Archive for January, 2005

  • Clancy . . . overflow . . . the best bits . . . funnies

    The two publishing companies will be fifty/fifty partners in cinema company Hoyts, once Kerry’s other vehicle, Consolidated Press Holdings (CPH), which currently owns all of Hoyts, sells half to himself at PBL and half to WAN. PBL is already a substantial shareholder in CPH.

    The Western Australians will pay $173.5 million for their share, while Kerry will buy his half with 11 million odd shares issued by himself, based on an issue price of $15.58. (Are you following this, because questions will be asked after class?) This means that CPH will increase its shareholding in PBL from 37.4 per cent to 38.44 per cent of the expanded number of shares on issue.

    When all is said and done, Hoyts will have an opening debt balance of $173 million, which, as will be clear to all who have paid attention, gives it an enterprise value of $520 million.

    Any questions?

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    In keeping with the topic of high finance, a mob called Saratoga Partners, a New York-based private equity investment firm, has announced it has signed a definitive agreement to sell ink maker Sericol to Fuji Photo Film for US$230 million. Sericol is big in premium inks and other consumables for screen, narrow web, label and digital printing.

    So far there is no word from FujiFilm about the deal, so it could all be a flimflam. But watch this space.

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    More on the financial front comes with the news that Ashod Nassibian, managing director of print packaging company Wadepack, has accepted an offer from Carter Holt Harvey for his shares. Fair play to him, he is advising all other shareholders to follow his lead. In fact, the board is unanimous in its approval and is selling all its shares.

    It seems like only yesterday he was taking the company public, making a motza on his stake, and calling it a new start.

    CHH says it already has 66 per cent of the company and that the offer of $2.70 per share will close on Feb 18 – unless it is extended.

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    And they say there is no money in printing. department.

    New import figures suggest the printing industry is undergoing a massive technological upgrade. According to Joe Kowalewski, marketing manager of Printing Industries figures from the Australian Bureau of Statistics (ABS) show that more than $120 million worth of printing and bookbinding machinery and parts were imported during the December 2004 quarter. This represents a 23 per cent increase over the September quarter. Compared to last year the increase is more than 30 per cent.

    The financial year to date figure of $261 million represents an increase of almost 31 per cent over the previous period.

    That’s what might be termed a ‘boom’ in equipment sales. What was that about over capacity?

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    Defying all odds, black & white film supplier, Ilford Australia, is gearing up for a major promotion of its photographic products as kids return to school. Forget digital, forget colour, Ilford still sees the world in black & white film, which it maintains is widely used by students as a great way to learn about the photographic medium.

    Ilford reckons it is the only company still committed to the black and white photography market. And I don’t suppose they get too many arguments about that.

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    And finally . . . this week we have a guest speaker who is prepared to share with us some of his wit and his wisdom. Please welcome, Homer J. Simpson.

    “When you participate in sporting events, it’s not whether you win or lose. It’s how drunk you get.”

    “Weaselling out of things is important to learn. It’s what separates us from the animals! Except the weasel.”

    “If you don’t like your job you don’t strike. You just go in every day and do it really half-assed. That’s the American way.”

    “It takes two to lie. One to lie and one to listen.”

    “If you really want something in life you have to work for it. Now quiet, they’re about to announce the lottery numbers.”

    “To alcohol! The cause of – and solution to – all of life’s problems.”

    “I want to share something with you – the three sentences that will get you through life. Number one, cover for me. Number two, oh, good idea, boss. Number three, it was like that when I got here.

    “I saw . . . a movie about a bus that had to speed around a city, keeping its speed over 50, and if its speed changed, it would explode! I think it was called, The Bus That Couldn’t Slow Down.

    “People die all the time. Just like that. Why, you could wake up dead tomorrow. Well, good, night.”

    “Maybe, just once, someone will call me ‘sir’ without adding, ‘you’re making a scene.'”

  • Book Club –

    In the publication industry, there has never been a guide for folding. Designers have never understood all of the folding options available to them, and have not had access to the math behind proper digital document set-up. Until now.

    Finishing Experts Group, an industry-specific publishing company, has just released Fold, a first-of-its-kind, two-volume set that creates an essential system for the printing and design industry by establishing naming conventions and standardizing the folding process.

    Fold is an 850-page reference manual with over 1,000 illustrations that systematically documents and classifies more than 180 brochure folding styles, breaking them down into eight folding families (accordions, basics, exotics, gates, maps, parallels, posters and rolls). Each folding style is named, numbered and illustrated. Then, each style is diagrammed with proper folding compensations for accurate digital document setup. There are also tips and considerations for each.

    The reference manual, written by Trish Witkowski, a creative director with a Baltimore marketing firm, is the product of five years of industry research.

    Geared toward print and design professionals, industry organizations, binderies, folding machinery manufacturers, and the graphic arts education market, Fold provides a common language for designers and printers/binderies, giving everyone the same frame of reference and saving valuable time and resources.

    “As a professional designer, I would often become frustrated with the lack of a comprehensive resource for folding,” said Witkowski. “This guide fills a vacuum in the industry. My hope is that the book not only will be the go-to guide in the industry for folding, but that it also can serve as a springboard for creativity.”

    Trish Witkowski is currently the creative director for a marketing and communications firm in Baltimore. She earned her master of science in graphic arts publishing from Rochester Institute of Technology’s world-renowned School of Printing Management and Sciences and a bachelor of fine arts degree in graphic design. She has taught design and desktop publishing at the college level, and is the co-author of The Adobe InDesign Guide.
    Fold is available exclusively in Australia and New Zealand from Print21Online

    Table of Contents Volume ONE

    • Visual Index…………………………………….. 1
    • Folding List……………………………………. 33
    • Getting Started
    • How to Use This Guide………………….. 43
    • How This Guide is Organized………… 47
    • Understanding the Lingo……………….. 49
    • Format Options………………………………. 52
    • Folding Preparation
    • Planning for Folded Matter………………. 55
    • Setting-Up the Digital Document…….. 56
    • Placing Fold Marks………………………….. 60
    • Making Sequenced Folding Dummies.61
    • Modifying the Folds in this Guide………. 63
    • Folding 101
    • Folding Basics…………………………………. 67
    • How Paper Effects Folding………………. 69
    • Die-cutting, Scoring and Perforating… 71
    • Wafer-seals and Glue………………………. 72
    • Reference Materials
    • Conversion Chart……………………………… 75
    • Press Sheet Sizes……………………………. 76
    • Standard Envelope Sizes………………….. 77
    • Finishing terms…………………………………. 81
    • Folding Families
    • Accordions………………………………………… 85
    • Basics……………………………………………… 279
    • Exotics……………………………………………… 373
    • Table of Contents Volume Two
    • Gates……………………………………………….. 435
    • Maps………………………………………………… 509
    • Parallels…………………………………………… 551
    • Posters…………………………………………….. 681
    • Rolls…………………………………………………. 779
    • Index…………………………………………………. 845

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    To buy FOLD: The Professional Guide to Folding and to browse the Print21Online Graphic Arts Library click here:www.bluelinemedia.com.au/index.cfm?pageid=shop&productType=1

  • Job of the Week, Technical Sales Executive, Queensland


    Location Home Office, QLD
    Reporting to Northern Region Manager & General Manager
    Staff
    Responsibility Nil

    Position Requirements

    The right person for this position will need to be actively involved in the local printing industry and have a good reputation with a solid base of loyal customers on side. They will have the ability to effectively adapt to our product range and bring about immediate results.

    They will need to be enthusiastic, highly motivated and a team player, looking for a new exciting challenge and career development.

    This position requires a person with a solid background and technical knowledge entrenched in the art of lithography and its practice, preferably be a qualified Litho printer or possess comparable competencies. The initial focus will be in the commercial offset, sheet fed segment of the printing industry.
    As a technical sales representative, a sound understanding of the possible print related problems and the range of possible solutions available to a printer will be an advantage.

    The ability to communicate to all levels of management within a print organization is a must, as is the ability to present facts and figures to support sales arguments and projections.
    Computer literacy will be a requirement for the maintenance of our MIS, data base and the generation of territory reports and marketing plans.

    Excellent written and verbal English skills are essential.

    Objective

    To promote and extend sales of the product throughout the territory to all potential purchasers thereof and work diligently to obtain orders on behalf of the Company by means of personal visits and by correspondence with such purchasers.

    Main Responsibilities

  • Territory management and development, including the maintenance of existing accounts /client base to ensure the maximum effective practicable level of account penetration and development.
  • The identification and development of new clients, markets and areas of business opportunities, including telemarketing methods to establish leads and schedule appointments.
  • Working with clients and customers, assessing their needs and requirements, making recommendations designed to best meet these needs, including the demonstration and promotion of company products.
  • Assisting with the preparation of forecasts, call plans, sales reports and reports to management.
    Participating in trade and associated industry related functions and events.
  • Maintain an up to date knowledge of the market and on-going technical developments.
  • Education Requirements
    Printing Trade certificate;
    Completion of HSC;
    the completion of a Sales or Marketing orientated course would be of benefit.

    Product Knowledge
    Press chemistry,
    Printing blankets,
    Associated consumables
    Printing rollers

    Profile
    Out going, friendly disposition, with high regard for his or her customers and their own credibility. A high level of Integrity and honesty is a must as is a proven track record.

  • Confidant
  • Self motivated
  • Energetic
  • Dependable
  • Trust worthy
  • High achiever
  • If you think you are a fit for the above position then please forward your resume to the following:

    General Manager

    Bottcher Australia Pty. Ltd.
    Fax: 02 9659 2744

    Email resumes to
    info@bottcher.com.au

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    To view more printing and graphic arts career positions click here for JobsOnline21: www.bluelinemedia.com.au/index.cfm?pageid=jobs01

  • Xerox first past the post with carbonless paper for digital colour

    Xerox Premium Digital Carbonless paper is specially treated for use in the creation multi-part forms in industries like insurance, healthcare and finance. The aim of the new product was to make it economical for businesses to add logos, highlights and other details to each sheet of an invoice, contract, receipt or claim form.

    The carbon-free paper works through the use of a capsule-control coating of tiny beads on the surface, which stay intact while the paper runs through digital printers. When forms are filled out on documents created using carbonless paper, the pressure breaks the capsules to create a permanent image on each sheet.

    According to Nancy Rees, senior vice president of the Xerox Supplies Business Group, the company is the first to bring this technology to the marketplace. “The ability to use carbonless paper in digital color devices represents another first for Xerox innovation,” says Rees. “We developed the market’s first digital carbonless paper for black-and-white printing in the late 1980s, and today color printing is possible. Customers now have the flexibility they need for creating single or multi-part forms in color on-demand.”

    Xerox claims some of the benefits of using colour in multi-part forms and invoices include that it reduces end-user errors and makes it easier to fill out forms quickly. In addition, the ability of digital printing to create customized forms on-demand eliminates the cost involved with producing large inventories of offset pre-printed forms.

  • Ink-jet addressing and personalisation continues to grow

    The steady rate of growth was attributed to the maturity of the market, with research firm Infotrends/CAP Ventures approximating the total value of $116 million in 2004.

    The study, titled Inkjet Addressing and Personalisation: Overview and Outlook 2004, shows that the continuous ink jet segment has been hit hard in the direct mail environment by the competition from piezoelectric and thermal ink jet technologies, which are both increasing at a moderate rate.

    The study was commissioned to provide insights into the habits and preferences of the print providers who purchase ink jet addressing and personalisation services, as well as to estimate the size of the worldwide market. “North America, which is really the focus of this report, is by far the biggest region in terms of printer and fluids purchases, accounting for about two thirds of the world’s total,” said Bob Leahey, a director at InfoTrends/CAP Ventures. “Europe comes in second, while other regions are tiny by comparison.”

  • Digital colour prints to leap to 372 billion pages by 2008

    I.T Strategies report reveals that a total of 276 billion pages were printed on narrow format ink jet and colour EP (toner) printers in 2003. While only 50 per cent of these pages were printed in colour, by 2008 that figure is expected to grow to 62 per cent to reach 372 billion pages out of a total of 596 billion.

    According to Patti Williams, consulting partner at I.T. Strategies, these results are indicative of a shift in the industry towards digital colour printers. “Growth in the digital printer industry today and in the future is predicated on the sales of digital colour printers, including narrow format ink jet printers and colour electrophotographic (EP) printers,” said Williams. Of the pages printed in colour in 2003, 81 per cent of them were printed on EP printers with this figure expected to increase to 86% by 2008.

    Of the 86 billion pages printed on ink jet printers in 2003, about a third were printed in colour and I.T. Strategies expects this to increase to 114 billion by 2008. “In the home/consumer market, ink jet is virtually the only technology used to print in colour,” said Williams.

    The report from I.T. Strategies also showed that a higher percentage of pages are printed in colour on digital colour EP printers than on ink jet printers, due to users making a price-driven decision to purchase them specifically for colour output. “The corporate/business segment is dominated by colour EP,” said Williams.

  • World Exclusive Interview! James Langley of Kodak goes one-on-one with Andy McCourt

    Kodak has been associated with supplying the professional graphic communications industry for many years. The first colour separation scanners in the early 1950s were co-developed by Kodak and Time Inc., attuned to the spectral sensitivity of Kodachrome transparencies. Whilst successful in graphic arts film and proofing, Kodak has not enjoyed the same brand dominance in end-to-end graphic communications as it has with photography.

    Recent developments indicate this may be about to change. On January 12th, Kodak announced that it was acquiring all of Sun Chemical’s 50 per cent share in Kodak Polychrome Graphics, yielding total ownership of the film, plate and proofing giant to Rochester. This followed Kodak’s May 2004 acquisition of Heidelberg’s 50 per cent in the NexPress joint venture, its prior takeover of Scitex’s Versamark high volume inkjet business, Encad’s large format inkjet and 3M’s Matchprint proofing.

    What does all this mean? I posed some questions to James Langley (pictured), President of Kodak’s Graphic Communications Group, and a Senior VP of the Eastman Kodak Company.

    A McC – Kodak has suddenly, since drupa 2004, emerged as sole owner of several key graphic communications/print technologies. Is the company now placing more focus in this area than in consumer digital imaging?

    JL: Kodak outlined a strategy in September 2003 that refocused the company on three key markets: Consumer, Health and Commercial (which includes Graphic Communications) – each of these areas serve as pillars that support Kodak’s digitally oriented growth strategy. Since the September 2003 announcement, the company has been delivering on its strategy.

    With the Graphic Communications business, we have made several key acquisitions and are in the process of assembling the industry’s broadest product portfolio. Think about this for a second: with the pending acquisition of KPG, Kodak will be able to deliver customers high-speed document scanning technology, pre-press, soft and remote proofing, computer to plate, direct imaging, digital, on-demand colour and monochrome presses, wide format inkjet and continuous inkjet technology for high-speed, high volume applications. We intend to deliver these products through an integrated sales organization and support it with an integrated service offering.

    Kodak also continues to deliver on its digitally oriented strategy in other key areas. For instance, in the consumer market, Kodak has become the number one seller of digital cameras in the United States.

    A McC – Will Kodak fully integrate the acquired companies into a single Kodak entity servicing the printing, publishing, packaging and document markets? There seems to be a lot of leveraging available between these divisions.

    JL: It is our intention to present a single face to the customer. We will have an integrated sales force with a strong account management structure. Customer relationship managers will serve customer needs, and product specialists will back them up. We also will have an integrated service organization, which we announced last year and we are in the process of creating, leveraging Kodak’s world-class service organization.

    A McC – NexPress and Digimaster are the ‘Rolls-Royces’ of digital presses but are expensive. Would Kodak consider franchising ‘NexPress Print Centres’ in the way Kodak Express 1-hour photo labs are franchised?

    JL: The Graphic Communications Group is focused on the delivery of robust solutions with solid duty cycles for the production market space. The DigiMaster and NexPress have extremely high reliability and availability to meet the needs of the production printing market. The total cost of ownership makes users of our technology very cost competitive in this market.

    We have stated previously that we need to expand our product portfolio, and we intend to do that. We have no plans to enter into the franchising business. Kodak will continue to focus on serving our customers and driving demand for our products to make our customers’ businesses more successful.

    A McC – Any more acquisition areas envisaged in the future, such as CTP hardware, workflow software, Cutsheet papermills etc?

    JL: I feel very good about the progress we have made thus far. Right now, we are focused on integrating the businesses we have already acquired. Of course, as a matter of policy, we never discuss acquisition plans. That said, the company has always maintained that if an appealing opportunity presented itself, we would act accordingly.

    A McC – Do you have any other comments?

    JL: We have made a tremendous amount of progress in a short period. The Graphic Communications Group became an operating unit of Kodak in September 2003; at that time, it consisted of two JVs (KPG and NexPress) and a wholly owned subsidiary (Encad). Once the KPG acquisition is finalized, the Graphic Communications Group portfolio will include CTP, pre-press, remote proofing, direct imaging, wide-format inkjet, on-demand digital colour and monochrome presses, document scanning, high-speed, high-volume continuous inkjet technology. We will have the broadest portfolio in the industry, and be able to serve a wide variety of markets and customers. We are very excited about what we will be able to offer customers.

    My thanks to James Langley for responding to these questions at such short notice.

    MY CALL

    When a company of Kodak’s size, history and resources devotes so much shareholder capital to an enterprise, you can be sure a lot of homework has been carried out. Kodak is a completely different company in every respect, from the pre ‘digital strategy’ firm of 2002.

    The changes began with the appointment of former Hewlett Packard man Anthony J Perez as President and COO in April 2003. Mr Perez spearheaded HP’s efforts to build a business in digital imaging and electronic publishing. The result is a USD$16 billion sector. (Kodak’s total sales are around USD$13 billion).

    Five months after Anthony Perez joined Kodak, another accomplished 30-year HP executive joined – James Langley. He has been involved in printing for most of his career and actually wrote the PCL driver language for the HP laser printer. As VP, commercial printing, he oversaw HP’s entry into that market which today manifests itself with the HP Indigo range.

    Add to this list of recently-joined people such as Homi Shamir (well known here in Australia when he headed up Versamark for Scitex), Jeff Jacobsen, the dynamic CEO of KPG, and former Xerox and CAP Ventures exec Barbara Pellow (responsible for marketing for Graphic Communications Group) plus the many people who moved over from Heidelberg with NexPress. The result is you have a level of digital imaging know-how at Kodak that has reached escape velocity and is about to go into orbit.

    Locally, NexPress has moved into ultra high-technology premises in Melbourne’s ‘Digital Harbour’ and will act as a technical support hub for SE Asia. What remains to be seen is the speed and degree of integration between local KPG, Versamark, NexPress and Encad operations.

    On January 21st, Reuters business news service reported speculation concerning Creo that “The company’s stock received a boost this month from speculation it could be bought by Eastman Kodak Co.” It’s only speculation, but what a fit that would be!

    So, my call is. . . we are looking at one of the major suppliers to the USD$1.2 trillion graphic communications sector for the future. Kodak recognises that, after a long love affair with film and silver halide, the time has come to prepare for going all digital. It probably can not enjoy the same ubiquity in digital consumer imaging, that it enjoyed with ‘you press the button, we do the rest’ photography – it was a late entrant and it’s too crowded, so it must focus on professional and commercial markets to balance and grow its portfolio.

    And that means more acquisitions, more integration of what it has and one heck of an exciting time for anyone involved with Kodak’s Graphic Communications Group.

    Maybe the new mantra will be; “you punch the pixels, we do the rest?’

  • Creo takeover Part 2 – Board slams rebel shareholders

    A proxy circulated by a group of disgruntled shareholders seeking support for a new regime has drawn a caustic response from Creo’s current management. In a point-by-point refutation of the ‘dissident’s claims the board asks shareholders to back the current management, led by Amos Michaelson.

    The board’s response follows…

    Based upon its initial review, the board believes that the dissidents have put forward a highly speculative and risky proposal for the future of Creo, which is based on a number of selective omissions, misconstrued facts and distortions. The board reaffirms its recommendation that shareholders vote in favor of the Creo slate of director nominees at the annual and special meeting of shareholders scheduled for February 10, 2005. Shareholders should use the BLUE form of proxy (bearing the Creo logo) and discard any proxy received from the dissidents.

    The board believes that the dissidents’ proposed “change of direction” would lead to a reversal of Creo’s many achievements, including its increased revenues and profitability. The dissidents’ proposal represents an ill-conceived and high-risk approach that would not only jeopardize the future of Creo, without offering any compensation to shareholders, but is also likely to destroy Creo’s reputation as a world leader in its business. The misguided strategy presented in the dissidents’ circular, if implemented, would likely result in immediate and long-lasting damage to shareholder value.

    While the board intends to issue a comprehensive analysis of the dissidents’ circular shortly, it believes that several of the assertions made by the dissidents are misleading and deserve immediate attention:

    DISSIDENT ASSERTION: Creo needs to “refocus” its business.

    FACT: Creo’s prepress and imaging solutions businesses – which the dissidents themselves define as “core” – currently generate over 98 percent of Creo’s revenues and are the focus of 95 percent of the company’s research and development (“R&D”) efforts. Furthermore, all of Creo’s businesses are regularly evaluated on their own performance metrics.

    The contradictory proposals from the dissidents contend that Creo should reduce the number of products offered while simultaneously increasing the breadth of prepress solutions “for all segments of the market”. The dissidents further demonstrate their lack of understanding of the company’s products and customers when they erroneously contend that Creo is limited to “one type of customer and technology”.

    DISSIDENT ASSERTION: Creo can increase revenue and market share by “refocusing” and “realigning the sales force” and reducing prices.

    FACT: Creo’s salespeople are completely focused on the company’s core business. Like most of its competitors, Creo relies mainly on direct sales channels in the major economies of the world and uses indirect channels in most other regions and for lower cost and lower volume products. The resulting mix is an effective distribution method for Creo’s computer-to-plate solutions as it allows the company’s specifically trained sales force to sell the competitive differentiation of its products. Creo believes its current mix of direct and indirect sales channels is the right combination to meet its customers’ existing needs and, in anticipation of future market and sales trends, is working to build additional partnerships and indirect channel representation around the world.

    Furthermore, the dissidents’ claim that reducing prices will increase market share reflects their poor understanding of the dynamics of Creo’s marketplace and the capital equipment business in general. Arbitrary price reductions would likely prompt the competition to follow suit and would result in reduced profit margins and no gain of market share.

    DISSIDENT ASSERTION: Creo needs to “rethink the digital media strategy” and “minimize future capital expenditures by focusing on alternative growth strategies”.

    FACT: Since launching its digital plate strategy in the fall of 2003, Creo has transformed its business to become a complete prepress systems provider and is now, after little over a year, the world’s fourth largest digital plate vendor. In fiscal 2004, the company’s new digital plate business generated an annualized revenue run rate of nearly US$65 million by the end of its first year and grew Creo’s consumables revenue by 62 percent, with more than half of the consumables revenue and all of the consumables revenue growth coming from plates.

    The dissidents’ suggestion that an alternative approach is needed, including the possibility of entering into “joint ventures with larger and established digital plate makers,” demonstrates the dissidents’ fundamental misconceptions about the importance of Creo’s current digital plate strategy to its continued profit goals and the dynamics of the digital plate market.

    DISSIDENT ASSERTION: Creo can simultaneously reduce R&D expenditures and sales costs, while expanding its sales and continuing to meet the needs of its customers.

    FACT: These are mutually exclusive and contradictory proposals that underscore the dissidents’ lack of knowledge about Creo’s products and customers. The dissidents’ proposal to abruptly reduce R&D to six to eight percent means the elimination of close to 50 percent of Creo’s R&D programs. The board believes such a reduction will result immediately in a loss of customer loyalty and sales people. This would likely trigger a downward spiral in market share, prices and profitability and would drive the need for further cuts which would not make up for the reduction in profit.

    The company’s current business plan is the optimal approach for achieving Creo’s sustainable growth objectives and enhancing shareholder value without sacrificing either short- or long-term profitability and growth targets. Creo’s management team has outlined a plan to reduce its R&D expenses as a percentage of revenue in a controlled manner – to lower than 12 percent in 2005 and nine percent over the next two years – as the company’s needs for consumables R&D fall in line with industry norms.

    DISSIDENT ASSERTION: The dissidents’ proposed slate of director nominees and management candidates are the right leadership team for Creo.

    FACT: The highly touted, “wide-ranging” business career of Robert Burton, Sr., the dissidents’ proposed chairman and CEO, includes no experience in managing high-technology or capital equipment companies such as Creo. Moreover the dissidents have not identified any senior managers with relevant experience managing high-technology or capital equipment companies.

    With respect to the dissidents’ proposed slate of director nominees, their combined lack of relevant experience, qualifications and credentials further reinforces the board’s deep skepticism about the nominees’ ability to direct the management of the company and create the value the dissidents claim they can deliver for Creo shareholders.

    CONCLUSION: For all of these reasons and others, the board believes that the dissidents’ proposed “change of direction” would lead to a reversal of Creo’s many hard-won achievements, including the recent transformation of its business and its resulting increased revenues and profitability. The dissidents’ proposal represents little more than an ill-conceived and high-risk gamble that puts the future of Creo at risk without offering any compensation to shareholders.

    The complete Creo management proxy circular and other related materials, including statements from customers in support of the current management and board, can be accessed at www.creo.com/shareholdervalue.

  • Creo takeover Part 1 – Disaffected shareholders make grab for power

    Citing issues with decisions made by management and depleted share value, the angered shareholders published an open letter detailing their five-point plan to rescue Creo from its “road to disaster.” The letter nominates Robert G. Burton as the proposed new CEO and chairman of the board, alluding to his success in the top job at Moore Corporation Limited as reason for the choice.

    The open letter is as follows . . .

    Creo Inc. is a company with lots of potential. In the 1990’s, Creo made a name for itself as the company that led the commercialisation of computer-to-plate (‘CTP’) devices for the commercial printing industry. As a result, Creo has the largest installed base of CTP devices in the world. Despite this, the current Board of Directors of Creo (the ‘Creo Board’) and current Creo management have made decisions that have resulted in sub-par operating performance, missed targets and poor capital allocation, all of which have destroyed shareholder value.

    This is unacceptable. We believe a change of direction is necessary for Creo to realize its potential and deliver acceptable returns to shareholders. In order to effect this change, we require your support. Included herewith is a dissident proxy circular (the ‘Circular’) and a GREEN form of proxy which we have prepared in connection with the annual and special meeting of Creo’s shareholders to be held on February 10, 2005 (the ‘Meeting’). At the Meeting, we intend to nominate a new slate of directors to the Creo Board.

    To understand why change is necessary, one needs to look no further than the Creo share price. Over the approximate five-year period from the date of the IPO to October 8, 2004, Creo shareholders have lost 53% of their investment. We believe that this is the result of:

    – Consistently poor operating performance, which resulted in Creo’s pre-tax operating margin falling from 16.6% in fiscal 1999 to 1.6% in fiscal 2004;

    – A loss of market share in Creo’s core North American metal CTP business, in which Creo’s share of annual installations fell from 72% in 1999 (proforma the Scitex Acquisition, as defined in the Circular) to 28% in 2004;

    – A cost structure that is significantly above that of its competitors despite consistent calls from shareholders that it be realigned;

    – Consistently missing publicly stated goals and targets, such as on August 4, 2004 when Creo management indicated that it would not be able to meet its long standing commitment to shareholders of 15% pre-tax margins exiting fiscal 2005;

    – several poor capital allocation decisions, such as Creo’s purchase of Scitex Corporation’s prepress assets, its investment in Printcafe Software, Inc. and its wasted R&D spending, resulting in net investment, intangibles and goodwill writedowns of approximately US$328 million over the past five years.

    In the face of this performance, what has the Creo Board done to reverse the trend? The answer is nothing. Over the past five years, the Creo Board has not changed the leadership of the Company. The Chief Executive Officer (the ‘CEO’) of Creo at the time of the IPO remains the CEO of Creo today. In addition, the Creo Board has not significantly changed the Company’s operating strategy despite overwhelming evidence that it has not created shareholder value.

    Creo’s Current Strategy-A Road to Disaster

    The Creo Board and current management believe that, despite their poor performance, you should continue to entrust the Company to their ‘growth for growth’s sake’ strategy. While indicating that Creo will not achieve its 15% pre-tax margin target exiting fiscal 2005, Creo management continues to stick by their target of US$1 billion of revenue by fiscal 2007. In the process, the Creo Board has approved over US$100 million of investment in building out Creo’s digital plate strategy with returns to shareholders coming far off in the future, if at all.

    Although we acknowledge the attractiveness of providing digital plates as part of the Creo product offering, we believe that the approach taken by the Creo Board is flawed and could require significant additional capital beyond what the Creo Board has already approved. We also believe that this will result in a steady stream of losses for the Company. These capital investments combined with continued market share losses could leave Creo in a difficult financial position. Change is necessary to reverse this course before it is too late.

    A New Leader-Robert G. Burton, Sr.

    We believe that a significant change of direction is necessary at Creo to unlock the value that exists in the Company. We seek to replace the Creo Board with individuals who are established business leaders, many of whom have substantial experience in the printing and publishing industries. In addition, if our nominees are elected, they intend to hire Mr. Robert G. Burton, Sr. as CEO of Creo and appoint him as Chairman of the new Creo Board.

    Mr. Burton, a Printing Impressions Hall of Fame member, is widely recognized for his intense focus on customers and on delivering value to shareholders. Goodwood Inc. approached Mr. Burton for this role because it believes that his proven ability to turn around underperforming companies, combined with his vast printing industry experience and distinguished track record, make him the ideal candidate to turn around Creo’s performance and unlock value for shareholders.

    Mr. Burton was the Chairman, President and CEO of Moore Corporation Limited (‘Moore’), a leading printing company with over US$2.0 billion in revenue in fiscal 2002. During his two-year tenure at Moore, Mr. Burton led Moore to a dramatic turnaround through significantly reducing costs, recruiting top-tier executive talent, growing revenue organically and through acquisitions and implementing a ‘one-stop shopping’ customer focus. The price of the common shares of Moore increased from US$2.38 on December 12, 2000, the first date of Mr. Burton’s employment, to US$10.16 on December 6, 2002, the date of his resignation. This is not the first time Mr. Burton has delivered results to shareholders.

    Mr. Burton was also the Chairman, President and CEO of World Color Press, Inc. (‘World Color’), a leading commercial printing company with revenues exceeding US$2.3 billion for fiscal 1998. During his nine-year tenure as the senior executive of World Color, Mr. Burton led its turnaround, culminating in its sale by way of a merger in 1999 with Quebecor Printing, Inc., creating Quebecor World, Inc., one of the world’s largest commercial printers. World Color completed its IPO on January 25, 1996 at a price of US$19.00 per share and was sold in the merger at a value per share of US$38.00. For additional information about Mr. Burton, please see the section of the Circular entitled ‘Robert G. Burton, Sr. and Burton Capital Management, LLC’.

    A New Strategy-Strengthening the Core

    If Mr. Burton is appointed as Creo’s CEO, his intention is to change the strategic direction of Creo by refocusing the Company on its core products, improving the Company’s focus on customers and on delivering value to shareholders. The new corporate mission will be to grow Creo into the pre-eminent prepress and imaging solutions provider in the commercial printing, packaging and newspaper industries. The major components of this strategy include:

    – Refocusing the business by selling, spinning off or shutting down products and product lines that are non-core to the mission or do not deliver a satisfactory return on capital employed;

    – Reducing costs by rationalizing product lines, reducing R&D spending, realigning the sales force and consolidating corporate functions, which we believe will result in cost reductions having a run rate of at least US$50 million after the first 12 months and an additional US$25 million in the second 12 months following Mr. Burton’s appointment;

    – Rethinking Creo’s digital media strategy and reducing the amount of capital required for the strategy by focusing on joint ventures, business alliances and business acquisitions as opposed to greenfield capital investment;

    – Increasing revenue by emphasizing Creo’s selling efforts and refocusing on customer needs and by completing selected acquisitions relating to Creo’s core business;

    – Aligning management interests with those of Creo’s shareholders by implementing an employee stock purchase plan at market prices and requiring senior management to participate in such plan. Above all, it is our intention to deliver results to shareholders-excuses will be unacceptable. We believe that these changes will result in a stronger Creo, one that can compete over the long term and deliver value to shareholders.

  • Australian industry supports Creo management

    Steve Green, general manager of Creo in Australia and New Zealand, was not available for comment but it is understood the company is receiving solid support from its customers in favour of the status quo.

    Melbourne packaging prepress company White & Gillespie is a user of Creo technology, and CEO Geoff White was quick to join the calls of support for the company’s current board of directors. “Certainly, I have no reason to quibble with Creo’s current management,” said White.

    He emphasises the importance that Creo puts on maintaining customer relationships. “They have always put their customers first and their shareholders second. That’s why you’ll hear plenty of praise from their customers. I don’t think you’ll find too many people unsatisfied with the level of support that they offer,” said White.

    Brisbane litho printing business Colour Chiefs also expressed satisfaction with Creo, with managing director Gavin Evans praising the quality of its services and level of support. “We recently swapped to Creo and upgraded three of our sites, and since then we’ve been really happy,” says Evans.

    Evans praised the level of support that Creo offer for their customers. “Their tech support is fantastic,” says Evans. “They appreciate deadlines, and whenever there has been a problem it has been resolved really quickly. We’ve got a lot of money invested in them, and I’ve got nothing but good things to say about their management.”

    In other news, Creo has hit back at the dissident shareholders with news that sales for the first quarter are up to $174 million, giving projected highest quarterly revenue in the history of the company. The official results for the quarter will be released on February 3, a week before the AGM when shareholders vote to decide the future of the company.

  • Clancy . . . overflow . . . the best bits . . . funnies

    Label, packaging and web offset sectors will be the main beneficiaries of the new standard, which will be launched at Print 05 in Chicago later this year.
    The JDF standard is being promoted by the CIP4 organisation, the Swiss –based standards body for the graphic arts and is designed to facilitate an open end-to-end manufacturing process for the graphic arts.

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    The Gallus Group has renamed its Arsoma subsidiary in order to bring it into line with the rest of the narrow web press manufacturing company. As of January 1 the well-known Arsoma brand will be no more as the Frankfurt-based subsidiary changes its name to Gallus to comply with a global branding strategy for the Swiss company. Arsoma was founded in 1971 by the Arabin brothers, Siegfried and Dieter. In 1990, the company became part of the Gallus Group and subsequently has been the site of one of the Group’s two research and production facilities. Since 2001, Arsoma built machines have been marketed under the Gallus brand to establish and sustain a uniform image. Heidelberg currently owns 30 per cent of Gallus.

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    Who says there is no money in printing?

    HP has resisted pressure by financial analysts to hive off its profitable Imaging and Printing Group. Long recognised as the IT corp’s cash cow, the printing division is to be merged with what is cheerfully known as the Personal Systems Group. IPG is responsible for the company’s printer, imaging and supplies business, projectors and digital cameras. This includes the Indigo digital printing segment and wide format printers. The Personal Systems Group handles desktop and notebook PCs, handheld products, personal storage. IPG is a US$24 billion business, which, according to Carly Fiorina, CEO, “leads the market in virtually every category in which it competes.”

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    Last year was another biggie in terms of intellectual power at Xerox. Its research and development efforts resulted in 520 new US utility patents, a respectable effort and a sizeable addition to the 16,000 patents the company has lodged since it was founded in the 1940s. The patents covered such areas as mobile document imaging, colour print reproduction, management of print shops, and advanced materials that can improve the performance of printers and copiers.

    Hervé Gallaire, chief technology officer and president, Xerox Innovation Group claims Xerox introduced 40 new products in 2004 and that in the third quarter of last year, about two-thirds of the company’s equipment sales were generated from products launched in the past two years.

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    Deaf children and adults around the world are learning to read and communicate better thanks to SignBank – a FileMaker Pro database application that stores the movements, hand shapes and facial expressions in a written form of sign language known as SignWriting. By correlating signs to written words, SignBank helps improve literacy among deaf-born adults and children, who often have difficulty learning to read a spoken language based on sounds they have never heard. SignBank also helps the deaf understand other sign languages.

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    And finally, let’s start the year as we mean to continue . . . with a walk into a bar.

    A bloke down from the Territory walks into an upmarket bar in Melbourne. The barmen won’t serve him and points to a sign that says, ‘Ties must be worn.’
    The Territorian goes back out to his ute, rummages around in the back and comes up with a pair of jumper leads. He ties them around his neck and heads back in.
    The barmen gives him a long hard look, then pours him a drink. “Just don’t start anything, he says.

  • Book Club – (PIRA)

    A comprehensive industry reference book for all those who produce, specify and buy printed products, its 500 plus pages are complemented by a complete CD version that contains Pass4Press PDF instructions, British Trade Protocols and SPC Sheet templates.

    Lavishly illustrated throughout with an excellent glossary of industry terms, the 9th edition has new sections on digital prepress and digital print technologies, plus practical tables to help you choose the right process for a particular job.
    Now covering all commercial print applications, including packaging, transactional, brochures and publishing it will rapidly become your most referred to work. Written in clear no-jargon terms by Dr Sean Smyth, PIRA International’s senior print consultant The Print and Production Manual – 9th edition is the definitive reference work for the industry.

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    To buy The Print and Production Manual – 9th edition and to browse the Print21Online Graphic Arts Library click here:www.bluelinemedia.com.au/index.cfm?pageid=shop&productType=1

  • How to find a good sales rep – James Cryer reveals all

    While finding the right sales rep in the first place can often be a difficult task, the process that follows where the candidate and employer sit down to negotiate the famous ‘starting package’ can prove even more painful. This is what James Cryer from JDA Print Recruitment refers to as the ‘birthing’ stage.

    According to Cryer, one of the worst mistakes that can be made is to put all of the risk back on the new rep by placing them on a reduced pay package for an initial trial period. “The rep starts with the feeling that management does not really have faith in their abilities and it becomes a self-fulfilling recipe for disaster,” says Cryer.

    It is these signals sent to the rep during the ‘formative stage’ that virtually set the scene for success or failure. “It’s called imprinting,” says Cryer, “whereby babies – be they ducklings, humans or even print reps – get their cues from the first few moments of entering their new world.”

    The solution for this is to allow the rep a reasonable time frame to re-build their client base. “They should be measured during this early stage on how much smart energy they are expending generating quotes, not necessarily on how much is actually coming in the door,” says Cryer. And if they can’t afford to start a rep on a decent sales package that shows they have faith in their abilities, then in most cases the employer shouldn’t proceed.

    Careful consideration needs to be made before the life of a new sales rep is brought into the world. “Don’t do it unless you have the resources, intestinal fortitude – and most important of all, the willingness and patience to support and assist the new rep during this most critical period,” says Cryer. Additionally, when searching for that right person to take your printing solutions from the factory floor out into the industry, you should live by the motto – “there are no bad reps, only bad sales managers.”

  • Canon Australia targets in-plant market with new digital output management software

    Two new digital output management solutions will be made available to customers, Digital StoreFront 2.1 and Balance 3.2. While Digital StoreFront is a website and transaction server that provides a connection between the customer and the print room, Balance 3.2 is EFI’s latest solution for distributing and managing output across multiple printing devices.

    According to Steven Brown, market segment manager for production and graphic arts, the decision to partner with EFI was a recognition of the increasing importance of the industry. “The in-plant and commercial print-for-pay market in Australia is growing fast,” says Brown, “and Digital StoreFront and Balance will be at the heart of this boom in 2005.”

    This assertion was endorsed in a recent whitepaper released by Canon-sponsored independent researcher Richard Vines. The report emphasized that the in-plants enjoying the most success are the ones embracing collaborative, customer-focused and innovative business methods, as well as using new software and structures to forge deeper links with their customers.

  • Creo Sydney to service customer care for SE Asia

    While the Shanghai branch of the new centre will offer support for China, Taiwan, Hong Kong and Singapore, the branch in Sydney will provide support in English for Creo customers in Australia, New Zealand, Singapore and the rest of South East Asia.

    In the past customers in the Asia Pacific region contacted the Creo Response Center in Canada, but the new branch in Sydney means the support will be moved closer to home. “By setting up the Asia Pacific Customer Care Center, we will provide customized, one-stop services to different local markets across the region,” said Ivan Chen, director of the Creo Asia Pacific Customer Care Center.

    A response to industry-wide pressure to improve service quality and efficiency, the aim of the new centre is to deliver faster service at a reduced cost. “Our goal is to become the number one prepress service provider in the market,” says Chen. “With the opening of the new Care Center, we are one step closer towards this goal.”

  • US printing stays on top as China imports grow

    According to ABS data, Chinese imports to Australia were more than $1.8 billion in 2004. The US remains the top source of imports for the Australian printing industry, but Printing Industries manager Hagop Tchamkertenian expects this to change once a Free Trade Agreement is negotiated.

    “This announcement has showed just how important China has become,” Tchamkertenian says. “The US is still far in front for the Australian printing industry, but with a Free Trade Agreement in the pipeline it is inevitable that the dynamics will shift once the deal has been signed.”

    Printing Industries is currently waiting on statistics from the ABS as to how much of the imports are printing related, and is currently talking to companies in the industry to determine what the impact will be.

    Tchamkertenian warns that caution needs to be taken in the drawing up of the FTA. “Given the recent developments in the merchandise trade position, it is vital that the FTA with China is not only free but also fair. To ensure a fair outcome our trade negotiators need to resist the temptation of fast tracking the FTA with China.”

  • Edwards Dunlop headhunts PaperlinX honchos in Australia and NZ

    Accounting for approximately 24 per cent of the market, the Edwards Dunlop Group encompasses Raleigh Paper in Australia and leading merchant BJ Ball in New Zealand. According to the company’s release the expansion of the senior management team is designed to strengthen sales, customer service and distribution for the New Year.

    Former general manager of PaperlinX New Zealand Andrew Bull (top) joined BJ Ball Papers as CEO on the 1st December 2004. Edwards Dunlop purchased BJ Ball, the Group’s NZ merchanting arm, from CHH in 2002.

    Gordon Anthonisz, (right) former general manager of Dalton Web Paper, joined Edwards Dunlop on January 17th as general manager of Edwards Dunlop Paper. Anthonisz will initially be based in Melbourne, but is expected to move to Sydney in the latter part of 2005.

    Craig Flavell, (below) formerly manager of business-to-business operations at WC Penfold is now divisional manager Edwards Dunlop Office Products.

    While business services for Edwards Dunlop Group will remain in the Melbourne office, key functional roles will relocate to Sydney during the year to allow Tony Dragicevich to have his senior executives working as a close team.