run lengths between 870 and 39,000 copies. DUO also produces various official gazettes, plus regional freesheets and magazines.

The APL (AutomaticPlateLoading) robots on the Colorman autoprint ensure fast and economical plate changing, said printing press manufacturer manroland. The four, 32-page printing systems are replacing seven existing presses.

Meanwhile, the Russian Prime Print Group has also ordered a newspaper press from manroland: A UNISET is scheduled for installation at its Voronezh location in August. Among other things, this contract printer produces one edition of Komsomolskaja Prawda, the largest circulation daily newspaper in Russia. The service agreement includes production support for the first three months after installation and six audits over the following two years. Prime Print decided against a single- circumference newspaper press in the lower price segment and chose the double-circumference UNISET, which has higher output on less floor space. With two eight-couple towers, one H-type printing unit, two folders, and the cut-off register control InlineCutoff Control, the UNISET expands production capacity in Voronezh to a maximum of 64 tabloid pages. Prime Print Group has six printing houses in different regions of Russia and belongs to the Norwegian media company A-Pressen.

Goss in China
Goss International spotlighted its press technology suited to the requirements of printers and publishers throughout Asia when it exhibited at the 2nd International Printing Technology Exhibition of China (Print China) in April. A Magnum newspaper press tower was demonstrated, and new features such as advanced folding capabilities, improved tension control for multiple web leads, modified unit cooling controls, digital workflow management with remote diagnostics, and optional three-form inking were unveiled. The Magnum is manufactured at the Goss facility in Shanghai. (Goss International now is owned by Shanghai Electric.) The press offers the versatility of a single-width, one-around press format with speeds that approach double-width presses.

Goss also highlighted the Newsliner, Uniliner, Universal, and Community SSC newspaper models as well as M-600, M-500, and Sunday commercial web presses. “Printers and publishers in the Guangdong Province and throughout China are embracing advanced, industrialized printing capabilities,” said Jochen Meissner, president and CEO of Goss International. “We have earned a leadership position in the commercial web and newspaper sectors by delivering the press technology they need and backing it up with a long-term, local presence.” Meissner emphasized that the first Goss presses were installed in China in 1980 and that more than 3,500 Goss printing units have been installed in the country over the past decade.

Separately, the Quanzhou Evening News, the largest print media company in Quanzhou City, Fujian Province, said it soon will install a Magnum 4 press with a capacity of up to 70,000 newspaper copies per hour. The new 2×1 press system includes 16 printing units, one 2:3:3 jaw folder, and five reelstands. Installation will start in the second half of 2011.

“This is the first time we have invested in a Goss press,” explained Quanzhou Evening News vice president Wu Yuhuan. “The choice of a Magnum press is not only based on its value, high performance, and best-in-its-class features, but also based on the manufacturer’s stability and credibility.” Wu said affiliation with Shanghai Electric and a large, well-established operation in China give Goss International advantages in developing and supporting world-class technology for that country.

QIPC Notches $2.6M Order in Norway
Q.I. Press Controls will supply its register and color-control technology on presses at Norwegian newspaper printer Polaris Trykk in an order valued at more than $2.6 million. QIPC will install its mRC+, IDS, and IQM software across two presses: a Goss Universal and a KBA AG Commander. All told, the project covers 14 towers of color register and 26 webs of cutoff control. QIPC said the project, to be completed next year, marks the first time it has installed its IDS technology on a Goss printing press.

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