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Checking on the Printing Business in

Hong Kong &


Export printers f only geopolitical events and market forces had the push-button simplicity

of a CtP imagesetter or a printing press for a quick reset, do-over, or finish.
look beyond the Print manufacturers, particularly export suppliers from Hong Kong and
China, would heave a collective sigh of relief and resume their everyday
escalating trade battles with rising costs, faster time to market, and increased government
regulation. As it is, the escalating trade dispute between the U.S. and China
dispute between and the tightening paper market are monopolizing conversations, sparking
speculations, and making the print business tougher than ever.
China and the U.S.
Mulling Over Tariff Threats
and changes in Washington’s latest threat to impose penalties on as much as $450 billion worth
paper pricing to of Chinese goods, or nearly 90% of the total value of goods imported into the U.S.
from China in 2017, is raising the specter of a full-blown trade war between the
diversify, grow, world’s two biggest economies. While Washington and Beijing are sparring over
trade, Hong Kong and China print manufacturers are assessing the situation and
and prosper figuring out how to cushion potential fallout.
As Henry Woo, general manager of the OEM business department at Leo Paper,
says, “The scope and intensity of further tariffs remain unknown and unpredictable,
and we are uncertain as to the impact on our business planning. Of course, we
hope for a quick compromise in the dispute or, at least, less tense trade friction.
But the persistent concerns are eventually going to hit the stock market and global
economy whether we like it or not.”
By Teri Tan
Alice Fan, overseas sales manager at Magnum Offset, is among the many who
are vigilantly monitoring the list of items covered by the ongoing trade dispute.
“The proposed list of 6,031 products with 10% tariff, as announced on July 10,
included not just paper and paper products but also chemicals and inks,” she
says. “This is bound to affect our industry. However, since the Trump policy is
constantly changing, a significant negative impact in the short term is unlikely.
At this stage, we can only strive to maintain the stability of our operations and

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The tit-for-tat countermeasures are certainly moving way too other markets aside from the U.S. at play—a blessing in disguise
fast for anyone to take a clear measure of the potential effects. to many.
“It is difficult to know if the second round of tariffs on $200 But Francis Ho, deputy general manager of C&C Offset,
billion worth of goods will actually be implemented, but it remains optimistic that books will be the last category to be
could start as early as September, with tariffs of 10% to 25%,” affected because of their value to education and knowledge.
says Howard Musk, president and CEO of Imago. “However, as the list of products subjected to tariff grows, the
Whether printed products will be affected, and to what hit on packaging printers gets bigger,” he says. “For some, one
extent, is unclear, says John Currie, global business director of possible way of utilizing the excess capacity on their production
CTPS. “What is certain is that most print manufacturers are floor is to turn to the book market. So, I expect fiercer competi-
proactively engaged in their own countermeasures,” he adds. tion in the coming months.”
“However, adjusting one’s client portfolio to be less dependent Ken Kong, managing director of Jade Productions, shares
on U.S. business is not going to happen overnight.” Ho’s optimistic outlook. “I do believe that books and printed
But though printed books are not on the list (as of today), products are way down on the tariff list,” Kong says. “In any
Musk says that “various types of paper are, and this means less case, the print and pulp-and-paper industries have already
imported paper and/or higher prices, which then exerts pricing felt the negative trade impact. China has stopped importing
pressures and may widen the cost gap between China and the waste paper from the U.S., which is one of its major sources.
U.S. for printed books.” He notes, “Also included in the second What we have seen since then are ever-increasing prices of
round are stationery items such as journals and notepads. If this packaging paper, which affects the packaging printing
escalates further, it may encompass a larger range of products, industry, whose clients are seeking alternative packaging
and printed books may get caught in this dispute.” methods. For instance, packs of beer and canned drinks in China
Matthew Yum, executive chairman of Hung Hing, reiterates and Hong Kong are now often shrink-wrapped instead of
that a trade war is never a good thing. “Businesses will naturally packed in corrugated boxes.”
adopt a more conservative outlook, which will then lead to an For Currie of CTPS, while he and his team work with U.S.
economic slowdown,” he says. “We will see cutbacks in foreign publishers closely, the focus is on supporting their clients’
direct investments and product launches and lower buying regional print-on-demand and short-run programs for the Asia
volumes as importers remain uncertain about the potential cost Pacific and China markets. “In this regard, we operate on a dif-
impact on their offshore sourcing from China.” ferent business model,” he says. “And with our Phygital Book
Furthermore, Yum says, the print and packaging markets authentication and track-and-trace capabilities embedded in the
have always been closely tied to the GDP growth rate, which is books that we print, our role for clients is not just as a print
directly linked to consumption. “Slowdown in consumption manufacturer but also as a protector of their content and
means less purchasing of products—books, toys, appliances, and copyright.”
computers, for instance—that require some sort of ink on paper. At Leo Paper, Woo and his team have been busy diversifying
Unpredictable currency fluctuations in the yuan, the dollar, and beyond the company’s core export-oriented OEM business by
the euro are also affecting P&Ls across the economy.” further developing its packaging business. “We have also been
The Chinese yuan fell to a 13-month low against the dollar proactively expanding our shares in the China market over the
this week, with an 8% drop since April. This has actually made past few years,” he says. “From the corporate risk management
Chinese exports cheaper in foreign markets and buoys exports. perspective, this will help us minimize any potential impact
With the truly global 21st-century supply chain, there are many from the escalating trade dispute.”

Online Coverage of the Asian Printing Industry

The following articles are available online in conjunction with this print report:
● Thermochromic Ink Application in Penguin’s Frozen Book
● Black Light Printing in Find Monsters
Related Reads from PW:
● Coalition Opposes Imposition of Paper Tariffs
● Printers Consolidate, Innovate to Stay on Top
● Publishers Keep an Eye on Paper Costs
● Too Many Printers, Too Little Paper
Visit to read the full coverage and to
find out more about the companies featured in this report.

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Pinching Paper Prices dominantly lightweight 64 gsm that is mostly from European
Dramatic paper price hikes in 2017 and during the first half of mills operating in China, our alternative source tends to be
this year have hit the industry after the Chinese government Japan,” he notes. “But for the very lightweight paper, from 30
intensified controls on pollution and the use of polluting gsm to 50 gsm, China mills still provide the best value for
materials in manufacturing. Chinese citizens have been quick money.”
to spread news on social media about pollution caused by Stocking up and warehousing popular grades to minimize the
neighborhood factories, thus pressuring local governments to impact of rising prices may sound logical, but it is impractical,
act quickly or risk mass demonstrations, says Yum of Hung says Fan of Magnum Offset. “For those manufacturing in Hong
Hing. “Such moves, in line with the government’s call for social Kong, the rental costs of factory and warehouse space are simply
stability and harmony, have resulted in tighter legislation on too high to make the warehousing option viable,” he notes.
emissions and proper waste disposal and the drive to install “Furthermore, it is not just the paper cost that we need to con-
cleaner energy for factories.” sider. Transportation and postage costs have also risen in recent
The shuttering of many paper factories is one direct result, months. For our regular onshore clients, especially those in the
causing rising paper costs. “Factories neighboring residential periodical segment, we recommend slightly thinner paper to
areas are also frequently audited by various environmental maintain their budget, which includes mailing costs, while
agencies on their VOC emissions, handling of chemical mate- keeping the overall product appearance intact.”
rials, and new machine installations,” Yum notes. “In the longer The price of woodfree paper is now higher than that of coated
term, these policies on sustainable and eco-friendly practices art paper, says Kong of Jade Productions. “But woodfree paper
will benefit the Chinese economy. But the adverse short-term is bulkier than matte art at the same weight; 100 gsm woodfree
impact will be either rising operating costs at local SME facto- has about the same thickness as 128 gsm matte art,” he notes.
ries or more factory closures.” “In earlier days, publishers may have used woodfree instead of
The Chinese government’s decision to reduce imports of waste matte art to cut costs, but now that is not the main consider-
paper for recycling in paper, board, and carton manufacturing ation. What the clients want to achieve with their projects
has also caused price hikes, Musk says. “In previous years, determines the type of paper used. For instance, a publisher may
Chinese paper was significantly cheaper than paper from the want a thick book without the weight, which means that regular
rest of the world, but it has now come more into line with the coated art paper is not advisable. Instead, uncoated woodfree is
international paper market. But Europe and North America are an option if the client is flexible in terms of color reproduction.
not immune to paper price hikes. This is partly due to increased So, unless the client comes right out and says that price pressure
demand for virgin pulp in China, but more importantly, it is a is the major issue, we will recommend paper that is best suited
rebalancing of supply and demand due to some mill closures.” to the project in order to achieve the client’s goal.”
Yum says that some of his clients were able to accept the price As of this week, paper prices have risen about 50% to 60%
adjustments, “but more often than not, these adjustments were since the last quarter of 2016, says Woo of Leo Paper. “The price
not sufficient to cover the absolute increases in paper prices.” increase in waste paper—chipboard and gray backs, for
He adds, “Given the higher costs of raw materials and increased instance—is even greater, especially after China’s regulation on
operating costs in China, print manufacturers are struggling to waste paper imports came into effect last December,” he notes.
support their businesses. For Hung Hing, we have increasingly “Add this to other factors jacking up manufacturing costs in
become more selective with the products and customers that we China factories such as the fluctuating yuan and labor shortage,
deal with. Our steady partnerships, based on mutual benefit, and we see the challenges mounting up.”
have enabled us to sail through tough periods while sharing the For Leo Paper, staying competitive and sustainable means
bounty during good times—and we are continuing with this implementing proactive initiatives that range from lean manu-
philosophy.” facturing to reengineering processes to minimize waste and
For Ho of C&C Offset, one solution is to use imported paper. enhance overall supply chain efficiencies. “It is impossible to
“The cost of imported paper is slightly lower only because absorb all cost increases on our own,” Woo says. “So, as a total
there is no duty or VAT if the finished products, such as books, solutions provider, we do our utmost to add value to clients’
are meant for the export market,” he says. “But imported paper products, such as creating unique ideas using our Magic Paper
requires longer lead time and faces limitations on stock. When World and sound book solutions. When clients share their
you factor in inventory and warehousing costs, there is little annual order forecasts with us as early as possible, we can manage
advantage to using imported paper. In the past year, however, our paper inventory plan in advance to mitigate potential cost
the supply of imported paper had been more stable than that increases.”
of Chinese paper, but with the weakening yuan in recent Overall, Currie sees a more stable upcoming quarter and a
months, any gain from using imported paper is diminishing.” sunnier shorter-term outlook compared to the same period last
Seeking alternative paper is a standard practice, says Currie year. “Print manufacturers and publishers are becoming much
of CTPS. “For coated and semicoated paper, since we use pre- more prudent when it comes to lighter-paper inventories,” he

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says. “In fact, there is an obvious trend of publishers backing finishing touches, and enhanced warehousing and logistical
away from supplying paper to printers in recent months, thus support are just some of the ways these export printers differ-
putting more financial pressures on printers.” entiate themselves from the run-of-the-mill players. Read on to
In other words, it is business as usual for the print suppliers find out what is happening at their printing facilities and learn
featured in this report. The challenges—price pressures and about the new strategies they are devising for the publishing
paper-thin profit margins—have always been there, as has the industry.  ■
continuing search for more environmentally friendly practices,
higher productivity, and faster time to market. Providing more This feature is published with the support of the
value-added services, paper engineering ideas, unique postpress printers covered in these articles.

C&C Offset station, where it then is filtered, has its chemicals replenished,
A visit by a group of Canadian companies during the China and is sent back to each printing press. “This recycling process
Green Companies Summit 2018 in March is a testament to not only saves water but also cuts down on wastewater discharge
C&C’s green footprint. “These business leaders were impressed and gives us a standardized fountain solution across all printing
by our investment in greening our facilities,” says deputy presses to ensure standardized printing quality,” he notes. “The
general manager Francis Ho. “For instance, on our web plate output wastewater discharge treatment follows a similar
printing floors, multiple heat exchange systems use the heat process. At the end of 2017, we completed our VOCs [volatile
discharged by the presses to power air-conditioning units organic compounds] treatment facility, which has been approved
and water heaters.” Ho adds that these systems have enabled by local governments.”
the company to save up to one million kWh of electricity Meanwhile, C&C’s investment in its production facilities has
annually. continued even in tight economic situations. “In the second half
Then there is the company’s wastewater treatment process, of this year, for instance,” Ho says, “we will add major binding
which involves both the central dampening (or fountain solu- equipment for paperback and hardcover that is more suitable
tion) supply and the plate output discharge systems. “We filter for shorter print runs, which are now the norm in the publishing
and recycle the water used for printing so that we can reuse most industry.”
of it,” Ho says. “Previously, this wastewater discharge, which is And it is no longer just about printing at C&C, Ho notes.
mixed with chemicals used in plate output and printing, was “Providing great value to each customer goes without saying—
sent to a licensed collector for treatment. But the tightening of that has always been at the core of our company—but we are
environmental regulations by the Chinese government has also about environmental protection, social accountability, and
decreased the treatment volume allowed for licensed collectors, diversification of services.” Right now, C&C is working on con-
making that solution insufficient for our needs. So, two years necting the different services within its holding company, Sino
ago, we began installing our own wastewater treatment system.” United Publishing, which also offers a China-based online shop-
The idea, Ho says, is to collect the discharged water in a central ping platform and bonded warehousing services.

Francis Ho in front of a
plate-making wastewater
treatment system at C&C

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Going Beyond Protecting the Print Book

Redefining the company as a core book printer with a slew of The counterfeiting of textbooks has been the
enhanced solutions offerings remains the focus at CTPS. “We bane of many educational publishers. Cengage
have developed and put together these solutions—EDI, inven- Learning, for instance, estimates that counterfeit
tory control, end-to-end project tracking, lettershopping, and materials cost the company between $70 million
logistics, for instance—since our investment in digital printing and $100 million annually.
technology in 2011,” says global business director John Currie. To curb counterfeiting, multinational educa-
“However, this concept is generally challenging to sell to pub- tional publishers such as Cengage Learning and
lishers because they often regard printers are pure print pro- Elsevier have turned to unique identifiers to
ducers and not necessarily as solutions or IT companies.” authenticate textbooks. This is nothing new, of
But those publishers that have engaged in digital supply course. Some 30 years ago, stickers on book cov-
chain transformation see the potential for printers that provide ers were widely used—and as readily copied by
software solutions or cloud-based content repository capabilities pirates. Ten years later, the buzz was about
and production workflow to help them meet shifting industry embedded RFID tags in book spines and covers.
needs. “We see this with educational and STM publishers who Today, a variation on the theme has emerged:
are looking at our cloud-based platform to track files coming much more sophisticated certification seals such
from their content service providers and to monitor the whole as Prooftag’s chaosmetric tag and OpSec’s holo-
printing and distribution processes,” Currie says. “At the end graphic label, which are cheaper to implement
of the day, our cloud-based solutions platform is helping pub- than RFID tags and do not require a special
lishers to move into much leaner practices—just-in-time [JIT] reader and scanner to work.
and reduced inventory, print-to-order, and print-on-demand— The ubiquity of mobile devices has further sim-
that better suit current publishing and economic realities.” plified the authentication process. When scanned
In 2015, CTPS partnered with an IT firm specializing in with a smart-device app, certification seals,
banking and financial information security to create its patented which often incorporate QR codes, automatically
Phygital Book technology, which offers encrypted QR code lead the buyer to an authentication website
solutions for content protection against counterfeiting and par- where the legitimacy of the book can be verified
allel importing. “We are currently applying two different QR (or a counterfeit copy duly reported).
code technologies for two publishing clients that have embarked But two questions remain: Will the readers (or
on global protection of their titles,” says CEO Peter Tse. “The buyers) scan the books in the first place? Do
complex workflow—covering our digital production system they care enough—or as much as the publishers
and the full activation, authentication, and track-and-trace do—about counterfeiting when they have cheaper
process—brings e-commerce services into play.” rip-offs in hand?
Two months ago, Tse also appointed a business partner to “Educational publishers today are dealing not
allow CTPS to directly print and deliver to China. “This brings only with printed content but also with digital
in new opportunities, particularly for digital print production assets such as online assessments and cloud-
based ancillaries, as well as meeting the urgent
needs for adaptive learning,” says John Currie,
global director of CTPS. “And stolen materials, as
we know, are not restricted to print content only;
the hacking and pirating of online content is just
as rampant. In other words, an effective anti-
counterfeiting measure must protect online
assets while acting as a bridge between print
and digital content.”
This is where CTPS’s patented Phygital Book
technology makes a difference, says CEO Peter
Tse, pointing out that the name itself clearly ref-
erences both physical and digital books. With
Phygital Book, the QR code on the cover leads to
a registration portal, effectively “binding” the
book to the mobile device (and by default, the
Peter Tse (l.) and John Currie at CTPS’s new office
in Kowloon, Hong Kong continued on p. 52

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continued from p. 50
soft- and hard-bound through our digital operations, which
device owner). combine cover printing on Indigo presses with ink-jet web
“At the same time, it triggers access to the accompa- printing.” He adds, “Books with high page counts and light-
nying digital content,” Currie says. “In this case, only weight paper with PUR binding, plastic spiral/tabbing, or
registered owners of the print content are allowed access leather/PU bound and special finishes remain our niche seg-
to the digital content. This is the push for print book ment. Our experience with printing on ultra-lightweight paper
owners to authenticate their copy. Without authentica- is not easily replicated here in Asia or elsewhere. And now, with
tion, they have no access to the accompanying digital our Phygital Book technology and cloud-based solutions plat-
content, which is crucial to their studies and classwork.” form, we are in step with publishers looking for partners to help
According to Tse, CTPS, with its digital ink-jet printing them navigate a challenging and changing business environ-
capabilities, can easily place additional QR codes on ment, which is due mostly to digitization and globalization.”
interior pages, where online access will lead to tests,
case studies, videos, or curated materials—all of which Hung Hing
can be updated on the publisher’s LMS without affecting The consolidation of Hung Hing’s conventional printing busi-
the printed content or QR codes. Marshall Cavendish ness in its Heshan manufacturing facility is complete, says COO
Education (Hong Kong) has been the first to adopt such Richard Lim. “This will enable better asset utilization and
a seamless application. higher efficiencies in production planning,” he notes. “With the
Digital printing technology has also given publishers greater number of binding lines in one location, we will be able
the flexibility of on-demand printing and low print runs to capitalize on the increased capacity to produce larger volumes
and the ability to customize QR codes to fit a specific of projects with shorter turnaround times.” Presently, the
class, university, or region. “This is a matter of populat- Heshan facility has three hardcover and two limp-binding pro-
ing the printing database and linking the QR codes to duction lines that are complemented by an additional hardcover
the publisher’s LMS on our back end,” Currie says. line in its Hong Kong plant.
“With each book having its unique digital identity, which This consolidation is one result of an exercise in identifying
is ‘tied’ to its owner, access to both print and online the core expertise of the facilities that Hung Hing operates in
content is enabled, secured, monitored, and tracked, China and Hong Kong. “Our product ranges from children’s
with analytics to support customized and personalized novelty items and board books to corrugated packaging for
learning paths. Phygital Book has the ability to integrate international and domestic clients,” Lim says, “and each facility
such online/offline teaching/learning processes—and it has its unique solutions and service levels. By identifying the
is up to the publishing clients to determine how far they core expertise and investing appropriately, we will help each
want to go.” facility and business unit manager to be more focused on ser-
For used books and rental books, the encrypted QR vicing client needs and expanding accordingly.” Hung Hing’s
codes also allow publishers to capture secondhand and litho-laminate packaging business, for instance, operates on a
subsequent user information. Obviously, while there is two-week turnaround from receipt of orders and is required to
no immediate monetary reason for doing so, such a provide storage facilities for JIT deliveries.
database holds the key to further content monetization Hung Hing’s recent acquisition of Rengo Shunde in
and discoverability. Guangzhou is one step toward expanding its corrugating busi-
CTPS has also simplified the tracing and tracking of ness to meet domestic packaging demands with an eye on the
batches of books or editions for distribution. “Parallel
importation, especially of lower-priced international stu-
dent editions meant for use in specific countries, is one
big issue hitting publishers’ P&Ls,” Tse says. “With Phy-
gital Book, we can place QR codes on the packed car-
tons to ensure that the final destination is what it is
supposed to be. All these codes are stored in the data-
base and easily traced on a cloud-based dashboard to
prevent parallel importation.”

services in the booming Chinese market,” he notes. “Digital

printing is the most appropriate technology for print-to-order
and print-on-demand.”
CTPS, Tse says, “can offer print runs as low as 30 copies in Matthew Yum, executive chairman of Hung Hing

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indirect export market in the coming years. The purchase of two laser-etched away in intricate patterns to reveal the bottom
digital postpress machines—Highcon for laser die cutting and layer—something that is not achievable with thermo-reactive or
Scodix for finishing enhancement—is all about short-runs, foil stamping. Stickers for both kids and adults are a big hit right
personalization, and high-end touches. “Laser die cutting has now, so we are also looking at new techniques for creating die-
always been popular for greeting cards, and more publishers are cutting molds that will allow for more detailed kiss cutting.”
adopting it to create unique book designs,” says executive Business has been good for the last few years, Musk says, a
chairman Matthew Yum. “There is also a growing interest in trend that has continued into the first half of 2018. From his
applying the technique to rigid boxes and folding cartons, espe- perspective, the U.S. publishing industry “looks healthy.”
cially for cosmetics and FMCG products.” “Our clients are being quite aggressive on first printing quan-
Early this year, the team partnered with Fotomax, in Hong tities for high-profile authors,” Musk notes. “Publishers also
Kong, to supply personalized red envelopes for the Chinese New continue to want their books to stand out with cool-looking
Year celebration; customers added their names in hot-foil or covers, unique materials, and interactive inserts. There is also
laser-die-cut text through POS kiosks and had the finished the continuing trend for a portion of the print run to be a special
product delivered to them within seven days. “Aside from sup- edition with upgraded materials and a slipcase.”
porting our existing B2B business for short-runs, we are also The idea of the book as a well-designed beautiful object is
busy exploring new applications suitable for the B2C market,” very much alive, Musk says. “This extends beyond the tradi-
Yum says. tional publishing industry. Clients from commercial and non-
A new greenfield factory in Vietnam, scheduled to commence profit organizations are looking for promotional pieces or guide-
operations in mid-2019, kick-starts another new strategy for books and wanting them in creative formats and packaging.”
Hung Hing. “We are seeking to leverage our risks and tap into Understandably, some Imago clients are concerned about the
resources outside of China as we grow our core print and pack- ongoing trade war between China and the U.S. “While Imago’s
aging businesses,” Yum says, adding that the factory will first base is in China, we always have facilities in Southeast Asia,
serve Vietnam’s domestic packaging market and then look into Europe, and the rest of the world,” Musk says. “This makes us
opportunities for direct paper product exports. uniquely positioned to provide alternative solutions for dealing
with issues such as content that cannot be printed in China,
Imago tight schedules, or rising costs in a shifting global print market.”
Recent months have seen the Imago team busy experimenting
with XCMYK, which offers an expanded color gamut while Jade Productions
retaining standard CMYK inks. “There are limitations in that Working with self-publishing clients is not for short-term
it can only be used on coated stock and must be printed stochas- thinkers or the impatient. “There is often a considerable lapse
tically,” says president and CEO Howard Musk. “But it defi- of time between their orders,” says managing director Ken
nitely has some promise.” Kong. “Self-publishing clients also have little, if any, experience
Musk notes that one of his production facilities “has recently in getting their products manufactured, overseas or locally. The
installed an MGI JETvarnish, which can do intricate raised UV hand-holding tends to be time-consuming compared to dealing
digitally and inline foiling with tight registration.” He adds, with established publishers. But experience has shown us that
“This solution is tar- these satisfied clients and repeat customers are great at recom-
geted at the packaging mending our services, especially to their self-publishing com-
industry but can have munity. So, for us, the rewards come in the longer term, mostly
great applications for through referrals and word-of-mouth.”
book covers and dust Encouraging self-publishing clients to share as much infor-
jackets.” mation about their titles and ideas as possible is the first and
At another produc- most important step. “The more we know about their content,
tion site, a gilding pro- target consumer, price point, and thoughts, the better our rec-
cess that can deboss ommendations on paper, ink, binding, and packaging get in
patterns into the foil terms of meeting the actual requirements,” Kong says. “[Our
has been developed. team] may know of techniques, accessories, or stocks available
“One of our cover in the market that will best suit the book concept. Self-
material suppliers has publishing clients may not be privy to such market information,
also developed a PU which is often practical, if not cost saving.”
material that is made The same goes for helping clients to understand shipping
of two different col- options and related fees, Kong says. “Take shipping document
Howard Musk, president and CEO of ored layers,” Musk says. charges as an example. This cost is usually around $80, but
Imago “The top layer can be freight forwarders will charge an additional $60 or so for the

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telex release fee unless we courier to the consignee

the hard copy of the shipping documents required
for custom clearance.”
Most clients, however, prefer telex release, Kong
says. “Once other shipping-related fees are added,
the total comes to around $250. That is a vast
increase from the $20 fees of, say, 15 years ago
when freight forwarders were making reasonably
good money on shipping costs. But when clients
started to handle the shipping details themselves
and major publishers consolidated shipments
through hard negotiation, freight forwarders began
increasing their FOB Hong Kong costs to counter
shrinking margins. This is something that we have
to explain to clients, especially those new to off-
shore manufacturing.”
The past year has seen publishing clients
becoming more active than in previous periods,
Kong says. “They were reprinting, albeit in small
quantities. While we expect their business to fur-
ther improve this year, we are also busy working on
advancing our contacts within the self-publishing
community, whose referrals often open up new
Chan Hon Kwong (l.) and Ken Kong of Jade Productions doing a press check business opportunities for us.”

The Easiest Way ...

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Leo Paper
Thanks to long-term strategic corporate planning
and business development needs, Leo Paper opened
a new factory (for roughly 1,000 workers) in
Hunan Province last year. “We simply do not see
any easing up on labor pressures—including tight
supply and high wages—in Guangdong Province
in the near future,” says director Alvin Lai. “Setting
up a new factory in Hunan, which is the province
north of Guangdong, makes perfect sense. Having
factories in different locations to meet different
product needs is a strategic move that also sup-
ports our transformation goal of technology-based
smart operations.”
Last year, Lai and his team kick-started a new
initiative, Factory Next, to bring about real-time,
data-driven production operations and new appli- L. to r.: Henry Woo, Andy Lau, and Alvin Lai of Leo Paper
cations in manpower and technology. “The main Meanwhile, one innovative offering from its LeoTouch sec-
goal is to increase operational efficiencies and enhance our ondary processes is set to provide book covers with an even
agility in meeting fast-changing market and client needs,” he stronger visual impact. “Our multilayer and multidimensional
says. “The groundwork commenced when we implemented lean embossing process will make a book stand out on the shelf,” says
manufacturing and management processes back in 2007. The Henry Woo, general manager of the OEM business department.
ensuing reengineering of our business process had simplified “It will help our clients to achieve market competitiveness and
complex and inefficient workflows, standardized processes, and product differentiation—the two areas crucial to their bottom
improved efficiencies. Now, as we embark on the next phase in line.”
our manufacturing journey, we are more convinced than ever Woo’s team has seen significant growth in the children’s book
that we are on the right track toward a smarter and more sus- business in recent months. “We saw growth of more than 30%
tainable future in our business.” in board book orders in the first half of 2018 compared to the
Deskilling workers is also taking place in the factory. “This same period in the previous year,” he notes.
is the result of long-term manpower planning and concerns over Leo Paper’s in-house experts have also successfully introduced
occupational health,” Lai says. “Now that our skilled workers three new eco-friendly types of materials for silk-screen var-
are nearing retirement age, we are working to simplify their nishing, UV curing, and adhesive cleaning that further enhance
labor-intensive tasks by means of automation. This reduces the its green manufacturing capabilities.
workload on existing workers, making it a win-win proposition
in terms of occupational health and labor retention. At the same Magnum Offset
time, certain tasks are becoming data-driven and require fewer Reliability, efficiency, and security are behind Magnum Offset’s
skills under smart manufacturing.” booming business in exhibition and financial products. “In May

It used to be that fantastic (and often abstract) on time but also at high quality and within budget.
A Sampler of

ideas that gave print manufacturers indigestion and The following four projects—randomly chosen to high-
nightmares would originate from the publisher or light different print product categories—exemplify the
designer. These days, those ideas are just as likely capabilities and can-do spirit of Hong Kong and China
to come from the print manufacturers themselves in print manufacturers.
a bid to add value to their services, highlight the
capabilities within their product development and A Sticky Issue
paper engineering divisions, and help their clients to Stickers of all kinds, including puffy, holographic, and
further differentiate their offerings on the shelves. textured, are trendy right now, says Howard Musk,
Advances in color-separation, printing, binding, president and CEO of Imago. “We recently produced
and postpress processes have made many seem- the Pipsticks gift line of notebooks, journals, and plan-
ingly impossible project ideas deliverable not only ners packed with different types of stickers for Work-

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Printing in Hong Kong & China

and June and from August through October, the volume of orders received is often
overwhelming,” says overseas sales manager Alice Fan, who attributes the company’s
success at meeting the demands and rising production volumes of these clients to a
strong and experienced operations team.
“But there is an obvious talent shortage in the print manufacturing industry,” Fan
says, “which requires us to offer wages that are slightly higher than the market rate.”
She adds that rental fees for factory and warehouse space in Hong Kong have increased
significantly alongside costs of raw materials, transportation, and shipping in recent
months. “Unfortunately, because it is difficult to increase our prices, especially in the
periodical, exhibition, and financial product segments, the overall turnover has been
lower compared to previous years.”
However, with more than half of Magnum Offset’s business coming from domestic
clients, there is a buffer in the event the escalating trade conflict between the U.S. and
China hits the export printing market. “At the end of the day, our business strategy
remains simple: work hard and help our clients to the best of our ability and production
capability,” Fan says. “We believe that loyalty, reasonable prices, and the willingness to
service projects that other printers do not even want to consider are crucial to our busi-
ness longevity and prosperity. Magnum Offset has been around for 33 years, and our
stability, reliability, and efficiency wins clients and earns
their trust. These traditional business principles have
worked in the past and will work as we go forward.”
Trendwise, the use of mirror card on covers remains
popular. “The application of Cellotouch lamination to
dress up book covers is gaining favor,” Fan says. “Such
lamination offers a luxurious velvetlike texture and pro-
tective matte finish, which is both unusual and attrac-
tive, and is the perfect choice of lamination for high-end
products due to its durability and upmarket appeal.”
On the other hand, there is now a new range of paper
on the market that can provide even more depth to the
embossing effect. “The paper heightens the tactile expe-
Alice Fan, overseas sales rience, makes a greater impact, and delivers high-quality
manager at Magnum Offset
appeal in products such as coffee-table books or high-end
marketing collateral,” Fan says. “Since there have been no developments in embossing
techniques for a long time, I am really excited to see this new paper range and its
potential applications in embossing not just for covers or dust jackets but also for
interior pages of a book or catalogue.” ■

man,” he notes. “Bringing the

stickers and products together
took a lot of planning, from the
unique matchbook-style bind-
ing for the notepads to the
double elastics for the jour-
nals, which function as book-
marks and closures. Then
there were laminated tabs, foil
bags, post-its, and postcards
as well as intricate die cutting
for some of the stickers.”
Printing in Hong Kong & China

A Weighty Topic
Covering more than 460 pages and housed inside a gift box,
the large-format Al-Masjid Al-Aqsa (35 cm x 46 cm) weighs
11 kg. “While the 4,000-copy print run is not a big order, the
printing process was quite complex,” says production direc-
tor Chan Hon Kwong of Jade Productions. “In addition to
CMYK, the book designer used metallic PMS in different
chapters, with several signatures in seven-color printing,
which was CMYK plus three metallic PMS.” Then there was
the question of how to pack the heavy title. “At the end, we
tailor-made a carrying carton with interlocking construc-
tion—with no packing tape required—so that it is easy for
the buyer to carry the book home after purchase.”

Redefining Complexity
Beauty and the Beast, praised as “an engineering wonder”
by the Printing Industries of America, won three Benny
awards at the 2017 Premier Print Awards and later swept
the top prizes at both the Gold Ink and China Print Awards.
“Our product engineering team collaborated closely with our
client, Ronshin Group, right from the start and was inspired
by the traditional Chinese lantern in creating this
360-degree pop-up,” says Andy Lau, general manager for
sales at Leo Paper. “Several Chinese cultural elements—
intricate die cutting and lighting effects, for instance—were
added to this beloved Disney classic. The result was a har-
monious East/West blend of product that is targeted at the
domestic Chinese market. Extensive application of
LeoTouch secondary processes further enhanced the value
of this book and increased its appeal for children and par-
ents alike.”

When Every Minute Counts

Having a production facility with complete in-house capabili-
ties covering CtP, printing, binding, and transportation is cru-
cial for ultrashort projects. “For daily show newsletters, for
instance, the files usually arrive in the late afternoon,” says
Percy Leung of the overseas sales team of Magnum Offset.
“The printing is done throughout the night, with delivery to
the exhibition halls finished by seven the following morning.”
Leung says that such saddle-stitched dailies tend to be
between eight and 20 pages in length with print runs of
15,000 to 20,000 copies in bilingual language editions.
“Many clients had their ultrashort projects rejected by print-
ers who do not operate a night shift, who have workers unin-
terested in overtime, or who do not have complete in-house
production facilities,” he notes. “For us, such projects pro-
vide opportunities to develop a niche market—and clients
are more than happy to pay extra for overnight delivery—
while providing a much-needed service to exhibitors and
exhibition organizers.”

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