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Commercial printers long have bemoaned their industry's cutthroat competition. But Hammer Packaging CEO James Hammer sees his competitors' price cutting as a key to his firm's success.
The Henrietta firm, which specializes in label and packaging work, ranked No. 1 on the Rochester Business Journal's most recent list of commercial printers.
It has logged a nearly 50 percent rise in revenues over the past three years, going from $49.5 million in 2003 to $73. 9 million last year.
By the end of this year, Hammer expects the firm to reach sales of $82 million. He plans by then to boost staff from its current complement of 360 to 400. At its current growth rate, Hammer said, the company is on track to reach its five-year goal of $100 million in sales by 2007. He expects to keep hiring, adding 70 workers over the next 18 months.
The commercial printing climate for some years has been one of fierce competition and consolidation, said Edward Gleeson, economic and research analyst for the Pennsylvania-based Printing Industries of America/Graphic Arts Technical Foundation.
Its research has shown a marked annual decline in the number of U.S. printers, with ranks sometimes shrinking by as many as 1,000 firms in a single year, Gleeson said. Overall printing capacity has not shrunk, however.
Roughly the same number of presses are running, but fewer companies are running them, he said. Smaller firms are being swallowed by bigger ones or being taken over by outside investors who buy several small companies and merge them.
Printing capacity, meanwhile, remains greater than demand, Gleeson said. Commercial printing in short is a buyer's market. In such a climate, many see cutting margins as a way to get business.
"We think that's a bad policy," Gleeson said. "We encourage our members to add value and maintain profitability."
Hammer's street-level impressions...