Maybe not a cover-model?

While I was overseas last month, an article appeared in Print21 Magazine featuring Pure Colours. It focussed on a part of our distant history – our recovery from a fire that devastated our business in 1998. I guess the editors felt the need to have a “feel-good” article.

The embarrassing aspect of this feature article was the fact that I ended up on the front cover of the magazine. The photo-shoot was done while I was still on leave, recovering after my accident. You cannot imagine the amount of make-up and Photoshop work that was needed to make me look human!

[divider_line]

[four_fifth]

The rocky road to renewal

Thursday, 07 June 2012

Despite fire and financial hurdles, Sydney-based printshop, Pure Colours, has risen above the challenges to embrace a brighter future with Konica Minolta.

[/four_fifth]
[one_fifth_last][image width=”111″ height=”157″]http://www.coloursdigital.com.au/wp-content/uploads/2012/06/Print21_cover.jpg[/image][/one_fifth_last]

Since the GFC, the Australian printing industry has been subject to some doom-and-gloom projections by commentators in the marketplace. With multiple closures, bankruptcies, voluntary administrations and consolidations, it seems as if it is becoming more and more difficult to make a mint, or even a margin, in the increasingly competitive market.

However, despite the uncertain economic climate, there are those who have run the gauntlet, been to the edge of collapse and returned to wind up in a stronger position than before. The road may be bumpy but the rewards are worth it. With agility, flexibility and little bit of foresight, one Sydney print business has shown that it is possible to work with the current industry trends and come out on top.

Just like the mythological phoenix that rises anew from its own ashes to live again, Sydney-based prepress and print business, Pure Colours, has, quite literally, risen from its own ashes to embark on a new life that has expanded upon what it once was.

Founder and owner of Pure Colours, John MacLulich, has walked a long and winding path to lead his business to the place it is today which, incidentally, is a large factory floor in Sydney’s inner-west suburb of Marrickville. Pure Colours has taken many forms, sizes and premises in Sydney, including directly above Darlinghurst’s former Hard Rock Café, when the restaurant went up in flames less than two years after Pure Colours had moved in.

“The first we knew about any trouble was black smoke seeping through the carpet,” says MacLulich. “The ventilation ducts went between the floorboards and they started to leak. Literally, smoke was coming out of our floor.

“When we got back in the next morning, our floor had collapsed into the kitchens of the Hard Rock Café. This black, acrid, sticky smoke had smeared everything in sight. It meant that every piece of equipment was useless.”

The fire, which began when a chicken broiler combusted in the kitchen below, essentially put an end to any further printing activity for a while. However, unperturbed, MacLulich (pictured) had the company up and running again within six months, albeit in a very different capacity.

While the business’s insurance company assessed the damage to see what could be repaired and what needed replacing, MacLulich put most of his fire-damaged equipment into storage and, in a much reduced capacity, moved into a small premises in Surry Hills to continue with the work that could be done with the surviving equipment. Around five months later, as equipment started to be replaced, the Pure Colours team moved into larger premises in Chippendale.

Seeing that the opportunity to catch the digital wave was ripe, MacLulich chose to put the insurance funds from one of his two damaged Quantel Paint box graphics stations towards a new digital Xeikon printing press.

“The industry was changing, we wanted to get into digital print. We wanted to take some of those funds and invest them in digital print,” says MacLulich.

The next hurdle

While Pure Colours was fast expanding its business again, more bad news hit when, in 2001, the business’s insurance company HIH, filed for bankruptcy. Although much of the business’s equipment had been replaced by this stage, there was still a substantial outstanding claim for lost profits during the post-fire closure of the business. This went largely unpaid.

“The Australian Government jumped in with their rescue package. Allianz was appointed as the insurer to take over from it. The government only paid out about 10 per cent of the claim,” says MacLulich.

As a family-owned business, MacLulich and members of his extended family had funded the operational continuity of Pure Colours after the fire, but when HIH bowed out of the picture, they were effectively left high-and-dry.

“At the height of our growth at the premises in Abercrombie St, we had 28 employees and probably a third of those were involved in digital printing, and the rest were in prepress and sales,” says MacLulich. “We made the decision to downsize after HIH’s announcement, and a controlled exodus of staff followed. Three of us were left. We put all of the equipment in storage and I took a month off, the first holiday I’d had for as long as I can remember.”

When MacLulich returned to work, he took out a couple of the business’s smoke-scented computers and small printers, and began working to get Pure Colours up and running again with small prepress jobs around town.

Unlike most new start-up businesses, the financial outlay for Pure Colours’ re-emergence into the marketplace was provided by contracts that had taken place before the fire shut down the business. According to MacLulich, it was actually a pleasant experience starting back up, as money was still flowing in from previous jobs, and his overheads had virtually disappeared, following the closure after the fire.

“Because it was a controlled shutdown, it actually works financially to your benefit, because it’s the reverse of a start-up,” says MacLulich. “You don’t have to be looking for funds, you’ve got cash flow coming in from past jobs, and virtually no overheads, so it was quite pleasant for the first few months.”

Growing again

Before long, the little production room MacLulich had rented from a printer friend had turned into two rooms, then three, then a whole floor. More equipment came out of storage.

As the business continued to expand, MacLulich also decided to invest in his first Konica Minolta digital press, further increasing his business’s product offering. When the extra business that flowed from the Konica Minolta press began to produce a good return, Pure Colours once again looked for a new place to call home.

The company moved into a commercial space in St Peters. However, with even more equipment coming on board, Pure Colours quickly outgrew its premises yet again. “We had the Konica Minolta machine and an offset Speedmaster four colour. But it got too squeezy in there, so we had to put it all under one roof,” says MacLulich.

This last move saw Pure Colours settle into its current Marrickville location, which has been, far and away, the largest premises to be occupied by the business.

“Having everyone under the one roof has been good,” says MacLulich. “We virtually doubled the space available again to move in here, and that gave us the opportunity to buy the top-of-the-line Konica Minolta C8000 bizhub.”

Once the bizhub was up and running, Pure Colours’ repertoire expanded again to include variable data and short-run printing jobs with a quicker turnaround. In fact, according to MacLulich, when he first started using the bizhub, he was able to come close to matching some early HP Indigo work.

“I had the opportunity to put the C8000 up against the Indigo output,” says MacLulich. “We had the opportunity to do a presentation to our potential customers, and the telling thing for me was that the client couldn’t tell the difference between the Indigo output and C8000 output.”

Now, with a whole room full of Konica Minolta presses, Pure Colours’ product range has continued to increase along with the business’s customer-base, as more and more potential clients tap into its broadening offerings.

“I think [Konica Minolta] has been instrumental in getting us where we are at the moment. I don’t think I would have been able to build it to this level based on any other product,” says MacLulich.

Afloat in a sea of uncertainty

[one_half][image]http://www.coloursdigital.com.au/wp-content/uploads/2012/06/Print21_photo.jpg[/image][/one_half]
[one_half_last]While MacLulich concedes that the industry is tight at the moment, with competing businesses continually undercutting one another in a race to the bottom, there is still hope for printers out there as long as they are prepared to be responsive to market requirements and trends, and invest wisely in the right equipment.[/one_half_last]

“I think the direction is going to be in consolidating with other digitally related services, and we’ve tried to encompass that,” says MacLulich. “We have to be responsive to wherever the Australian market is going to be. Certainly, digital print has become much, much more competitive over the last few years.”

MacLulich suggests that with such tough competition, especially among the digital print sector of the market, the industry needs an overhaul on pricing rationalisation. However, given that the industry is unlikely to band together to achieve this, MacLulich is in favour of making up shortfalls by reducing overheads and finding creative solutions to the problem of profit.

“I’m all for reducing our overheads in any way, and if we don’t have to invest in hundreds of thousands of dollars worth of manufacturing equipment when only tens of thousands dollars in software can achieve the same result… I’m for that, as would be our accountants.”

As Pure Colours’ workforce continues to recover from its setbacks, and its customer-base grows by word-of-mouth and positive reviews of existing customers, it is clear that MacLulich’s strategy has paid off, and that his company’s regeneration will continue into the future.

[divider_top]

It was pleasing to see that there were some positive responses to this article. Perhaps the most flattering was this, from Andrew McKinnon…

One Response to “The rocky road to renewal – Print21 magazine feature”
June 13, 2012 at 3:45 pm, Andrew McKinnon said:
The reason John has always succeeded where others haven’t is an unsurpassed willingness to deliver what he promises and the capacity to back that up.
When people want to define service, they should just insert ‘Pure Colours’.