21-02-2012
The Baltic Printing Industry - Nearshoring for Nordic Publishers
The combination of location, competitive pricing, professional service and fast delivery is driving the trend of increased trade between Baltic and Nordic enterprises within the printing and publishing industry.
The Scandinavian Printing Industry
The printing sector in Scandinavia is experiencing structural changes. There is an overcapacity in the printing industry, which is forcing small printing companies to close down while larger players are increasing their market share. Statistics show that in 2011 printing services constituted 2.6 billion EUR in Sweden, 1.6 billion in Norway, 1.4 billion EUR in Denmark and 1.8 billion EUR in Finland. The major printing import categories in Scandinavia are books, brochures and leaflets. These countries are mainly trading between each other as well as with the United Kingdom and Germany. Although small printing houses are closing down, other suppliers can enter the market, provided that they are able to offer better prices, quality products, a large variety of printing methods and flexibility. Therefore, Baltic printing companies can easily qualify as they have two huge competitive advantages – lower pricing and market proximity.
Latvia prints for Swedes and Norwegians; Estonia for Finns
Ilze Vītiņa, Sales Manager,
DHL Latvia SIA
 Analysing companies' potential in this market from the perspective of logistics, it is important to mention geographical location first. It allows significantly reduce transportation time to Scandinavian countries. Although distant European countries might have lower production costs, which leads to cheaper final product, Baltic countries have an advantage, because Scandinavian market can be reached within a few days. Taking into account shorter lead times, market proximity allows to save time and to be more flexible when making decisions and orders.
The second aspect is production volumes, which is especially important issue for local printing companies. Latvian printing companies historically mostly have produced for the local Baltic market, therefore relatively small production volumes allow our companies quickly and flexibly adapt the Scandinavian market requirements, which are quite interesting for us from the perspective of volumes.
Thirdly, an important issue is technological progress in this industry in Latvia, which has been affected by available European Funds, cooperation with banks, which minimizes production costs for qualitative industry products even if the volumes are relatively small.
Scandinavian region is attractive for local producers in actually all industries, because these countries are economically stable. This is what we can observe also from the experience of our clients.
Customers tend to diversify their businesses in order to reduce negative economic impact, and Latvian companies look for potential cooperation partners in Scandinavian countries. |
The total value of books and similar printed items imported to Norway in 2010 was 137.6 MEUR. Latvia supplied 7.7% of this amount; Poland 5%, Lithuania 4% and Estonia just under 1%. The largest importer in Scandinavia is Sweden, with the amount of imported printing material totalling 356 MEUR, of which Latvia accounts for 1.3%, closely followed by Estonia (1%) and Lithuania (0.7%).
Finland's main exporter is neighbouring Sweden, which delivers 27.2% of all imported printed goods in Finland. Estonia contributes 3.7% of Finland's total imports of printed material, followed by Denmark (1.1%), Poland (0.8%), Lithuania (0.1%) and Latvia (0.04%). Lithuania's main trading partners are Norway and Sweden, with exports totalling 6.1 MEUR and 5.4 MEUR in 2010 respectively. In contrast, exports to Denmark and Finland constitute only 1.2 MEUR and 1.5 MEUR respectively.
Trade between the regions has slightly increased since the economic downturn; from 2009 to 2010 the total amount of printing imports to Scandinavia from the Baltics increased by 9% and was 5.6% of total imports.
What can Baltic suppliers bring to the table for their Scandinavian customers?
Latvia and Lithuania export mainly books, brochures and leaflets to Sweden (3.6 and 2 MEUR in 2010, respectively) while Estonia's main exports to Sweden fall into the "other printed matter" category (1.7 MEUR in 2010) and books, brochures, leaflets (1.2 MEUR).
Latvian printing houses have built relatively successful relationships with Norwegian clients and now Latvian printing houses such as UnitedPress (specialising in periodicals) and Livonia Print (books) mostly focus on exports to Scandinavia, which constitute up to 90% of their turnover.
Print on demand
Baltic printing companies can offer high quality as many of them have invested in new equipment. In addition, Baltic printing houses have managed to maintain competitive prices complemented with an ability to deliver small runs. This drives cooperation with Scandinavia operating with a "print on demand (POD)" business model, in which new copies of a book are printed only when an order has been received, meaning that it is possible to print only one book at a time.
The idea behind POD is that of a "lean business philosophy", reducing risks and helping the environment, since there is almost no waste from unsold products. However, the manufacturer have to be aware from the additional transportation costs to every small run.
Sandra Sarlote Somase,
Export Project Manager at Dardedze Holografija
"The Scandinavian market has great potential for Baltic producers. Cooperation between Scandinavian and Baltic companies has been successful, as it is mutually beneficial.
On one hand, since the Scandinavian market is bigger than that of the Baltic states, there is a greater demand for books and other printed matter. On the other hand, it is still smaller than in Germany or the United Kingdom, and it does not pay for Scandinavians to outsource printing services to the Far East. Geographical proximity guarantees not only shorter lead times but also a certain peace of mind.
A client is only 90 minutes away from the manufacturer, which enables good  communication through regular trips to the market, as well as encouraging the client to visit the production plant and see the manufacturing process from beginning to end."
http://www.dardedze.lv/ |
Samanta Glemziene, Export Project Manager of KOPA, comments,
"When we decided to export our services to Norwegian market, GatewayBaltic identified over 30 companies as potential partners for our company. We have visited five of them in Norway, with some others expressing interest in meeting us in the future. The visits organised were very valuable and we expect further cooperation with Norwegian companies".
http://www.kopa.lt/ |
How to approach the Scandinavian market?
Prior to entering the Scandinavian market, a company needs to evaluate its capacity and the product portfolio with which they will target the market. The next step is to identify which of the sales channels to choose and approach them with a professional and targeted offer.
It is worth noting that there are various ways to enter the market; for instance, through cooperation with other printing houses, publishers of periodicals and, books, advertising companies, packaging manufacturers , printing agents or corporate clients.
Although the trade between Scandinavian countries and the Baltic states is active, there still remains opportunity for growth. If it seems difficult to enter the printing market in Scandinavia at first glance, below are a couple of references from export partner attraction projects for Lithuanian printing houses to give inspiration.
Useful links
The Swedish Graphic Companies Federation www.grafiska.se
The Federation of the Finnish Media Industry
www.vkl.fi
The Association of Norwegian Printmakers
www.norske-grafikere.no
Scandinavian trade magazines which cover all areas in publishing and printing
www.agi.se; www.pmmagazine.fi
Author: Dovile Buskeviciute, GatewayBaltic |
