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JANUARY 2013 NEWSLETTER

In This Edition...


Do Big Storms Help Reprographics?

When a big storm like Sandy or Katrina rips through a community, the first order of business is saving lives and getting things back to normal. But when the dust settles and repairs begin, can reprographics shops expect a surge in business?

The answer to that question is not entirely clear, and how a reprographics business takes advantage of the repairs plays an important role.

Money for Construction

Since the fortunes of the reprographics business closely follow the fortunes of the construction business, the first thing to consider about this question is how big storms affect construction.

Hurricane Sandy caused billions of dollars of damage along the East Coast – New York Governor Andrew Cuomo estimates that storm damage totaled $42 billion in that state alone. Congress stepped up the plate on January 15 and approved a $50 billion aid package for the area. Much of that cash will go to repair damaged mass transit systems, homes, and infrastructure, so yes, that should be a shot in the arm for the construction biz along the East Coast.

But the ultimate result is not that clear. Consider the situation after Hurricane Katrina, which blasted New Orleans in August 2005. That giant storm left the city in tatters, including 204,000 swamped homes. How did this affect construction in the city?
“There was a huge pick-up in public works construction as the corps of engineers rebuilt levees,” says Kenneth Simonson, chief economist of the Associated General Contractors of America. “However, construction on hospitals, hotels, and so forth took much longer to get going. That area really languished.”

The reconstruction after Katrina was largely funded through $142 billion in federal funds. In addition, insurers paid more than $28 billion for repairs. Not all of that money was used for construction, of course, but serious money flowed into construction company cash registers. In a New Orleans magazine article in 2010, a local banker estimated that construction spending in the metro area before Hurricane Katrina was about $1.5 billion in a good year, so the money spent after the storm was giant in comparison.

But in long run, it’s hard to make the argument that the storm helped construction. Many neighborhoods in the city remain largely abandoned, and the population of the city remains about 29 percent below its population of 2000.
“There was a partial rebound but not back to previous levels,” Simonson says.

Rebuilding the East Coast

So what will we see after Sandy? The geography is substantially different. Unlike New Orleans after Katrina, people are not flocking to leave Manhattan since Sandy. So it’s probable that everything that’s damaged now will get rebuilt.

But will the rebuilding work make up for new construction projects delayed because of the storm? That clearly remains to be seen, but the money flowing into the region will definitely help the situation. The $50 billion federal aid package, which should easily be ratified by the Senate, will ensure that. Theoretically, fat construction company coffers should help reprographics firms, but even that is not a sure thing.

There is at least one sign already that Sandy has helped construction: the U.S. Labor Department reported a gain of 30,000 construction jobs in December. “It is conceivable that a significant share of the growth in construction employment in December came in reaction to Hurricane Sandy and the commencement of rebuilding in New York, New Jersey and other affected communities,” said Anirban Basu, chief economist of Associated Builders and Contractors.

Repair Work Doesn’t Necessarily Mean Repro Work

Michael Shaw, owner of Central Digital Resources in Great Neck, New York (which is on Long Island), was in the path of Hurricane Sandy. He says the majority of work being done post-Sandy is repair work that usually doesn’t require pulling a set of plans. In some cases the damage may be bad enough to warrant that, but not often enough to significantly improve business.

Chuck Gremillion III, who now operates Gremillion Consulting Services in Houston and previously was an executive at Thomas Reprographics and A&E – The Graphics Complex, remembers when Hurricane Ike damaged the Thomas Repro office in Houston. Gremillion found the storm unprofitable for a different reason.

“As for the impact of big storms, it is double edged,” Gremillion says. “It does create a lot of new construction, but that is often offset by the implications of being out of business for several days because of the loss of power and because of damage that was caused by the storm.”

Potential in Other Areas

Even if storm repairs don’t lead to a lot more repro work, what big storms might do for reprographics is provide business in two areas: construction in infrastructure to repair damage and protect the areas hit by the storm, and business prompted by companies that want to make sure their documents are secure in the next storm.

For example, $11 billion in Sandy aid is earmarked for repairs to public transit infrastructure, which should logically lead to more reprographics work. Repro shops already providing document management for AEC firms involved in major infrastructure work will obviously profit the most from this, but work should trickle down to all players.

The other area – companies seeking reprographics assistance to improve their document safety – is probably an even larger opportunity.

“We can tell people we dodged a bullet this time,” Shaw says. “But with big storms happening about once a year around here, are your documents safe?”

Many repro firms have years of experience scanning legacy documents and storing all types of electronic documents, making them perfect vendors for businesses worried about losing building data in storms and other disasters.

Conclusion

In the final calculation, the hassles and costs of a major storm could be outweighed by new work for repro shop owners who market their services effectively. But there’s no guarantee of that – the shops that think creatively will likely do the best.

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ERA Convention to Focus on Past, Present, and Future

There is nothing like a convention to socialize with fellow repro professionals, learn about new technologies, and catch up on trends. And these days there are not many conventions left in our industry. Fortunately, there is the ERA convention!
This year’s event, April 18 to 20, will be a combined event with the IRgA, and promises to be packed with networking and education. The event is being held at the Wyndham Bay Point Resort in Panama City, Florida – who wouldn’t want to be in Florida in April?

The event will feature a golf tournament, keynote speech from IRgA managing director Joel Salus, a number of educational events, and a trade show. Here are details on each.

Golf in the Florida Sun

Don’t travel to Florida and miss the opportunity to golf with your reprographics buddies! The ERA Golf Tournament will tee off with a shotgun start at 8:30 a.m. on April 18 at the beautiful Nicklaus Course. As the name suggests, the course was designed by Jack Nicklaus’ firm, Nicklaus Design. Check out this description from the course website:

The Nicklaus Design Course is truly of epic proportion. It measures more than 7,000 yards with a slope rating of 143 and a course rating of 75.3. The layout lends itself for a truly memorable round, regardless of skill level. It plays along the natural terrain of majestic scrub oaks, towering Florida pine trees, sandy-white waste areas and salt-water marshes. The layout features “illusionary” bunkers that are strategically placed to tempt golfers through a “risk/reward” scenario and uncharacteristic elevation changes that are unique to Northwest Florida.

Who could resist that? The $100 fee for the tournament includes the cart, greens fees, access to practice facilities, and breakfast and lunch. And, of course, hours of socializing and networking!

If you don’t want to carry your clubs to the convention, you can rent them at the course for $20. Reserve your spot when you register for the convention.

Educational Events

The learning events at the convention will kick off with a keynote speech by Joel Salus, managing director of the IRgA and a long-time repro industry professional.

Joel will discuss the past, present, and future of the industry, with special input from the just-completed reprographer survey. The in-depth survey results Joel presents will help attendees get a good handle on the state of the industry.

Joel will also address some areas he feels are growing, including the MPS/FM business and display graphics (non-AEC). In addition, Joel will talk about selling and buying reprographics businesses, something he has personal experience with.

Joel’s speech will lead into panel discussions and break-out sessions on a variety of topics and business tools that attendees can take back to their shops.

The conversations and learning will continue on Saturday morning, with round-table discussions on vital topics, such as the use of social media in reprographics shops.

Trade Show

An essential part of any convention is the trade show, and the ERA Convention won’t disappoint in that area!
Exhibitors will be exhibiting the latest repro technologies and showing attendees how they can apply them in their shops. The following exhibitors have already confirmed, and others have expressed interest:

  • Canon 
  • Contex
  • Cylix
  • Dietzgen
  • Digital ES
  • Drytac
  • E-Distribution/Lynn Imaging
  • Evergreen Technologies
  • HP
  • MV Software
  • National Azon
  • Tehan & Company
  • Wynit

You’ll Love the Hotel

With all the social and educational events going on you may not even notice the hotel. But when you do, you’ll see why we chose the Wyndham Bay Point Resort. The resort is located on beautiful St. Andrew’s Bay, an 1,100-acre inland protected water and wildlife preserve off the Gulf of Mexico. The resort has a private beach, four outdoor pools, and a luxury spa. The rooms and Golf Villas all feature balconies or patios, refrigerators, and complimentary wireless Internet.
A special rate for the ERA Convention attendees is available until March 27.

Be Inspired

The 2013 ERA Convention will reintroduce you to old friends, teach you about trends in reprographics, and inspire you to dive back into your business when you return.

Won’t you join us? Register today on the convention page.

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ERA Interview: Rich Gigl, National/AZON Equipment

“We took some brutal punches but recovered!”

For this issue of the newsletter we interviewed Rich Gigl, vice president of sales and marketing for National / AZON Equipment. Rich joined the company two years ago, when they launched an equipment division specializing in distributed printing. He previously worked for KIP America, Cactus, and Oce-Bruning.

1) What is your feeling about the current state of the reprographics industry?
The reprographics business is still trying to recover from the economic shock of 2008, when print volumes dropped 60 to 80 percent. But in all of our visits with the principals of reprographics firms, there is a lot of optimism. These business owners did the painful and necessary things they had to do to right their ships, and now they're positioned for recovery. In many cases they switched their margin focus from monochrome print volume to other services like equipment sales, FM placements, and our consumable/ ink offerings.
The bottom line: We took some brutal punches but recovered!

2) Why do you think 2013 will be better than 2012?
I think the national economy is starting to slowly heal. I'm seeing more construction than I've seen in a long time. I'm seeing cranes where we haven't seen them in years. And real estate values are going up. That's a very important factor in our industry -- people have to be building, both commercial and residential, for our business to prosper.

3) Why did National Azon launch an equipment division in the middle of the recession?
I guess the simple answer is that we saw an opportunity. We were able to acquire a company with strong, vertical distribution and we expanded it to serve a broader market. We've succeeded because of the enormous shift to distributed printing. Whereas in the past an organization had one LED printer doing all the printing for a workgroup, now it is more common to have printers distributed among workgroups or trades. That really played into what we are doing: offering low-capital printers and MFP’s that can be affordably distributed.

4) When you're making sales calls, how do you distinguish National / AZON Equipment from the competition?
Our knowledge and experience of the field really help us stand apart. We already had a tremendous number of partnerships and relationships so we've been able to leverage those with our new division. A lot of firms in our business were already media customers and trusted us, so transitioning to our equipment division was not a major leap. We offer our customers high inventory levels, product expertise, and excellent customer service and communication.  Our customer base trusts us to complete the order process effectively and quickly.  Their ability to compete is many times contingent on our ability to deliver the product on time and error free.

 5) Any new products on tap for 2013?
We will add some new hardware and software products this year. It's a little too early to discuss them, but look for some special announcements from us.

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Forecast: Construction Indicators Looking Up for 2013

What does 2013 hold for the reprographics industry? Since the industry follows construction so closely, reprographics firms should experience moderate growth in 2013, based on construction industry estimates.

Here is a run-down of the latest estimates from three respected sources, the Associated Builders and Contractors, the U.S. Labor Department, and McGraw-Hill Construction.

Associated Builders and Contractors Expects 5.2% Growth

The 2013 economic forecast from Associated Builders and Contractors (ABC) predicts a modest increase in commercial and industrial construction this year. As many repro businesses get a lot of work from that segment, growth in this area is important.

“ABC predicts nonresidential construction spending will expand 5.2 percent in 2013,” said ABC Chief Economist Anirban Basu in a press statement.

In the report, which was written before Congress and the White House figured out a way to temporarily pull the country off the fiscal brink, Basu said more robust growth was expected. However, he said at that point that if the country evaded the cliff, “the latter half of 2013 could be surprisingly good for non-residential activity given the large volume of construction projects that were put on hold during the course of 2012.  However, the baseline forecast calls for only moderate expansion in nonresidential construction spending next year.”

Labor Department Reports Construction Job Growth

Another indicator of the health of the construction industry is job growth in the segment. If builders are hiring, they must be building.

The January 4 report from the U.S. Labor Department showed that the industry gained 30,000 jobs in December. This increase included 7,000 jobs in the non-residential building construction sector. The biggest growth segment was residential specialty trade contractors, who added 12,300 jobs in December.

However, the December increase made up for an otherwise poor year for construction employment. The total gain for the year was just 18,000 jobs, or 0.3 percent. So while the number is encouraging, it certainly doesn’t point to full health for construction employment.

Dodge Momentum Index Up

McGraw-Hill Construction creates a useful number called the Dodge Momentum Index. This index measures initial reports for nonresidential building projects in planning. According to a release from McGraw-Hill, these initial reports “have been shown to lead construction spending for nonresidential buildings for a full year.”

The index rose 3.2 percentage points in December, bringing it to 94.9. The index baseline, 100, was established in 2000.

The McGraw-Hill report read: “The latest month’s upturn may … be the initial sign that the uncertainty that restrained plans for construction is now easing, with the November 2012 elections now final and the fiscal cliff being averted for the time being. December’s increase for the Momentum Index was due entirely to a pickup by its commercial building segment, which advanced an impressive 9.0% relative to November.”

You can read more about this report at http://construction.com/about-us/press/dodge-momentum-index-rebounds-in-december.asp

It’s impossible to predict exactly how the reprographics industry will do in 2013, but at least these three indicators point towards growth.

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Six Tips for an Effective Reprographics Press Release

By Ed Avis

Writing an effective press release is a great way to get some publicity for your shop, whether the release is about a new service you’ve launched, a new hire, or a new location. There are countless reasons to write a release, and you’ll be impressed by the number of news outlets and newsletters that pick up your release.

Before I get into my six tips, let me tell you why writing press releases can pay off: in this 24-hour news world, news media are constantly looking for more material. If you think no one cares that you’ve installed a new 60-inch color printer, think again -- that might lead to an article in a business magazine, on a local news website, or in your local AIA chapter newsletter. And the effects of a release can be wide-ranging – imagine how many of your clients and potential clients read the AIA newsletter!

But don’t take my word for it. United Reprographics in Seattle has an active press release program, and here’s a link to one of their releases that got picked up by the website of the Seattle Post-Intelligencer. Countless potential clients have probably read this: http://www.seattlepi.com/business/press-releases/article/Seattle-Printer-United-Reprographics-Awarded-4202656.php

I’ve been involved in news media, on both sides of the desk, for nearly a quarter century. Literally thousands of press releases about reprographics, printing, and other industries have crossed my desk. After reading and writing that many releases, I’ve come up with my six top tips:

Tip #1: Start off with all the basics, and maybe that’s all you need.

A good press release tells an editor these things: What you’re trying to get attention for (a new service, an award, a new hire); who you are (the name and location of your shop); when this thing happened or will happen; how readers can use your service or product, if that’s what you’re writing about, or participate, if it’s an event; and how readers and the editor can contact you for more info..

Tip #2: Don’t exaggerate.

Tell the reporters about your new service, new hire, award, etc. in quantifiable terms – numbers, percentages, dollar amounts, output quantity, etc. – rather than in superlatives. If your new printer cranks out five vinyl car wraps per hour, please don’t say that it will revolutionize the sign business in your city!

Tip #3: Add a quote or two, but don’t make the quotes too “salesy.”

Following is a useless quote that will never get used: “Our new CEO is the most experienced printing executive in the country and wants to help you solve your printing problems.” Instead, try: “Our new CEO spent five years learning about printing from some the best printers in the field, and we’re excited to see what innovations he’ll bring to ABC Repro.” Also clearly identify the name and title of the person the quote should be attributed to.

Tip #4: Make it easy for the reporter to contact you.

I have been amazed recently by the number of press releases that don’t include good contact information – some public relations course must be teaching new students that they should dodge reporters’ phone calls or emails. Bad idea! Please list the name, phone number, and email of a person who can knowledgably comment about the topic your press release covers. Small companies sometimes list the president as the contact, and that’s great if the president really wants to handle those calls or emails. But please don’t list the president if he’s going to ignore media calls! On the other hand, make sure the person you list really knows something about your shop or has ready access to that information.

Tip #5: Email your press release to the editors you think will be interested.

I recommend your local business publication and any newspapers and broadcast outlets that cover your area. Then get creative – send your release to any websites that cover your town (Patch.com and DNAinfo.com are two sites trying to build local news websites in every community, for example); and send the release to newsletters of organizations that might affect your business (the AIA chapter; local builder’s unions or organizations; local college architecture departments; real estate organizations; the Chamber of Commerce; and any others you can think of).

Tip #6: Make your press release available on your website.

Sometimes editors researching a topic will surf the web looking for info, and having a press release easily accessible on your site will increase the likelihood that you will be included in an article.

I hope these tips help, and let me conclude with an offer to help. I would be glad to read a rough draft of any press release you write and edit it for you, just as a courtesy. Please don’t hesitate to ask!

Ed Avis is an editor and writer in Oak Park, Illinois. He was the founder and editor of Modern Reprographics magazine, and wrote for Repro Report and other print-related publications. Reach him at edavis@edavisassociates.com, 708-218-7755.

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ERA Interview: Rich Reamer, Canon/Oce

We interviewed Rich Reamer, director of product marketing for the Large Format Product Division of Canon/Oce, about how the integration of Oce into Canon is going.

1) Canon and Oce both have deep, positive reputations in the reprographics industry. How is the integration of Oce coming? When will it be complete?
Oce integration took a big step January 1st when the former WFPS division within Oce North America was integrated into a new company, Canon Solutions America. Canon Solutions America will provide Direct and Indirect sales and service for all Canon and Oce Office and Wide Format Printing Offerings in the United States.

2) What changes will reprographics shops see once Canon integrates Oce? For example, will distributorships be affected? Will brand names be affected?
There will be no change in the current support structure that is offered today. Future modifications will be at the discretion of Canon Solutions America. Details about naming and branding strategy will be provided at a later date.

3) How does the integration affect product development? Is R&D being combined?
Oce products will continue development as they have in the past. As an ongoing practice different business units within Canon Inc continue to share different intellectual properties that can be used to develop future products to address customer needs.

4) Any new products, supplies, or services on the near horizon?
There is no current update

5) Anything else that you would like the industry to know about the integration?
Canon is excited at the milestone achieved with the recent integration of Oce into our company and the beginning of a new subsidiary in Canon Solutions America.

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