A Review of, and Prospects for, Printing Industries in Eastern Asia

Asia’s 3.9 billion people are almost 60% of the world’s population. For more than 100 years Western Europe and the United States have dominated world economic activities, but that is now changing. In recent years the manufacturing of consumer products has rapidly advanced in many developing countries, especially in Asia which is home to more than half the world’s people. Facing enormous demands from their growing domestic economies, industrial production in East Asian nations in particular is growing at an unprecedented rate. For example, China produced less than 8 million tons of paper in 1988; in 2008 it will produce 80 millions tons, and it is expected China will switch from being an importer of paper to an exporter by 2010. In fact, though the United States has been the top paper consuming nation for more than 100 years, China is now on track to soon take that spot. Here are several more interesting facts relating to developments in the East Asian printing industry that are sure to have far-reaching consequences.
(1) Japan: As the earliest industrialized country in Asia, Japan not only possesses the most advanced printing technologies in the world, but it has also created a solid foundation for itself in the manufacture of printing equipment and materials. In the 1980s Japanese companies began to dominate international print-related markets, and in the decades since they have expanded their importance to a broad range of products in the printing and packaging industries. Annual paper consumption in Japan is now at 30 million tons; that is about 230-250 kg per person/year. In 2006, the output of Japanese printing industries reached 7.35 trillion Japanese yen (US$65.4 billion), their best results in 15 years. Back in 1985, when the total output of local printing industries first reached 5 trillion Japanese yen, industry analysts predicted 15% annual growth through the year 2000. While those predictions were rather optimistic, in the first 6 years they were able to maintain 12% annual growth, reaching an output of 8.9 trillion yen in 1991. But then the growth bubble burst, and industry figures stood still or became negative year after year for more than a decade. In 2004 industry output began to grow again, lead by PS plate and CTP, which experienced high growth rates of up to 20% a year. For the most part, during the downturn print runs became smaller and more varied, but prices also dropped because of competition. As web communications grow worldwide, Japan still tops the world in per capita newspaper readership, but as in many other developed countries Japanese publications complain that the younger generation spends 4-5 hour a day on the Internet and much less time reading paper media.
There are 1,450 commercial web press sets in Japan; often three pressmen will operate two web presses at a time. In this age of short runs, 8-unit presses that can print both sides in 4 colors are welcome in Japan, thus the Japanese market is now seeing double-deck 8-unit presses that save a good deal of production space while meeting short run needs. Recent figures show that Japan’s two largest printing companies, Dainippon and Toppan, each earned more than 1.5 trillion yen annual revenue, which is about 40% of the Japanese printing industry output. These two industry giants are also broadening their businesses to include semi-conductors, photo-electronics, building materials and security printing. In Japan, printing industries on the whole are concentrating on automation, labor saving advances and environmental protection efforts, and they now lead the world in these areas. They are also seeking to import printing services.
(2) China: After a decade of blazing economic progress, the output of China’s printing industry remains above 10% growth per annum. In 2006, industry output reached US$52 billion and paper consumption reached the historic peak of 65 million tons. In 2001 paper consumption in Japan and China both topped 30 billion tons; but over the next 5 years China more than doubled its paper consumption, a growth record never seen in any other country. However, similar growth is unlikely in the future because supply cannot keep up with such demand, especially considering the enormous environmental and biological impact that would arise from attempts to get the needed pulp from dwindling forests around the planet. Three years ago Chinese paper consumption stood at 35 kg per person/year, substantially lower than the world average of 50 kg. Yet a noted industry expert still predicts China will eventually surpass the current U.S. usage average of 300 kg per person/year, which is staggering considering China’s population is about five times that of America. Of course, much of the growth in China is related to export rather than domestic consumption. In my discussions with this expert regarding future average paper consumption in China, we both agreed that the figure will likely continue apace until it reaches 100-110 kg and then it will proceed far more slowly.
Much of the recent rapid growth of the Chinese printing industry relates to developments in quality color printing for export markets, rather than in the traditional areas of packaging or simple one-color manuals accompanying products made for export. Most of China’s printers are located in Canton province along the Pearl River, followed by those in eastern China around Shanghai and the Liao-Tong peninsula. Pearl River region printers tend to hail from Hong Kong and specialize in book manufacturing, magazine printing and packaging. Printers around Shanghai are commonly engaged in business with Pacific rim countries and are growing at nearly 20% yearly. Printers in Liao-Tong peninsula tend to focus on the Japanese market.
The manufacture of printing equipment in China has steadily grown and now several well-known printing machinery companies, including Heidelberg, KBA and Mitsubishi, have each set up production lines in China. Famous printing plate manufacturers such as Kodak, Fuji and Agfa have also all invested in Chinese plants, and each reports expanding productivity. In 2005, China exported US$400 million worth of printing equipment and supplies, a remarkable 53% increase over 2004, while 2006 exports came to US$518 million , a 29.1% jump over 2005. China’s high growth in printing-related exports balanced the country’s imports for printing industries needs. In 2006, printing productivity in China came to 380 billion RMB, distributed as 34% for packaging printing, 21% for publications, 14% for newspapers (this percentage has dropped by about 6.5% over each of the past 3 to 4 years from a high of 33%), 5% for prepress work, 4% for commercial forms, 3% for sheet-printing, and 19% for other categories (including 1.8% for new rapid-growth items). In China, 996 foreign printers (including 838 doing packaging and related printing services) account for a very small proportion of the country’s 100,000 printers, but the productivity of these foreign printers is a substantial proportion of China’s printing industry; 30 foreign firms are ranked among China’s 100 biggest printers .
(3) Korea: In 1997 Korea experienced a severe financial crisis that required IMF involvement to help resolve it. A decade later Korea’s economy is again experiencing high growth, and average annual per capita income has reached US$20,000. Offset printing occupied 52% of Korea’s printing market in 2005 and is expected to maintain, at least until 2010, the 4% growth rate it has experienced since 2000 (though the rate is projected to shrink thereafter due to advances in the toner printer market). While gravure and flexo printing are growing, screen printing is stuck with zero growth. Digital and large format inkjet printing, on the other hand, have enjoyed very high growth that is expected to increase ten-fold and be worth some US$900 million within a decade. As Korea developed export markets in the 1970s, firms such as Ton A Printing expanded their commercial web-press and set up offices in foreign countries. Paper manufacturing in Korea has now reached12.5 million tons per year, the third highest in Asia; domestic consumption of paper is 9 million tons and Korea is a major supplier of high grade paper in Eastern Asia, exporting to Hong Kong, China, across Southeast Asia, and to the United States. Korea is an important market for Japanese printing equipment, especially after 2006 when China cancelled the duty-free status of imported high performance printing machines.
(4) Hong Kong: The printing industry is the territory’s largest source of employment; and Hong Kong’s total industry output is ranked third in the region. Over the past 20 years, approximately 70% of Hong Kong’s printing companies moved into neighboring Canton province in China, and from there they supplied packaging for export businesses. Most printing orders in Hong Kong are for export, and include many types of publications, but especially children’s books and magazines. Some packaging business is for direct export as well. As Chinese land and labor costs gradually escalated in recent years, and benefits for foreign investors have been cancelled, many companies lured to the mainland are now returning to Hong Kong, where many supporting specialized businesses and a well-established and convenient infrastructure geared towards international trade make for overall lower costs. Well-known universities such as Oxford and Cambridge have opened print purchasing offices in Hong Kong, as have other major publishers from around the world, in order to place printing orders in both Hong Kong and Southern China. Some local printers utilize websites to obtain printing orders from customers in the United States, the UK and Australia, and recently business has expanded to Europe and Japan. All printing paper in Hong Kong is imported from Japan, Korea, Taiwan, Europe or China. Overall, Hong Kong is enjoying a booming export-oriented printing business; the total value of export printing was HK$15,437 million in 2005.
(5) Taiwan: In 2006 the total output of print-related industries in Taiwan was US$6.1 billion, which was down from 2005. The decrease was attributed mainly to lower prices, since print quantities remained steady. Print revenues have been heading downward in Taiwan by about 2% a year recently. Figures show that 45% of orders were for packaging, while publications and advertisements account for 32% of output, printed forms were 6.5%, 5.4% was for screen printing, digital printing was 3.5%, security and IC cards were 3.1%, and the remaining 4.5% of market output was for other items. Offset publication printing takes up 65% of production in the Taipei area. Packaging labels keep 20% of domestic printing presses busy. Printing in specialized manufacturing industries related to fields such as photo-electricity, integrated circuits and electronics also continue to grow rapidly in Taiwan. For instance, since 2002 Taiwan has led the world in the production of CD-R and DVD, resulting in the need for many screen and waterless offset printing presses. Growth in packaging printing has been slow, but many printers are hoping RFID cards will be a high-growth item in the near future.
(6) Countries in Southeastern Asia
A) Thailand: About 112,000 employees work in printing industries in Thailand, and the country’s paper manufacturing output is growing (though paper consumption of 42 kg per person/year remains below the world average). Printed materials for 12 years of compulsory education account for a large share of domestic printing output, while government encouragement for the development of Thai food and culture worldwide also supports printing. In order to promote printing exports, the Thai government has canceled duties for 100 print-related items. In 2006, printing exports from Thailand reached US$1.183 billion, an increase of 15.6% over 2005. The prediction is that print exports for 2007 will again hit a 15% growth rate.
B) Malaysia: In order to comply with JIT requirements for export production lines, printing industries in Malaysia have had to sacrifice the advantages of long runs for batch deliveries. Savvy printers are enhancing their web presence and networks to offer variable data printing services; some report 50% of their business is now from clients providing electronic DTP files.
C) Philippines: The local printing has been weak for quite a while, and 65% of 5,000 printers in the Philippines report less thanUS$100,000 in revenue. Nevertheless, offset printing has been growing and a few large printers earn more than US$5 million annually. Philippine printers realize the need to compete with electronic media as Internet communication continues to grow in the country.
D) Indonesia: Paper manufacturers tend to dominate the local print export industry by doing everything from paper-making, to printing and finishing for foreign customers. The Indonesian economy has been in a slump for about 15 years, and many printing presses were sold abroad during this period. Lately, however, the printing market seems to have stabilized.
E) Vietnam: The printing industry has grown in Vietnam following the influx in recent years of foreign investments in this country. Insufficient labor, rising land costs, and increasing taxes and wages in neighboring China have caused many foreign exporters of tools, shoes, and sportswear to move their Chinese operations to Vietnam. Such moves have spurred growth amongst local print industries and encouraged foreign printers to also set up operations in Vietnam. These developments have resulted in an upward trend for labor costs, but overall prospects for packaging printers look especially good.