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Forum of the professional unity

14.11.2014

Russian printing holding VMG Group successfully organized in Sochi the III-rd International conference of newspaper production and the ceremony of the Open professional printing competition “Sanat”.

VMG Group holding has started to prepare the III-rd International conference for newspaper production in the beginning of 2014. Manugraph, Agfa Graphics and Huber companies have become the partners of this event.

Sunny warm, beauty of the natural landscapes impressed all 140 members of the conference who came to Sochi on the 7th of October. This day was full of negotiations and business meetings. Welcome dinner started fr om the degustation of the wines of one of the biggest wine-making factory of Krasnodarskiy area – “Fanagoriya”. This company has won seven Grand-Prixes, more than 200 medals at the prestigious Russian and international competitions.

The opening of the conference started in the morning on the 8th of October. The welcoming speech made: Mr Alexander Remizov, Chairman of VMG Group and Mrs Olga Gorokhova, the head of the printing department of Krasnodarskiy area, who underlined the significance of this event for the south region which is proud of its printing production facilities. Many large private printing houses work effectively in Krasnodarskiy area. More than 600 titles of newspapers are printed in the printing houses of Krasnodarskiy area. The leader of the printing houses of Krasnodarskiy area is “Pechatnyi dvor Kubani” – a state printing house.

During the VMG conference the following Russian and foreign experts made speeches: in prepress process - Agfa Graphics company; in the printing and additional equipment – Manugraph company and VMG Trade company; in the consumables - Hostmann-Steinberg Rus company, representing Huber Group firm. The overview of the newspaper and offset paper market was prepared by RAO “Bumprom”. The following companies have made the reports: JSC “Tatmedia”, VMG Group, Printing House “Arguments and Facts”, the biggest newspaper printing houses of Russia “Extra M” and “Prime Print Moscow”. The directors of Russian leading printing houses have made their speeches too. The reports and discussions were about the situation in the industry, the increasing influence of the publishers’ problems on printers and the deterioration of the distribution system.

Representing of JSC “Pechatnyi dvor Kubani”, the general director Mr. Dmitry Amichba has underlined that this printing house prints more than 100 titles of newspapers of Krasnodarskiy area and meet the increasing demands of the publishers for the quality of the printed products. The printing house “Pechatnyi dvor Kubani” boasts about 40% of the regional market share of the newspaper printing. Now the questions of the production automation are very important for the printing house and the funds for the purchasing of new and additional equipment are needed. Mr. Amichba told that it was necessary to restore the system of newspaper distribution. “Post of Russia” has increased the prices for the delivery and there are no solutions to stabilize the prices for a while.  

The general director of CJSC “Prime Print Moscow” Mrs Lyudmila Pimenova has presented her printing house, which is a part of Norway holding “Amedia”. The enterprise has become one of the leading printing houses in newspaper market for its 12 years of working. The best post press equipment in Russia has been purchased. Today the commercial printing houses haven’t such financial preferences from the state structures like the publishers have. Practically all federal central and regional newspapers have the additional media projects. The newsmen spread their money for the TV and radio projects, internet-versions of the publications. The salary in the editors of the leading publications is much higher than in the printing houses. Yes, there are many printing houses now but we can’t say that they live very well. We are all practically on the same level, but the different levels of the automation give the different terms of the production manufacturing. Mrs Pimenova underlined that for the last three years the price for the printing of the page in “Prime Print Moscow” printing house hasn’t been changed. It’s in spite of the increasing of different tariffs, statutory requirements about the executions of Rostekhnadzor, EMERCOM instructions. We have kept up our prime prices for a long time. But for the recent 3-4 months it has ruined due to the grand fall in ruble exchange. We are working on the equipment delivered from abroad. The consumables: plates, inks, chemical – everything is import. It’s very difficult now to increase the prices for the newspaper printing. It’s due to the competition. All clients know the prices of the market very well. And it’s very strange when the client comes to your printing shop and shows the prices of the competitors and this price is equal to the price for paper. The question is: how is the printing house going to survive giving such price? Mrs Pimenova called the participants for thinking about the future, comparing the truth – the health of our industry is in our hands.

The commercial director of “The typographical group “Deviz” (Saint-Petersburg) Mr Ilya Imamnazarov has made a speech too. It has presented in this market for 20 years and it’s a leader in the printing of color multipage newspapers. 60% of newspaper production produced in the North-West region is printed in “Deviz” printing house. There are irreversible processes in the development of information technologies, the newspaper has got shortcomings in efficiency, engagement, distribution. The printing houses are accumulating obligations - to suppliers and creditors. The dependence on the imports and the entire above mentioned has an effect on the prime cost. There is an offer to create the base of problem clients. The warn information will help the market participants not to bring the business to the losses and legal actions. Mr Imamnazarov underlined that today it’s very important for the printers to be in dialog.
  
The General Director of “Mozhaiskiy polygraphicheskiy kombinat”, Mr. Evgeniy Feldman also agreed with the colleagues. Several years ago, having a book print shop, shareholders of the enterprise decided to create a magazine printing, and today “Mozhaiskiy polygraphicheskiy kombinat” is a unique enterprise not only in Russia, but worldwide, wh ere two technologies coexist and produce wide range of products. Taking into account experience of work with customers, Mr. Feldman noted that today printers must work more closely with publishers and distributors. Today printers are more vulnerable than the rest of the periodical market. And they should be leaders in many issues concerning printing production, discussing matters of the market. The head of the enterprise highlighted that in the current situation it would become reasonable to cancel VAT exemption for import of the finished printed products produced by Russian publishers abroad.  And after tax payment the publishers will see financial benefit of printing their products in Russian print shops.
Here is one more opinion of the General Director of "Pervy Polygraphichesky" (Krasnogorsk), Mr. Kirill Gulyaev. The print shop is only 10 years old, but it has already been certified by ISO9001, and therefore, it was possible to arrange all production processes. The enterprise recycles 45 thousand tons of coated paper per year. In 2014 the loading increased, but profitability went down. Newspaper products are printed on two printing presses Uniset, and production volume in this segment decreases. But magazine production volume increases because of its returning from abroad. Mr. Gulyaev also shared a problem of the enterprise: under the contract for supply of the coated paper produced by “Kama” paper mill, the print shop didn’t receive 1,5 thousand tons of the planned volume this year. This situation created financial problems due to the forced standby storage of imported paper, as in any case circulations must be printed in time. To all our questions the paper mill gave only one answer – the prices will increase in November… Because of this project we got increase of duty for the imported sorts of coated paper. Today Russian publishers spend more than 5 billion Euros per year for printing abroad. During discussion it was proposed following: within the framework of retaliatory measure, import of finished printed products produces in the countries which imposed sanctions against Russia, should be temporary forbidden by law.
The General Director of PC “Extra M”, Mr. Richard Braam took his speech in the beginning of the conference, but we would like to refer to his opinion in the end of the article. His report made ambivalent impression on other participants, but generally, he set up the key points correctly. Cost optimization, print quality, stability – these are three pillars for the future of every print shop. We all constantly note the speed of changing market needs: range of printed products is increasing, circulations are reducing, but the volume of publications is growing, less advertisements and less subscribers. There’s a price war with competitors. Devaluation of ruble and growing debts are destroying economics of enterprises, and it affects the volume of newspaper production. It was reasonable to quote Albert Einstein: “We can not solve our problems with the same level of thinking that created them. It is necessary to go higher level”. Mr. Braam convincingly showed his vision of the reality in his presentation. The final slide with an example of races and changing wheels during 4 seconds pit stop clearly demonstrated team spirit, technical innovations and ability to use them. And as a consequence, the quality and level of professional skills lead to the expected positive results. This is what we all need – to create industrial team of the printing market in Russia.
The conference also involved discussion of questions for Parliament hearings in the State Duma of the Russian Federation on the subject: “Current destruction of newspaper, magazine and book printing system in Russia is a threat to information security of the society”.  In this connection it was agreed to publish suggestions of the participants.
RECOMMENDATIONS (draft):
1.    To develop a State program of support and promotion of reading and provide state libraries with books and print media.
2.    To develop reasonable strategy of the industry development; to create budget scientific research center under supervision of the Federal Agency of Printing and Mass Communications in the system of the Ministry of Telecom and Mass Communications of the Russian Federation for developing a new strategy in newspaper, magazine and book printing industry, systematic monitoring of its condition, new technology implementation and development of normative and technical documentation for publishing and printing industry.
3.    To provide VAT reduction and to make it fixed in the volume of 10% for all enterprises of print media, as well as for forwarding and delivery of subscription circulations of magazines and newspapers, except publications with advertising and erotic content.
4.    To provide tax exemption in part transferred to the federal budget for profits received by printing enterprises from producing newspapers related to education, science and culture, media products.
5.    To provide abolition of import duties for coated and supercalendered sorts of paper produced outside Russia, as well as for printing components for newspaper and magazine printing. (As we know, 90% of consumables used in printing are imported from abroad with payment of customs duties and VAT 18%, the same is applicable for spare parts for the major printing equipment).
6.    To provide leasing of federal ownership premises to publishers and print shops at the rates set for cultural establishments.
7.    To develop professional standards for print media production processes, their absence leads to poor quality of newspapers and magazines. Basing on the state program, it is necessary to stimulate development of appropriate standards in a very short time.
8.    To implement protective rate (10-15%) of the customs duty for imported finished printed products and to set VAT for imported products – 18% (in accordance with art.164 of the Russian Tax Code part 2, p.2 – taxation should be carried out at the rate of 10%, part 3 of the article refers to periodicals suitable for this rule, and in p.5 of the article the same rate applies for import of these products. Customs duty is not applicable for import of printed products).
9.    To make temporary forbiddance for magazine printing in the countries implemented sanctions against Russia. This measure will give an opportunity to develop magazine and book printing in Russia.
10.    To provide state premises at reduced rates for leasing to publishers and book-selling retail companies without competitive tendering regardless their legal form (by amendment in p. 3.3. of article 17.1 in the Federal Law from 26.07.2006 No.135-FZ “On Protection of Competition”, or by considering the possibility of such action within pp.9 p.1 article 17.1. The latter gives possibility to provide premises without competitive tendering in accordance with chapter 5 of the Law No.135-FZ. According to this chapter it is possible to issue legal acts for state and municipal benefits in order to develop culture and save culture values (pp.6 p.1 art.19).
11.    To oblige specialized educational institutions in printing industry (colleges, technical schools and universities) to open specialization for newspaper and magazine production specialists on budgetary bases. Federal Press and Mass Communications Agency should implement advanced training on budgetary bases for newspaper and magazine production specialists with day release and on the job in appropriate institutions.
Dear Colleagues, we are looking forward to your offers and comments, and we would like to finish this article with words, that were uttered during the conference: “In the struggle for present survival we may miss our future”.

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