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Industry Insight

Kodak Announces Price Increase for Offset Printing Plates

Kodak today announced global,

By Cary Sherburne
Published: March 1, 2011

Kodak today announced global, across-the-board price increases for printing plates, the first of the “Big 3” to step up to the plate and address the climbing costs of the materials that go into manufacturing printing plates. The increase for digital plates will range from 5% to 10%, while increases for conventional plates are significantly higher at 15% to 20%. Increases are set to take effect May 1, 2011.

Kevin Cazabon, Director of Current Solutions for Commercial and Publishing, and Marketing Director for Offset Consumables, said in a conversation with WhatTheyThink, “In the past, price increases focused on the cost of aluminum. But if you look across the board at all of the materials that go into printing plates, almost everything has gone up. It is a perfect storm on the pricing front. Over the last couple of years with the recession, there has been a lot of pressure on prices for every product and every industry, and during the recession that same pricing pressure was put on raw materials. Now coming out of the recession, pricing pressures are still here but prices of raw materials have gone up significantly. We understand this has an impact on our customers, and it is something they will have to find a way to pass along to their customers.”

Cazabon points out that this is not a new situation for printers, who have been facing pricing increases for just about everything, including ink, paper and energy. “For most printers,” he said, “plates represent less than 2% of turnover, while ink and paper can represent as much as 40% to 45%. Our focus has been on delivering products that enhance efficiency and quality. If it takes a minute longer to come up to color on the press, that can wipe out any cost savings from bargain basement plates, and for most printers, it can be hard to track those costs.”

When asked why the difference in increase between digital and conventional, he reports that is due to scale, saying, “Conventional is a very small part of our portfolio today, and we don't have the scale we used to. The cost to manufacture these plates is much higher than it was in the past.”

For many Kodak customers still using film-based platemaking processes, these increases may be the factor that finally pushes them to move to CTP, which is something they probably should have already done anyway.

In a recent column, Dr. Joe Webb, WhatTheyThink's Director of Economics & Research, said, “Print demand is in a secular decline because of electronic media, and that secular change is still very much in effect. You don't see Apple or Google acting cautious. We can't either. Waiting for things to get better will only delay the systematic restructuring that most print businesses will need as these changes continue their course...For these reasons, print businesses must be prepared to adapt to this marketplace with new services and to be certain that their equipment reflects today's market conditions as well as where the market is headed.”

Sage advice, as printers continue to be faced with inflation in their input costs.

We suspect that Kodak will not be alone in raising the price of printing plates, as all of the manufacturers face the same challenge of rising cost of materials. Regardless of which supplier a printer is using for plates, now is a good time to take advantage of the professional services most, if not all, of these suppliers offer to conduct a thorough audit of operations. As Cazabon indicates, “To be competitive and to save even 1% or 2% in costs can be the difference between being in the red and in the black; it is what printers need to do these days.”

Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries.

Cary Sherburne is available for speaking engagements and consulting projects. To get more information contact us.

Please offer your feedback to Cary. She can be reached at cary@whattheythink.com.

 

Discussion

By Vytas Barsauskas on Mar 03, 2011

All the printing industry manufacturers are challenged by the increased cost of managing their business. I work with companies in the paper and ink business and they continually battle controlling cost through manufacturing process enhancements, manufacturing yield improvements, raw material optimization, the list goes on. At some point the paper, ink and plate companies have to make prudent decisions and let the market decide where they want to source their products, weigh product and services against price.
I’m sure this was not an easy decision for Kodak as they will not generate increased revenues from this announcement.

 

By Jay Faulkner on Mar 08, 2011

Kodak’s announced price increase is not unexpected in light of a continued rise in raw material costs. Aluminum, which represents the single biggest component in producing printing plates, has seen a 44% increase since July of 2010. This has been driven predominantly by energy costs, which are also impacting other material components including solvents and resins. To complicate matters, the cost to deliver products has been creeping up due to added fuel surcharges. Manufactures have worked diligently to control the process and maximize efficiencies of scale, but inflationary cost increases are unfortunately part of our collective reality.

 

By many on Mar 09, 2011

This ia a very bad moment for a price increase for Kodak, this company is in a very deliacte twister, everybody knows about the bad financial performance of Kodak for the last 5 years, I understand that driver of this increase is the pressure of raw materials priceing, everytime when customers recive a price increse for any reason, they search for another options, with this movement, Kodak could loose market share and could be the final movement for this company. thats why companies have to make good decisions in order to establish a good shape taht helps companies to resist this worldwide recession of the last 2 years

 

By Offset Printing on May 07, 2011

I think this price increase comes as no surprise. We use Kodak for our MAN press. We've had prices increases from our ink and blanket supplier too.

 

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