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Phoenix Printery makes big investment, laying groundwork for new business

Published:Friday | December 9, 2016 | 12:00 AMTameka Gordon
Managing Director of Phoenix Printery Limited Nicola deMercado Barbar and Financial Controller Kharela Morrison speak about expansion plans at the printery, at East Street, Kingston on December 5, 2016.
Sharon Fowler, a member of the Phoenix Printery work crew, takes publications off a machine at the printery on December 5, 2016.

Phoenix Printery is pumping capital into new equipment and other aspects of the operation under an ambitious plan to corner 40 per cent of the local commercial printing market, a plan that requires the 54-year-old company to make an aggressive play for new clients with a refreshed sales team.

Phoenix has been working on a near-$300 million expansion project since last year, which includes investment in additional equipment and a new building.

Having lost a significant portion of its business when the Government moved manu-facturing of school texts overseas some years ago, the company was forced to diversify and has since made inroads into the commercial printing and private textbook markets.

"We still produce for local private publishers, especially the primary school books. We actually want to bring back the whole schoolbook market, but to do that, we have to be efficient, so we had to invest," said financial controller Kharela Morrison.

Phoenix initially operated from 139 to 141 East Street but has now expanded to incorporate an adjoining lot at 137, which gives the printery an additional 7,000 square feet of production space, Morrison said. The addition was a $50 million investment.

Another three lots located between Johns Lane and Duke Street, at the back of the company's office, have also been earmarked for expansion "in the next five years", said Managing Director Nicola deMercado Barbar, who is understudying her father, Stafford deMercado.

The three lots, spanning roughly 40,000 square feet, will eventually add more warehousing and production space, she said.

"We are looking at maybe the next five years because based on the investment that we have made between 2015 and now, we need to recoup some of that. Once we get that going and our capacity increases, then we will start with the additional expansion," said deMercado Barbar.

Phoenix was bursting at the seams before the addition of new work space.

"We recognised that with the current building and equipment, there was no way that we could expand with the space we had. There are more private titles out there that we could have got, so we decided that we had to put on a new building," Morrison said.

The new structure brought the total floor space to just over 40,000 square feet.

Cut electricity costs

A set of solar panels was also added at a cost of $25 million to supplement what the company pulls from the national grid, Morrison said. The company's heavy-duty printers cannot be powered by solar energy, but it is used for other areas of the operation, and any excess is sold back to the Jamaican Public Service Company, he said.

The printery's electricity bill has been cut from $2.1 million per month to around $1.5 million, the financial controller added.

Phoenix already spent $55 million on the acquisition of an SM74 printer and $38 million on a micro stitcher and is investing another US$1 million ($129 million) to procure a CP 1,000-four colour press, to be added next June, Morrison said.

With the new equipment, Phoenix has set a two-year goal of growing its market share in commercial printing to 40 per cent. It is unclear how much of the segment it now controls as even the company is working from a 'guesstimate', which it did not quote.

"We want all the school book market, but for the commercial sector, we are looking at 40 per cent of the brochures, business cards, supermarket promotional items, annual reports, all of that," said deMercado Barbar.

The company is aggressively pursuing new clients in the various segments, she added.

Phoenix produces greeting cards, calendars, and wedding invitations, and says it is the only company that makes security cards or door passes locally. It already counts JMMB, Red Stripe, Digicel, and National Bakery among its clients.

The staff of 80 works two 12-hour shifts, and there are no immediate plans to add more employees, the financial controller said.

There are no official data on the overall printery market, but Phoenix believes that it holds a significant portion, sufficient, it said, to keep rivals such as Lithographic Printers, MAPCO Printers, and Express Printing and Graphics at bay.

Morrison was mum on the business line that turns over the most revenue but says that the company is focused on increasing turnover among all of them.

The printer is mainly focused on Jamaica for business but also does jobs for regional outfits.

"We have done work in Caricom for Colgate and Caribbean Examinations Council, which means we have to ship to different islands in the Caribbean," he said, even while noting that regional expansion is not the "aggressive" focus for now.

To complement the expansion plans, 2017 will see a "redefining" of the sales team, he said, which will be tasked with seeking out new market segments. A fresh sales staff will be needed to push this objective, Morrison said.