Devaluation of Canadian dollar also a key factor
Some major equipment manufacturers recently increased prices for printing plates. These moves seem to have one thing in common: the surging costs of raw materials. But what most printers may not be convinced of is that, especially for OEMs, any price increase is viewed as an absolute last resort. Some OEMs have been absorbing these increases on their own for twelve months to delay the inevitable printer’s pain. Over my 45 years in the industry, when I discuss price increases with any OEM, it’s like talking to a dental patient waiting to have a root canal. But in their defense, there are other factors that must be considered.
For example, federal or regional government regulations (particularly tariffs and the U.S.-Canada exchange rate) can affect the pricing of certain source materials, as well as the plates themselves. Prevailing economic conditions in the country of origin, plus the number of sales-channel intermediaries and their expectations are also important. Usually, the longer the chain, the higher the product costs will be. Then there’s the amount spent on product development and testing – even packaging, promotion and distribution. Add in fuel costs that, in turn, affect transportation costs. And don’t forget fluctuating labour costs! Bottom line: many of these factors are simply outside the control of OEMs – and it frustrates the hell out of them, believe me. Here’s what three of the top printing plate manufacturers – Kodak, Fujifilm and Agfa Graphics – had to say.
Kodak announced a global price increase (up to 9%) for its offset plates. For a year it’s been absorbing significant increases in costs for raw materials – including aluminum, chemicals and packaging materials. “The printing plates market is both technology-intensive and cost-competitive,” said Brad Kruchten, President, Print Systems Division, Kodak. “As a result, there’s no room for us to continue to absorb these escalating raw materials costs without raising our own prices. Implementation will affect our newest and most technically-advanced products the least, while our more mature offerings will see higher price increases,” he added. “This, in turn, will help drive long-term viability, profitability and sustainability for our printers and our industry partners.”
Fujifilm North America also cited raw material costs – especially substantial increases in the cost of aluminum, the volatile costs of labour, and other related platemaking costs. Efficiencies in manufacturing were also negatively impacted because of the decreasing use of traditional plates, said the OEM. Result? The cost of Fujifilm’s offset printing plates rose by up to 8% recently. “We absorbed cost increases of raw materials, labour and other production costs for twelve months to try and avoid passing on these price increases to our customers,” said Todd Zimmerman, Division President at Fujifilm North America’s Graphic Systems Division. “Unfortunately this situation is unsustainable. These price increases are a necessary step to maintain our production capabilities and continue to service our customers.”
Agfa Graphics stressed one other key factor that affects the rising costs of its printing plates. “The devaluation of the Canadian dollar versus the greenback, has significantly raised the landed cost of printing plates in Canada,” said Ruben Silva, Vice President, Sales and Managing Director at Agfa Graphics Canada. “The dramatic increase in litho-grade aluminum just makes the situation even more critical. We’ve been working very hard to improve our manufacturing efficiencies, but had to increase prices on two different occasions in order to continue providing the highest level of quality and services that our customers have come to expect from Agfa Graphics.”