Frank Romano: This is Frank Romano for WhatTheyThink.com. We’re here in Hong Kong with two Americans who are consultants to both printing companies here in China and to print buyers in the United States. Let’s talk about processes. So, Joe Pesci, what’s happening, is offset lithography still the dominating process?

Joe Pesci: I believe it is. In most of the book printing, certainly, and in a lot of the packaging operations offset is still the dominant process. Many of the larger printing companies will have 10, 15, 20 offset presses in one operation. But I think in certain areas of Flexo and Gravure ad and packaging, these processes are becoming stronger. Gary’s the expert in those areas.

Gary: Yes, we’re experts all right. Flexo has struggled here to gain a foothold in the narrow web label market where in China and most parts of Asia, Letterpress remains the dominant printing process.

Frank Romano: Letterpress, that’s amazing when you think about that.

Gary: It is. They’re using the Nyloprint-type plates and it’s all UV ink. A lot of these machines are manufactured, others, the CYMK machine, there’s the Tyo Machines, Japanese, Taiwan manufactured. On the Wide Web Flexo side, it’s also really been a struggle for Flexo to gain a foothold in all of Asia. We’re speaking about China. Just recently, in the last two to three years, an additional 10 Wide Web Flexo presses have been brought in and used by really just a handful of large printing companies. Bear in mind, these printing companies are not just Flexo companies; they’re predominantly Gravure printing companies. They may have 15, 25 Gravure presses and maybe they start out with one Wide Web Flexo. There’s some WNH’s here, there’s no cragas, there’s quite a few Comexi’s that are here and that’s what’s going on there. Where Flexo on the corrugated side has been here for a long, long time and that’s not an issue.

On the Gravure side, Gravure remains king. The Gravure cylinder costs are incredibly low, unbelievably low compared to the same unit cost of the photopolymer plate. So that’s a challenge for the Flexo suppliers in the market.

But the winds of change are starting to blow. You’ve got more brand owners moving towards the Flexo process because it’s perceived and it is in part and parcel is more environmentally friendly than, let’s say the heavy metals found in Gravure cylinder making and also some of the inks; the solvents in the Gravure inks maybe a little bit more dainty.

Frank Romano: Lastly, what’s happening with the digital printing? I’m seeing there are a lot of Indigos here in China.

Gary: Yeah, there are.

Frank Romano: There’s one company that has 100 of them?

Gary: Well, there’s a company called – there’s a company in China that has five locations. And they’ve been in business for over 25 years. And each location has a fleet of Indigo presses. And they’re adding, they have – it gives them the power to offer clients short run length type of products, but they’re also integrating digital into some other processes, for instance like packaging. They’re doing some packaging. We’ve been doing labels for like limited sample runs and things like that. We’ve been doing labels and sample making for labels on digital presses.

And so the applications are there and they’re growing.

Frank Romano: Have you seen any digital printing in the book market?

Joe Pesci: When I go around to the big book printers, what I’ll see is, each one will have a digital press and they’re using it for different applications. I see some calendars and things like that, but also; they’re using it for proofing. Now I don’t think it’s color proofing, but they’re substituting their blue lines for digital output. So, almost every printer I’ve gone into recently has at least one digital press.

Frank Romano: So, it’s starting to gain traction in China.

Joe Pesci: Yes, I think so.

Frank Romano: Great. Thank you both very much.

Gary: Thanks Frank.

Frank Romano: Thank you.