The Merchant’s Tale – Print21 magazine feature

Paper merchanting in Australia is undergoing a tectonic shift following the takeover of CPI by New Zealand merchant, BJ Ball. Depending who you believe, it is either the beginning of a stable period of rational business practices in a sector that has often seemed self-destructive, or it is the harbinger of even more crazy pricing and market share jockeying. Simon Doggett, managing director, KW Doggett, is hopeful of a return to an era where solid business principles held sway. He talks with Patrick Howard about his engagement with the industry and the future of his company.

As of this year, Simon Doggett set about changing the emphasis of the family-owned paper merchant. He employed four business development managers to explore new sectors of the ever-
changing printing and paper industry.

Between them the quartet are responsible for developing the packaging, digital, label and self-adhesive, and corporate print buying businesses. At a time when much of the industry is hunkering down and waiting for the wind to shift, the move is a positive indication of the long-term strategy that empowers KW Doggett Fine Paper.

As the eldest of the eponymous second generation, Simon Doggett is managing director of the paper merchant. He has worked in the business since graduating as a chartered accountant in the 1990s. Brother Nathan is the national sales manager, sister Catherine is the core of the company’s high-
profile marketing identity, and youngest brother, Heath, is Victorian sales manager.

During his time, Simon Doggett has worked his way through every aspect of paper merchanting before taking the MD chair six years ago. Confident and relaxed in the role, he is quick and constant in emphasising the importance of the two company founders, his uncle John Doggett and father Ken. They are, he insists, still the public face of KW Doggett as well as its ethical and pragmatic foundation.

“When I was starting, I remember my uncle John coming around telling me that if I really wanted to know the business to go out and sell some paper to a customer. ‘Customers make us who we are,’ he said. It was the best advice I ever received.”

Simon Doggett is proud of the family background as well as grateful for his own finance qualifications. “KW Doggett Fine Paper is a good family business. Ken and John are the foundation of the company and we remain true to their values… respect your suppliers, meet your own credit terms and remember that staff are part of the family.”

Pictured: The new generation of K.W.Doggett management; (l to r) Simon, Catherine, Heath and Nathan Doggett.


In the past five years, the company has grown, fast. It expanded from offices and warehouses in Melbourne and Brisbane to also being a major force in the Sydney market and then again in Adelaide. It has grown from a $40m business to one that turns over $160m. In Doggett’s terms, “it has become a significant business.”

Steady as she goes

Expanding a business to four times its size is not easy and often derails a company’s ownership. Keeping control of the finances and HR while building a wider infrastructure requires sophisticated manage­ment, IT and marketing skills. For most companies it would also require outside investment but for KW Doggett, years of conservative operation left it with sufficient capital to fund its own expansion.

“Ken and John always left the profits in the business so when there were openings we were able to grow. The money is there for a rainy day. We are able to take advantage of the opportunities that become available because of the available capital as well as the quality of our service offering.”

The recent turmoil in the industry may have opened the way for the company to expand but it is not something that has much traction with Simon Doggett. He concentrates on operating a sustainable business rather than driving for growth. “It’s not about market share, it’s not about growth. We are focused on sustainable returns. We know the grass roots of the trade. I believe if we focus on doing what we do well, growth will come. It is important to respect the value offering of paper merchants,” he said.

He is looking for a return of solid business principles in paper merchanting, principles the sector has occasionally lacked in recent times. Bad credit practices and cutthroat price competition badly damaged the industry and contributed to a number of corporate failures.

While recognising that “someone will always get caught” when printers collapse, he is determined to reduce the company’s exposure. KW Doggett plays third in size with 15 per cent market share behind the two largest paper merchants —BJ Ball and PaperlinX at 35 per cent each. It is not a bad position, especially for a merchant mostly committed to the commercial offset sector.

“I spend a lot of time with our suppliers to make sure they know where we stand. Simultaneously we maintain a strong relationship with the printers. The trade wants three good channels in the market space.

“Paper merchants are very important to the supply chain, we provide a valuable service. It takes eight weeks to get paper from Asia, ten weeks from Europe. Not too many printers are capable of holding stock, they need strong paper merchants.”

Many of KW Doggett’s customers are small-to-medium sized, owner-operated businesses that comprise the majority of printing companies. While there is undoubtedly some fellow feeling for another family-owned enterprise, Simon Doggett recognises printers will only buy when the price and the service offerings are competitive. Part of that offering is being able to judge when to extend credit and by how much.

As a financial professional by training, he is often staggered by some of the accounting practices endemic in the industry. “I’m amazed at how many printers don’t know all their costs. They over-inflate the value of the machinery, don’t calculate leave entitle­ments and super contributions, and only cost their operations once a year. You’ve got to know your cost base.”

Not surprisingly, under Simon Doggett, the company leads by example. In the past 12 months it has revamped the credit department, hired a new credit manager and instituted strict credit procedures and policies.

Much of it was fired by the need to source a new insurer but it has paid off in much tighter credit control. “I know every cost in the business. We can adapt to changing circumstances very quickly,” said Doggett.

The company’s new credit regime means that printers are must satisfy a number of credit procedural checks, including in some cases a review of current financials. Most are happy to do so and it can be argued that such financial discipline is good for the entire industry. While paper merchants have traditionally played the role of banker of last resort to printers, that is changing as a result of some spectacular failures in recent times.

Paper to the mill

There is no doubt that the overall amount of printing paper being consumed has fallen. Industry figures place the drop in imports as much as 25 per cent year on year. This is placing further pressure on paper merchants, especially in high-end papers.

“It’s shrinking market. I believe there is a fundamental shift away from print. The decline in offset printing volumes has not been replaced by digital. There are shorter runs, shrinking volumes. Overall it’s a smaller pie, but we have to support the same cost structure.

“The strong Australian dollar is significant, although we buy in foreign currencies. Printers think we should be able to land the product cheaper but prices have never been this low. I’m afraid of an Australian dollar collapse,” said Doggett.

Competitive pressure leads merchants to play the price card but there is a limit to how much cost can be taken out of the supply chain before the service offering on which the industry depends is irreparably damaged.

Part of the value offering from paper merchants is making a range of papers available to the industry. This involves careful stock control and nurturing good relationships with mills around the world. It also requires just-in-time delivery. The 35 brightly coloured company trucks are a common sight around the industry, as well as representing a major cost and investment.

“Mill relationships are significant. Any brand we take into our portfolio we commit to a significant marketing campaign. Our results are proven; mills know we deliver,” said Doggett. “It’s a challenging side of the industry. There is consolidation in Europe and the US. We only deal with strong mill groups such as Sappi, Central National, Mondi, M-real and Arjo Wiggins.”

Pro bono industry

Simon Doggett is not only passionate about his business but also deeply engaged with the industry. As an active member of the Printing Industries board, he also encourages the involvement of KW Doggett with the design industry, pointing to the iconic student-designed calendar as a continuing commitment.

“We talk to design and advertising students, have an annual competition to design our calendar that goes to different universities and colleges with a design course. We also support the National and State Print Awards.”

He is concerned about public and government misappre­hension of the industry, especially its environmental credentials. For KW Doggett, the environmental profile of the mills with which the company is engaged is paramount. Good environmental practices are integral to the relationship as well as to the validity of the entire product portfolio.

He attributes the lack of a strong united voice for allowing important decisions about the industry’s future to be taken without due regard to their impacts.

“The industry needs a united voice to talk to government and the community. Look at when the government changed rules on having to opt in for annual reports. We should have been able to influence that decision.”

The failure of paper merchants to push through price rises for paper is also a concern. He sees Australia’s reputation with overseas mills in jeopardy if it comes to be regarded as a low price market. Mills may look around for other more lucrative places to sell their paper.

“There are big structural changes happening to the industry. We must keep the mills involved. Paper merchants have an educational role to play. It is important that we continue to have the ability to attract capital.”

At a time when the printing and paper merchanting industries are under extreme pressure, the steady progress and expansion of KW Doggett is a textbook case study of how continuity and professional management can define and contribute to the long-term success of an enterprise.