FUJIFILM Graphic Systems hosted the first of a two-part webinar series where the company discussed insights and feedback from Printing SA’s recent engagements with Government on how their members have been directly affected and some of the measures being implemented in order to rebuild and recover.
The South African Typographical Union (SATU) also highlighted the impact on the labour force and measures they have implemented on behalf of their members to ensure that they assist in the rebuilding and recovery of the printing industry.
Guest speakers:
•Printing SA: CEO – Dr Abdool Majid Mahomed.
•SATU: General Secretary – Edward De Klerk (representing labour union).
•FUJIFILM Graphic Systems General Manager – Grant Potgieter.
•FUJIFILM Graphic Systems Product Manager – Wide Format: Anja Kirton.
This online event was sponsored by FUJIFILM Graphic Systems and the new Acuity Prime in partnership with Printing SA and SATU.
Questions put to the speakers included:
1. In your experience and respective areas, including recent engagements with government, what insights can you share on the impact that the underperforming economy, Covid-19 and the recent unrest has had on the printing industry?
Dr Mahomed
On a macro level, multiple downgrades with ratings agencies have caused a big problem for us in terms of securing international investment.
The second big problem is Eskom’s inability to provide electricity and this affected the profitability of our member companies in terms of much unwanted downtime that they had to endure, burdening companies with extra costs because some of them had to purchase generators. The companies that couldn’t afford them had to weather the storm and manage the downtime in one way or another. The third biggest problem is South Africa’s staggering unemployment rate, which according to Stats SA is currently 34% – one of the highest in the world.
Then, in terms of Covid, we all know that during the hard lockdown, all our companies – in fact the whole country – came to a standstill for 5-6 weeks. Only some print and packaging companies that were involved in essential services could operate, and with scaled down turnaround operational times. The recovery from that hard lockdown period is not yet complete – there is still a lot of catching up to do. It is nothing like in pre-Covid times in terms of workflow.
The other impact of Covid was the fact that online purchasing and delivery services were ramped up, and those that only offered litho printing as a service found that if they had digital printers instead they could have taken advantage of this trend. Regarding the damage caused by the recent looting and insurrection, it is estimated that about R50 billion worth of damage was done. One member printing company’s factory in Pinetown was completely burnt down. Other printing companies endured major damage to infrastructure and equipment, and over 10,000 jobs were affected in the manufacturing and retail industries. The supply chain network between Gauteng and the ports of Durban and Richard’s Bay were also affected. Then we had the Transnet hack that affected the movement of goods via rail, road and sea.
Now, fortunately, we can say that things have stabilised. The lockdown has moved down to level 2, which hopefully will open up new parts of the economy, in particular the tourism and hospitality sectors, which I’m sure will impact positively in terms of the printing, packaging and signage industry in general.
De Klerk
Post-Covid, there have been various impacts even on the printing sector, and government not declaring the entire sector as essential has impacted this sector. As a result, we have seen a reduction in the workforce in the printing sector. The hard lockdown had a massive impact on us. We saw many companies experiencing retrenchments and short time, impacting negatively on members and on the union’s income stream. But I do not believe we have to lose hope. We can jointly find a solution to turn around the printing industry and the sector and eradicate this high level of unemployment.
Potgieter
The printing industry is of vital importance to the economy. From an employment perspective, we have about 45,000 employees in our sector. That speaks of an impact not only to the printing sector, but it has an impact on South Africa’s economy as a whole.
Having travelled a lot after lockdown, much of what I have heard in the industry is that the economy was in a bit of a free fall already prior to Covid. Covid obviously accelerated that and with the closure of businesses and key industries such as hospitality, this has had a massive bearing on our print operators and our customers in the market. This includes the hospitality and events industry, and the printing that would be associated with that in terms of flyers, menus and more. It includes not just printing houses, but finishing houses too.
There is a massive impact down the line, like the loss of income and the natural constraints of cash flows. Many of our customers are running on reduced salaries, short time in factories and sadly, many section 189s. Now as the industry switches on, we are trying to do so with reduced staff complements. The looting and insurrection has also left many of our customers hesitant to invest in the industry for the foreseeable future.
Access to finance is also difficult at the moment. Banks need to start coming to the party a little bit more, loosen up and offer better credit lines for customers. Businesses such as ourselves also need to find unique tailored financial solutions for our customers in order to help get their businesses back on track. However, the positivity we hear from the industry and the scope of hope and belief, as well as taking that hope and turning it into reality, is amazing.
2. What measures has government put in place to address the rebuild and recovery of the printing industry, and what initiatives has Printing SA introduced to assist companies to become more productive and efficient?
Dr Mahomed
The President recently announced a recovery plan in which two government departments played a key role: the Department of Trade and Industry (DTI) and the Department of Small Business Development. They have garnered the support of many agencies like the Industrial Development Corporation, the National Empowerment Fund and the Small Enterprise Funding Agency.
All these agencies have put together a sum of R3.5 billion that have now been made available for registered companies who have suffered losses during this insurrection. The DTI’s MCEP Economic Stabilisation Fund will offer concessionary funding to affected companies through interest-free loans to the tune of R400 million.
Government has also announced the creation of Industrial Development Zones in major metropolitan areas to encourage overseas investment into local manufacturing: Gauteng hubs (OR Tambo aerotropolis area, Tshwane automotive hub, western areas like Carletonville with agro-processing, and southern regions with iron and steel). Tax rebates and other incentives are to be offered to start up manufacturing enterprises and to create new jobs.
The SA Chamber of Commerce and others have also come up with various programmes. The South African Chamber of Commerce and Industry (SACCI) have introduced webinars about how to start up new businesses in South Africa.
Printing SA has an agreement with Productivity SA offering member companies preferential rates in terms of three core programmes that they have:
•Business turnaround and recovery.
•Competitiveness improvement strategies.
•Research innovation and statistics.
3. What help is Government giving to stop a good portion of cheap prints being done by other countries? And how can the industry band together to put pressure on government to actualise the localisation agenda within the sector?
Dr Mahomed
We can raise issues of our members regarding import duties and tariffs on their behalf, and can propose new tariff codes. SARS has a list of items that can be imported either duty free or with duties payable. The Africa Free Trade agreement will allow all companies across the continent to benefit from one another. It’s an opportunity for multinationals to locate big companies across Africa and use South Africa as a springboard to do so. Proudly SA, which Printing SA has a very good relationship with, has embarked on various initiatives to ensure and encourage all South African citizens to buy and manufacture locally. The DTI have 16 sectors for preferential procurement by government, which Printing SA is trying to become part of. We are hoping to work with them also in developing a master plan for the sector.
4. What are some measures motivating National Economic Development and Labour Council (NEDLAC) for policy transformation?
De Klerk
NEDLAC is in ongoing discussions with the President in trying to find ways and means to reboot the economy. This is an opportunity to co-construct the industry jointly, to ensure there is growth and security for the industry. There is also the need to engage with suppliers and create an equipment manufacturing sector within the country. Collaboration is of vital importance.
The Fujifilm Acuity wide format range
Kirton discussed the importance of the new Fujifilm Acuity wide format range, which presents exciting new possibilities and forms part of the blueprint to the recovery for wide format print providers who are forward-thinking, willing to break from the traditional ways of thinking about wide format print and willing to compare feature by feature.
‘We want to bring equipment to customers to improve costs, venture into new markets and improve processes. The Acuity Prime range is the best possible solution for ROI in the current climate and is geared for those, like us, who are concerned about sustainability. It also allows for more applications,’ said Kirton. ‘The printer is designed to offer something different, both sustainably and economically. It’s important to look further than just print. Businesses should ask themselves: ‘what we can we do with this print?’ and ‘How can we add value?’
5. What is international research showing in terms of trends within the digital print segment? And what are the potentially high growth sectors?
Potgieter
From a marketing perspective, the world has become more about shorter-run marketing campaigns and that is what our technology has evolved to. There are also great combinations between the old way of printing in terms of litho printing and incorporating digital printing into one’s business. When we sell digital equipment, we are not about deterring businesses from litho, but rather complementing that existing technology with digital, thereby diversifying a business’s offerings. There are ways to combine litho printing and digital, and we sell technologies to complement these types of businesses.
There are so many different technologies (like data security, variable printing, bar coding, etc.) that we can still incorporate. Inkjet is on the rise and from a wide format perspective, direct to substrate printing is growing rapidly. It is about businesses carving niches, for example, in areas like glass printing.
We have also seen growth in the packaging industry – an industry worth billions of dollars. It becomes quite easy to diversify your business and grow into new markets by investing in digital technology while not replacing what you have been doing in the past.
Watch the full webinar:
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