Printing to the Hispanic and Latin America Markets

Hispanic print—newspapers and magazines—is a $65 billion business. But costs of all print projects are rising, in large part to skyrocketing paper/pulp prices. Impremedia’s CEO John Paton recently told Portada, “It is a huge industry that is very resilient.” In direct mail, ad-investment seems to be keeping: marketers are expected to spend more than $60 billion on direct mail this year, up $16 billion since 2000, according to Robert J. Coen, the director of forecasting for Universal McCann, an Interpublic agency. All these publications and mailing collateral has to be printed.
Printing and printing-related costs (paper, labor and distribution) can make up to 70% of costs, and are therefore the make-or-break factor for publishers. Several Hispanic publications have circulations higher or close to a million copies (e.g. Casa y Hogar, Kena, Sobre Rueda, Futbol Mundial, etc…).  Jim Walker, senior sales rep at magazine printer Brown Printing, says that the cost-breakdown depends on the distribution of the publication, but that roughly it is 25% print, 35% paper and 40% distribution. “We are dedicated to printing for the Hispanic community manufacturing Fox Sports En Español, Sobre Ruedas, Sports Illustrated en español, Kena, and Truck Drivers en español,” says Walker.

Cost Factors
Changes in printing costs—particularly the paper cost—can mean the difference between profiting, breaking even, or losing money for many publishers. Jeffrey Duque, publisher of
Fox Sports en español notes, “the upward trend in paper/pulp cost is not present only in U.S. but around the world.” Mary Ellen Smith, marketing manager at Printing Methods, a Rochester NY-based custom commercial printer with sheet-fed, web and digital print capabilities, says that “the economy is a major factor affecting printing costs across the board ranging from the business operational costs (e.g. healthcare) to production costs (e.g. paper and other commodities such as inks). Rising gas prices have a domino effect, having a significant impact on the manufacturing industry relative to the production of raw materials and delivery of product. Given that paper is the primary print-need commodity, rising paper costs have significant impacts on printing costs.” Unfortunately, the price of pulp, the main commodity used to make paper has been rising and so have mailing costs, another cost associated with printing, with a 2.7% USPS rate-hike of coming up in May. 

Printing in Latin America?
With so many publishers targeting U.S. Hispanics who have strong roots and connections in Latin American countries, there is a strong case for printing in Latin American countries, where printing costs can be 50% lower than in the U.S.
Giorgio Cerboncini, owner and publisher of the automotive magazine Impulso, has found that printing in Colombia has been very cost-effective. “After shipping costs, we save approximately 30% of what we would pay to have our magazine printed in the U.S.” With comparable print-quality, savings that large are hard to resist. “It has extended our business plan a full year, compared to what we would be able to do if we printed here in the U.S on the same budget.”
Another U.S. Hispanic magazine printed in Latin America (Argentina) is Alma Magazine, the monthly magazine about politics and ideas.  Its headquarters for production and content development are in Buenos Aires, while marketing and advertising sales are done out of Miami
According to Alberto Gutierrez, International Sales Director at Carvajal the quality of printing at Cargraphics in Colombia is on par with virtually any U.S. or international standard, in full-color or black and white.
The Carvajal headquarters and the Cargraphics printing plant are located in the Colombian city of Cali, since 1,904 when the company was established there. It has a large segment of diligent, highly-skilled, yet economical hand-labor workers specializing in paper workcraft. Carvajal has printed publications for US customers including TV Net Productions, the Tampa based publisher of 7 Dias newspaper and La Guia. Other Carvajal clients include, CMP Medica, Watt Publishing, Automundo Producciones, SOMOS Magazine, Strika Entertainment and Microsoft.
Carvajal’s Gutierrez notes that “with today’s modern communications, fast shipping and open trade markets, using Colombia as a print/distribution source is about as easy as using Miami, where the Cargraphics international office coordinates activities and movement of materials between client and production plant.”

All good?
Overseas, including Latin American based printing can have problems associated with it (transport costs and time-delays, customs, logistics etc…). This can be a challenge, particularly for publishers of publications with a high frequency:
“Printed material is normally printed in a tight time-frame. Therefore, printing it outside the U.S. can cause unwanted delays costing more money.  Also time foreign time-frames do not always align with U.S. business timeframes,” Vince Andaloro, CEO of Direct Mail company Latin-Pak notes.
“We never considered printing the U.S. edition in Latin America, particularly because of shipping and timing efficiencies.  For our Latin American editions of Revista Fox Sports, we capitalize on local expertise by partnering with local editorial companies who print within the market where it is distributed,” says Jeffrey Duque , publisher of Fox Sports en español.

Spanish-language Communication
Another pressing question is whether publishers need to have the right equipment and software to deal with a Latin American and U.S. Hispanic publishers. As in any industry, you need to speak your client’s language to interact well with him/her.
Brown Printing has driven this concept and has a web-based pre-media tracking and page-approval system that works entirely in Spanish. Jim Walker gives the example of his Argentine client who was covering the world cup. While the magazine’s editor was in Germany attending the games, the editorial was coming into the system from Buenos Aires, and the ads were coming into the system from New York. Meanwhile, the editor was able to log into the system from Germany and facilitate the production process. Walker says that without the system in place, this sort of collaboration would simply not be feasible.
The cumulative result of employing these advanced systems, says Walker, is a greatly refined approval and proofing process, which can cut proofing costs alone by as much as 65%-75% alone, and save countless hours of back and forth between printing house, client and ad-agency.
Carvajals’ Alberto Gutierrez says that his company has skilled professionals fluent in both English and Spanish making the interaction with U.S.-based publishers easy. He adds that the publisher just needs to upload his digital files to his FTP site, and air-ship the film or CD’s to the plant in Cali, Colombia.
Jeffrey Duque, advises fellow publishers to partner with other publishers to scale the volume of business both for printing and paper and find efficiencies.  “It also helps to find a printing partner that has your best interests in mind, something we’ve been very fortunate about. We’ve also initiated an online proofing process that saves us a lot of time and money.”

For more information search for the following articles on www.portada-online.com:

- Printing in Latin America-Keeping the Quality, Cutting the Costs

- Cutting Production Costs with Online Publishing Software

- More printing for less in Argentina

- Direct Marketing periodicals for Hispanics: Do you have a general market product that could be a hit with Hispanics? 

Determinants of Printing Costs

 

Paper

Labor

Exchange rate (particularly for Latin America-based printers)

Quantity (economies of scale)

Paper Size

Paper Texture

Ink used

Bleeds or no bleeds

Mailing costs

 

Printing in Latin America: Worth It?

Pros

Cons

Costs (approx. 50% less)

Logistics, Transport Costs, particularly for high frequency periodicals

Good Print Quality

Possible Custom Delays

Good for books or periodicals with low frequency

Exchange rate risks

 

Shipping and Timing Inefficiencies


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