Pear Tree adding creative hub, doubling capacity
Pear Tree Xpress is spending upwards of $300 million on the expansion of the office complex, new equipment and a new management information system, NIS, all intended to double capacity.
The print company is adding space upstairs its Kingston complex, the construction of which is scheduled to be finalised by November.
“We are adding about 10,000 square feet of additional space which will house new machinery, as well as a new reception area targeted to walk-in customers,” said CEO Adam Hyde in an interview with the Financial Gleaner.
“What we are doing is expanding our plant to really offer our customers more of our turnkey solutions.”
The added space will also house a studio for showcasing promotional campaigns, and an area for 3-D printing, as well as a “creative hub” that allows customers to create campaigns and proof artwork, he said.
Pear Tree was founded back in 1968 as a commercial design house by three partners, then operating as Hyde Held & Blackburn. In 2016, with 40 employees, the company became a sole trader led by principals Duncan Hyde and Adam Hyde.
The company’s core operation comprises traditional print jobs, inclusive of annual reports, brochures and packaging, and it is aiming to grow business in digital printing and labelling.
Adam Hyde says he wants the company to transition from being just a print provider to one that encompasses “the whole gamut of communications”.
That means more graphic designs, labels on a roll, self-adhesive labels and large-format printing, and more marketing jobs.
In 2014, Pear Tree Xpress brought in its first digital printing machine and is now planning to add another two – an adhesive printer and another for commercial work.
The overall investment being made in capital equipment, inclusive of digital presses, is around $145 million, to be financed 50 per cent from cash and 50 per cent from funds raised on the debt market. As capacity grows, the company will be looking beyond Jamaica to markets in the Caribbean for clientèle.
“Full-digital operations platform, including digital storefront for regional expansion and MIS software to run the entire operation, will be coming on stream in July,” Hyde said.
The building expansion itself is costing just over $160 million, 30 per cent of which is being financed from internal resources, and 70 per cent by debt from Scotiabank.
The project includes a 4,000-square-foot “green roof” that will house solar panels to power the company, and which Hyde projects could lead to 23 per cent of savings on energy costs.
Pear Tree is also in talks with its financial adviser, GK Capital, to position the company for, Hyde said, “any opportunities that may arise”, but he declined to comment on whether that included plans to list on the Jamaica Stock Exchange.
The company’s desire is to become a marketing solutions provider for agencies, design houses and corporate Jamaica in the multilevel marketing or cross-media market space.
“Direct marketing is personalised printing and highly targeted. We like to call it smart printing,” said Hyde. “We do the research, we gather the data for various demographics, whether by age, gender, or location, and we target messages for these people. So instead of printing hundreds of thousands of fliers you print a thousand, but it is targeted at a specific audience.”
But its expansion is also driven by the need to satisfy big corporate clients that it has the capacity to take on their marketing jobs.
“As a matter of fact, we were just audited by Nestlé. Internationally, there are certain criteria we have to meet in order to continue as a supplier. We had the auditors come in – auditing us on safety, technology, human resources and environmental footprint,” Hyde said.
Pear Tree is known for its fast turnaround of print jobs.
Last year, its annual turnover was about $260 million, which Hyde said reflected a 22 per cent increase in sales. In a breakout of the two main segments, he said 30 per cent of revenues come from digital operations and the majority 70 per cent is from the traditional commercial printing side of the business.
At a more discrete level, Hyde says income from digital printing on demand accounts has tripled in the past decade, from five per cent to 15 per cent of revenues.
On the traditional side of the operation, school books, stationery, annual reports and other commercial orders account about 60 per cent of sales.
At the completion of the construction project in November, Pear Tree is planning to rebrand the operation, but Hyde said the new identity won’t be disclosed until then. The company is also demolishing an old building at the Chelsea Avenue complex, which will make way for a new structure.