'Mega printers' studied by PRIMIR.

A recent study from PRIMIR (the Print Industries Market Information and Research Organization) titled "Mega Printers' Impact on the North American Print Market" is now available.

According to the study, merger and acquisition activity among printers in the graphic communications industry has resulted in a new breed of printer--the "mega printer."

These mega printers appear to do business differently than their smaller brethren on many different levels.

To learn more, PRIMIR commissioned Sherburne & Associates with J Zarwan Partners to explore their business practices.

Additionally, PRIMIR wanted to learn the long-term impact of this continued consolidation on the overall industry--what's driving these large-scale acquisitions, impacts on vendor companies servicing these mega printers and the overall expectations for the industry at large.

According to the report, "This group of companies (worth over $750 million in annual sales) represented $32.584 billion in revenue in 2007, and comprised more than 30 percent of the commercial print market.

While overall revenues for the mega printers declined during the study period of 1999 to 2007 by about 6 percent, they represent a growing share of a declining commercial print market. Thus, not only are mega printers themselves increasing top-line revenue, but they stand to play an ever-larger role in the rapidly changing North American commercial printing industry.

The study revealed a number of interesting points. While more efficient buying practices are a hallmark benefit of these large companies, in reality it appears they are neither more efficient manufacturers nor more efficient purchasers.

Additionally, many consolidation economies-of-scale are being offset by increased organizational complexity, loss of flexibility, intense competition for shrinking sales volume and correspondingly relentless pricing pressures. The public companies have the added complexity of the pressures of Wall Street to deliver increased operating and net margins results.

The research also found that each mega printer operates very differently. However, in most instances, purchasing decisions for capital expenditures (presses and equipment) are on a schedule and planned well in advance, but these decisions come from corporate.

Other equipment, software and supplies and consumables like paper or ink may be decided at the plant level, sometimes with geographic or shipping consideration in mind, but with a limited number of suppliers on the preferred list.

With the current economy, there is no doubt that the merger and acquisition activity will continue, and the few successful/profitable mega printers will serve as role models for the others. Although the number of firms in the industry is declining, the research team reported that the remaining firms should demonstrate a healthier printing industry.

The study, "Mega Printers' Impact on the North American Print Market," was released exclusively to PRIMIR members in early 2008 and is now available to other industry participants for $4,500.

The Print Industries Market Information and Research Organization (PRIMIR) provides in-depth research and analysis for the graphic communications industry. PRIMIR research is funded by member dues as well as through support from the NPES.

PRIMIR annually provides more than $600,000 in current research studies, including relevant market data and detailed information on graphic arts and related fields. More info: PRIMIR, 1899 Preston White Drive, Reston, VA 20191; [phone]; fax: [phone]; web: www.primir.org.

at a glance

* Mega printers have more than $750 million in annual sales, representing $32.584 billion in revenue in 2007.

* Mega printers now comprise more than 30 percent of the commercial printing market.

* While overall revenues for the mega printers declined during the study period of 1999-2007 by approximately 6 percent, they represent a growing share of a declining print market.

* Mega printers stand to play an ever-larger role in the rapidly changing North American commercial printing industry.