BUSINESS PRINTING TECHNOLOGIES REPORT
JUNE/JULY 2005
Document Management Industries Association

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Dennis McGarry, CDC
Managing Editor

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Design & Layout

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ISSN 1552-3675


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FORMTRAC 2005
Preview


DMIA is pleased to announce that FORMTRAC 2005 will be released July 18, 2005. After countless hours of tabulation, researching manufacturer shipments and distributor sales, we’re almost ready for press. We didn’t want to keep you waiting any longer, so we put together a summary that gives an accurate snaphot of the forms industry today. Readers that want more information on FORMTRAC 2005 can click on the link at the end of this article.

The State of the Forms Industry
FORMTRAC 2005 estimates and projections show that overall sales of products manufactured internally by industry participants will be in the $12.5 billion range through the forecast 2005-2009 period. Sales of conventional forms will continue to decrease, but will be offset by increased sales of other products. Distributors will be able to grow their business and increase their share of industry product shipments, while many trade manufacturers of conventional forms and major direct selling manufacturers will see a decline in product sales. The forms industry as a whole has become smaller with the 2004 sale of Moore/Wallace to the commercial printing giant RR Donnelley. In addition, other factors played a role in the shrinkage that has occurred over the past three years. Those factors are:

Commercial printing produced by Moore and Wallace can no longer be considered part of forms industry shipments in 2004 and beyond after these companies were merged into RR Donnelley on February 27, 2004.
The major direct-selling manufacturers have experienced more severe cutbacks in production capacity, product lines, market coverage and sales than anticipated.
Demand for some conventional forms has declined faster than expected.
During 2001-2002, demand for direct mail printing experienced a steep decline due to curtailment of sweepstakes promotions, economic disruption following the September 11, 2001 attacks on the U.S., and the subsequent impact of anthrax-poisoned mail.
Advertising expenditures dropped during 2001-2002, triggering a decline in demand for commercial and direct mail printing. Recovery has been slow due to additional negative impact from competing business communications technologies. Direct-selling manufacturers were affected more severely than distributors.

The good news is that there are many growth areas that savvy manufacturers are taking advantage of today. Some growth areas were distinctly spelled out by four panelists at the recent DMIA Manufacturer and Supplier Print Conference in Philadelphia.

At the Philadelphia event, RIT professor Frank Romano facilitated a panel of four DMIA manufacturers: Dale Dembski, of Data Management Center; Tim Dust of F.P. Horak, Co.; George Phillips of ProDocument Solutions; and Linda Poole-Bova of Primadata Incorporated. The four manufacturers told attendees how they have evolved their traditional companies for future growth while facing a challenging document market. Each of the four has poised their companies in different areas of specialization.

Dale Dembski of Data Management Center, Schaumburg, Ill., delivered a message that documents and document fulfillment go hand in hand but due to the ramp up costs involved, document printers would be best suited by partnering with a mail-processing document fulfillment company. Dembski told the group what was important in choosing a document fulfillment center.

Tim Dust of F.P. Horak Co., Bay City Mich., explained how a traditional forms printer evolved into digital printing, eventually opening up a separate digital printing facility to complement the work being produced at the traditional form plant. Dust’s presentation focused on the workflow issues surrounding the creation of a whole new production facility.

George Phillips of ProDocument Solutions, Paso Robles, Calif., spelled out how their company chose to become a full-service security document provider. Phillips expressed the critical nature of what’s involved in making your printing plant a “secure document facility” Phillips cited the plant’s ability to commit to knowledge, training, and involvement in creating a secure plant environment that customers will trust.

Linda Poole-Bova described how Primadata, a mailing facility in Green Bay Wis., was purchased by Libman business forms, a traditional forms printer that was looking for ways to get into the complex world of variable data printing and document fulfillment market. Poole–Bova also announced that Libman Business Forms would soon become “Primagraphics Inc.” as an evolution of the entire operation.

So, while the printing industry is being challenged on many fronts, there are viable products and services that forms printers can turn into profits. In the tables and summary below, we’ll look at an industry overview, the independent segment, the direct-selling segment, and a summary of today’s business document market.

FORMTRAC 2005 Industry Overview
Year

Total Product
Shipments - $ millions

% Change

Independent
Segment Share

2000
13,973
+1.3%
55.3%
2001
13,452
-3.7%
56.5%
2002
12,975
-3.5%
57.0%
2003
12,803
-1.3%
57.5%
2004
12,244
-4.4%
61.5%
2005
12,452
+1.7%
62.3%
2006
12,455
+0.0%
63.0%
2007
12,522
+0.5%
63.5%
2008
12,610
+0.7%
63.9%
2009
12,569
-0.3%
64.7%

Manufacturers should be aware that the relative stability of projected total industry sales masks some of the turmoil within the traditional forms industry due to major product mix shifts, declining value of products and consolidation. Projected industry sales growth through 2009 is below the expected general rate of inflation, which means that product shipments in terms of constant dollars will actually decline. Part of the reason is lack of pricing power by manufacturers in an environment of excess production capacity. The core conventional forms product group that defines the forms industry will drop from 53.9% of total retail product sales of distributors and directs in 2000 to 41.2% in 2009. The product mix of current forms industry participants may contain less than 40% conventional forms by 2010.

Product Group Sales in Current Dollars
at Retail Value -
$ - millions

Year

Conventional
Forms - $

% Change
% of Total
Other
Products - $
% Change
% of Total
2000
7,537
-2.7%
53.9%
6,436
+6.4%
46.1%
2001
7,133
-5.4%
53.0%
6,319
-1.8%
47.0%
2002
6,766
-5.1%
52.1%
6,209
-1.7%
47.9%
2003
6,509
-3.8%
50.8%
6,294
+1.4%
49.2%
2004
6,310
-3.1%
51.5%
5,934
-5.7%
48.5%
2005
6,097
-3.4%
49.0%
6,355
+7.1%
51.0%
2006
5,889
-3.4%
47.3%
6,566
+3.3%
52.7%
2007
5,685
-3.5%
45.4%
6,837
+4.1%
54.6%
2008
5,447
-4.2%
43.2%
7,163
+4.8%
56.8%
2009
5,174
-5.0%
41.2%
7,395
+3.2%
58.8%

THE INDEPENDENTS

2004 FORMS MARKET ESTIMATES – Independent Segment
All sales amounts are shown in retail (end user) value of products and services.
Trade manufacturers’ shipments include house accounts, government sales and production by distributor-owned or controlled printing operations.
Retail value of forms purchased by the directs for resale is included under trade manufacturer shipments.
Trade manufacturer shipments include products manufactured by dedicated trade sales divisions of the directs.
Advertising specialty sales in 2004 reflect the June 30, 2004 acquisition of Alstyle Apparel by Ennis.

PRODUCT CATEGORIES
Trade Shipments (Distributor Sales)

2003 Sales $ Millions
2004 Sales $ Millions
% Change
% of 2004 Trade Shipments

Custom continuous forms & checks

1,335
1,305
-2.2%
17.3%

Very short run custom forms, including:
Software-compatible forms; Pack-to-pack press production

448
430
-4.0%
5.7%
Unit sets
1,047
1,040
-0.7%
13.8%
Stock TAB forms and stock papers
705
675
-4.3%
9.0%
Salesbooks, pegboard and register forms
175
160
-8.6%
2.1%
Sub-total, trade shipments of conventional forms
3,710
3,610
-2.7%
47.9%
Direct mail & premium commercial printing
378
387
-2.4%
5.1%
General commercial and quick printing products
738
795
+7.7%
10.6%
Stationery, imprinted envelopes and business cards
360
373
+3.6%
5.0%
Binders, indexes, presentation folders
230
237
+3.0%
3.1%
Labels, decals, tags, tickets, tapes, ribbons
1,240
1,265
+2.0%
16.8%
Printing and finishing services
245
285
+16.3%
3.8%
Advertising specialties and plastic cards
467
580
+24.2%
7.7%
Sub-total, trade shipments of "other" products
3,658
3,922
+7.2%
52.1%
Total trade manufacturer shipments
(Total distributor sales to end users)
7,368
7,532
+2.2%
100.0%
THE DIRECTS

2004 FORMS MARKET ESTIMATES – Direct Selling Manufacturers
Direct-selling manufacturer shipments include only internal production and services provided with internal resources.
Excludes shipments by dedicated trade sales division of directs and sales of products purchased from trade manufacturers.
Moore Wallace was acquired by R.R. Donnelley (RRD) on February 27, 2004 and most of the commercial printing produced by the two major forms industry directs was merged with RRD operations. This commercial printing volume is no longer part of production by forms industry participants and it was removed from forms industry sales starting in 2004.

PRODUCT CATEGORIES -
DIRECTS

2003 Sales $ Millions
2004 Sales $ Millions
% Change
% of 2004 Sales by Directs

Custom continuous forms & checks

1,305
1,268
-2.8%
24.0%

Very short run custom forms, including:
Software-compatible forms; Pack-to-pack press production

440
428
-2.7%
8.1%
Unit sets
570
545
-4.4%
10.3%
Stock TAB forms and stock papers
398
380
-4.5%
7.2%
Salesbooks, pegboard and register forms
86
79
-8.1%
1.5%
Sub-total, conventional forms - manufactured by the directs
2,799
2,700
-3.5%
51.1%
Direct mail products
595
628
+5.5%
11.9%

Commercial and quick printing products including:
Commercial sheetfed & web offset printing; Stationery, envelopes & business cards; Binders, indexes, presentation folders; Ad specialties and plastic cards

1,346
684
-49.2%
12.9%
Labels, decals, tags, tickets, tapes, ribbons
695
700
+0.7%
13.2%
Sub-total, "other" products manufactured by directs
2,636
2,012
-23.7%
38.0%
Total Products - manufactured internally by directs
5,435
4,712
-13.3%
89.1%
Print-related services sold by directs
557
573
+2.9%
10.9%
Total product and service sales by directs
5,992
5,285
-11.8%
100.0%
Other products & services
3,193
2,585
-19.0%
48.9%
MARKET SUMMARY

2004 PRINTED BUSINESS DOCUMENT MARKET
In addition to forms products and services manufactured and sold by forms industry participants, forms are also produced in three other segments of the broader printing industry:
Forms produced by general commercial printers, service bureau operations, mailing houses and other types of document factories.
Forms produced by quick printers and copy shops. Several quick printing franchise organizations have announced major initiatives in business document production and services using a combination of conventional printing, digital printing and electronic commerce technologies. Quick printers and copy shops produce a substantial volume of cut sheet forms and edge-glued carbonless sets.
In-plant printshops continue to produce sizeable quantities of single and multiple ply forms. Some of these printshops have been combined with computer output operations to produce statements, invoices, direct mail and other types of forms using blank roll or sheet stock. After a period of gradual decline, in-plant printing operations are acquiring high speed digital monochrome and color printers/presses and are slowly increasing production of forms and commercial printing work that was previously outsourced or purchased from commercial suppliers.
 
Major national and regional directs resell products purchased from suppliers outside the forms industry. These sales are excluded from data on internally-produced shipments of products and services and are shown separately on the following summary of the printed business document market.
PRINTED BUSINESS DOCUMENT (FORMS) MARKET SUMMARY

MARKET SEGMENTS

2003
2004
% Change

Total forms industry product shipments

Trade manufacturers

7,368
7,532
+2.2%
Directs - Internal production
5,435
4,712
-13.3%
TOTAL
12,803
12,244
-4.4%
Forms-related services provided by direct-selling manufacturers
557
573
+2.9%
Non-forms products distributed by the directs - purchased from suppliers outside the forms industry
372
380
+2.2%
TOTAL FORMS INDUSTRY SALES
13,732
13,197
-3.9%
Forms produced by general commercial printers, service bureau operations and document factories
1,690
1,735
+2.7%

Forms produced by quick printers and copy shops

995
940
-5.5%
Estimated market value of forms produced by in-plant printshops
2,255
2,175
-3.5%
TOTAL PRINTED BUSINESS DOCUMENT (FORMS) MARKET
18,672
18,047
-3.3%

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Order the whole report!
FORMTRAC 2005 includes:

Printing Industry Overview
Forms Industry Overview
FORMTRAC 2005 Product Category Data
Shipments of Trade Manufacturers
Shipments and Sales of Direct Selling Manufacturers
Product Categories and Shipment Volumes
   
If you’d like more information about FORMTRAC 2005, or to find out how you can purchase a copy, please click the button to the left.



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