05 April 2020 Print Companies

Covid-19: Industry reels as orders vanish

The UK printing has halved in capacity in the two weeks since the government imposed lock down and there are fears that many print businesses will never recover.

The UK printing industry has seen more than half of its order books wiped out in the two weeks following the government imposed lock down.

And without the furlough and business support packages, several thousand businesses would have already filed for administration. In a submission to the Business Energy and Industrial Strategy, the IPIA/BAPC argued that the actions “have stayed the hand of more than 2,000 print supply chain businesses that were planning to go into administration” the same week.

The BPIF is believed to have reached similar conclusions. Companies in all sectors have furloughed staff or mothballed their operations until the crisis has passed.

The feedback has at least won one battle by earlier responding swiftly to calls from the government for impact statements on how Covid-19 and proposals would affect the industry. At that time there were fears that the entire print industry might be closed down. That has been averted and print deemed, for the moment at least, an essential industry.

Printers may yet be faced with closure, along with others that are teetering on the brink as orders across the board have been cancelled or because the crisis period will damage cash and capital reserves so much that any pick up will stretch these resources beyond braking point.

The furlough proposals have been criticised from all quarters. The requirement that to qualify, staff must do no work for three months is too restrictive for printers and for small businesses, in particular where multi tasking is already in place.Following representation from print and other industries, this has been amended to a minimum of three weeks.

In one case a study that the IPIA/BAPC is presenting to the BEIS, a small printer with two in the studio could put one into furlough and then find that the employee that continues to work has to self isolate. As a result the submission suggests a way that staff could be rotated in and out of furlough as need required, and that individuals would qualify provided they were active for no more than a month of working days in the three month period.

The BPIF has also called for further action around the CBIL scheme to lend to businesses that banks cannot lend to in the normal course of business.

“The impact of coronavirus is huge on our industry, and direct government actions to support those businesses, and individuals, is of urgent priority. We know Government are listening to UK industry, and we have welcomed the great intentions of support – but hope to receive further clarification and actions on points raised above as crucial to the survival of our industry,” says BPIF CEO Charles Jarrold.

However, the fall in orders will hit print companies hard. Industry suppliers have seen investment projects frozen and any installations that have been underway continue with difficulty because of the requirement to remain two metres apart. Printers have furloughed staff, if only perhaps so that these people can receive pay as part of the government scheme rather than because they have any hope of surviving the crisis.

Support is available from almost all suppliers, if on a reduced scale, and is often reliant on remote diagnostics and repair. Routine maintenance visits have ceased. Xeikon is typical. CEO Benoit Chatelard says that 60% of its staff are working from home and that it has built up stock of essential items because of concerns over the resilience of its supply chains. "We are using tele diagnostics and support so that customers can make fixes themselves and reduce the movement of people. We are concentrating on repair and fix rather than preventative maintenance."

Bettine Pellant, chief executive of industry suppliers' organisation Picon, reports that the furlough scheme has saved some of her members, temporarily at least.

"A lot have furloughed staff, but the scheme has come in for widespread criticism – it's just not flexible enough," she says. "A lot of companies are wondering how long that can keep going. At the moment engineers are out there repairing machines because print is still an essential industry."

Heidelberg reports that its customers in packaging, especially of food and pharmaceuticals, or else serving the NHS, are open, though perhaps with a reduction in capacity. In commercial print, Heidelberg reckons 60% remain open, but are working at only 50% of capacity.

Koenig & Bauer has similar experiences, noting also that book printing is continuing at high capacity. If publishers have no trouble finding printers there are other issues in the supply chain. Book shops have closed, leading to the major book distributers and warehouses to suspend operations. Gardners had a change of heart and has reopened, and Amazon says it is continuing to supply, but supply chain disruption may hit this part of print.

Likewise, magazine publishers have been quick to take action, closing titles that were already looking vulnerable. Future has closed six titles including Official Xbox Magazine: rock music weekly Kerrang! has suspended publication for three months citing difficulties in distribution, this also being the reason why there has been a wholesale closure of free distribution newspaper titles. ES Magazine, distributed with the Evening Standard in London, has been suspended.

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Covid-19 bites

Covid-19 bites

Half the work of the UK printing industry has dried up, putting more than 2,000 businesses in peril. And there are calls for modifications to the furlough scheme to introduce the flexibility that the industry needs.

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