The decline in print is enough to drive you to drink, which is one reason why the beverage market is virtually recession-proof. When the economy goes down, drinks sales go up. It’s also one reason why Platypus Graphics has seen sustained growth in its packaging operations over the past few years.
The Brisbane-based printer has no excuse for drowning its sorrows, but perhaps toasting its success. Packaging has been growing by leaps and bounds over the past few years. The growth has driven an investment spree at Platypus over the past decade.
This year so far, the 80-staff company has had to find floor space at its Stafford plant for Australia’s second KBA Rapida 106, a Bobst Expertcut 106 diecutter and a GMC-TC2 twin-knife board sheeter from Taiwanese manufacturer Goodstrong, believed to be the first in the country. While growth in packaging has been steady over Platypus’ history, it has really crystallised in the company strategy in the past three years.
The investment is core to this – it’s about paving the way for the future. “You can’t really go out there and chase it hard if you don’t have the capability to do it. You have to back yourself,” says Platypus founder Tom Lusch.
It’s not the first time the veteran printer has backed himself. In 1983, Lusch was working at Inprint as an estimator, while moonlighting as an embellisher after-hours. He scraped together $850 for an embellishing machine, which is still on the floor among the million-dollar modern arsenal. Tom’s fledgling investment strategy took him up to his first platen, which he put to good use doing extra-curricular trade embellishing work.
Tom’s son, Aaron Lusch, now sales director of the company, remembers it well. “Dad would come home at night and work. Eventually he worked his way up to buying the platen, and put that beneath the house underneath our bedrooms,” says Aaron.
“Tom’s boss said to him: ‘What do you want to do here? You can either have a go at it and see what you make of it and if it doesn’t work out you can come back and you’ll have a job here.’ Tom thought that was a good opportunity and he took it.”
Tom Lusch decided to back himself and Platypus was born, starting life as a trade embellishing house (both Tom and Aaron point out that the current focus on packaging is not a new direction but in fact a return to the company’s beginnings).
In 1985, the company was still a one-man band, doing embellishing work on a single machine. By the end of that year, Platypus had its first offset press – a one-colour Heidelberg MO. It progressed to a two-colour machine with a host of finishing kit. By 1988, staff numbered around eight and the company had outgrown its rented premises, moving to a smaller incarnation of its current Stafford site and quickly ramping up to more than a dozen employees. Platypus passed a huge watershed in 1992 by inking the deal for its first major export account, a half-a-million dollar label account for Fiji set up through Austrade.
Over the ’90s, the company continued to grow in to commercial print arena, but packaging remained a parallel strand to the business. Aaron says: “We’ve always had the foiling and embellishing so
from time to time, some specialised packaging would come along. In the late ’90s, we acquired a packaging company – McNivens – which gave us customers.
Some of the customers that came onboard thanks to the McNivens buyout still account for work rolling out of the factory today.
“I think back then my father had the foresight to see that the printing industry was changing and there were going to be competing technologies so he saw packaging as a way to insulate the company from that,” add Aaron.
Tom Lusch estimates the company is currently running at around 85% capacity, though that’ll certainly change once the hungry KBA is on the floor. In fact, the Rapida isn’t going to be sitting alongside Platypus’ existing line-up (two Komori Lithrones: a six-colour L28 and a 10-colour LS540SP and a six-colour Roland 706). The company has opened up a new packaging plant just around the corner to house the Rapida alongside the new Bobst Expercut and a Bobst Mistral gluer. It’s the first time the company has formalised the two parallel offerings of print and packaging into distinct locations.
Print is certainly what know Platypus is best known for. It has been no stranger to success in the commercial printing sphere. Tom has made regular appearances on stage at numerous PICA and National Print Awards evenings. The company swept the boards at this year’s NPAs with gold medals in four category awards plus the Paperlinx Sponsor’s Award. But Tom hasn’t let the winning ways go to his head. In typically modest form, he says: “Some people ask: ‘Who the hell are Platypus?’ We normally keep awards pretty low-key [with customers]. It’s only when we come up head to head with someone else that we might pull them out.”
He adds that the company hasn’t had any awards in packaging, “even though that’s 65% of our business”.
“We do intend to put that expertise [with awards] into packaging in the near future. As we get the right jobs that are worthy of awards, we’ll do it.” With the firm focus on packaging and the machinery to match, there can be little doubt that award-quality work will continue rolling out of Stafford.
So why the renewed emphasis on packaging? The work has the edge over commercial print in a number of ways, not least because each negotiation doesn’t become a race-to-the-bottom price battle.
Aaron says: “In packaging, there’s a lot more loyalty. The relationships are there because you’re so involved in the early stages. There’s also normally a logistics element that goes with it.”
Packs come with the same breakneck turnarounds as general print. Before that beer label wraps itself around a stubbie or that board is diecut, constructed and stacked on a supermarket shelf, customer and supplier hold discussions over concept and design that are a world away from the “I need it by tomorrow” brief that usually comes with a stack of four-colour leaflets.
Aaron says: “With a commercial print, customers have really tight timeframes. A typical job will go through here in five days. With a packaging customer, you can have five days just on the planning stage. Customers’ expectations are different, but it’s also essential that it’s 100% right. [Packaging customers] are particular about making sure the engineering of their box works correctly. You’re a bit more engaged in the concept stage, so you have a more consultative role than in commercial print,” he adds.
Platypus doesn’t get involved in the graphic design stage. “But we often get involved very early on in the concept because our customers rely on us to create a functional box,” says Aaron.
“A customer might come along and say: ‘Here’s my new lipstick I want to send to the market’ and from there we’re involved. How will it present best on the shelf? How can we make sure the product doesn’t move around too much? Are we using a stock that’s heavy enough?
“This is the expertise that is within the company and can’t really be found so much in a design agency, unlike when you’re printing a book,” he explains.
Cosmetics are another of the recession-proof markets Platypus serves. “Cosmetics has been proven to grow during downturns. Beverages, both alcoholic and non-alcoholic have been proven to grow during the downturn. So we’ve noticed our revenues have remained consistent if not improved [during the downturn] due to our customer base,” says Aaron.
There’s enough of this kind of work in the region to warrant a strong local focus. Platypus estimates its customer base to be roughly 80% south-east QLD. It’s one of the fastest-growing regions in the country in a state whose economy has proved resilient thanks to the mining boom. Aaron Lusch adds that Platypus is looking at branching out regionally, despite the fact “there’s so much here in our own backyard”.
Where there’s work, there’s opportunity, and Platypus isn’t the only one eyeing the its local marketplace. “We have got a strong focus on the south-east QLD market, and there are two or three other players who are also pursuing that same work,” says Aaron. Competition exists up and down the east coast. “We come up against the larger packaging companies out of Sydney and Melbourne, particularly when we’re quoting on the larger work.”
Fending off competitors is one reason why success in packaging isn’t easy money. Another is capital expenditure – you have to speculate to accumulate. The high-end equipment battery at Platypus gives it the capacity for expansion, but other pieces of technology also provide it with a financial advantage.
The unique Goodstrong sheeter, for instance. “It gives us an edge in materials,” says Tom. He reckons the number of companies with a dedicated board sheeter is few and far between. Whereas in commercial print, where the obvious advantage of reels is the lower cost against buying sheets, Tom says this isn’t the key advantage with the Goodstrong – the machine means Platypus can cut to size and hence reduce waste. “You’re not paying for boards you’re putting in the bin.”
As the investment track record illustrates, Tom is a big believer in the power of technology. “Everything we do is about trying to make it easier for our people and easier for the client and this all comes down to technology. I don’t see how you can compete and start chasing efficiencies without technology,” he says.
Thanks to technology, Platypus can compete for lucrative packaging work. But while others might look on the sector as an attractive proposition, there are significant barriers to entry, not least the high price tag of the kit.
Aaron Lusch says: “I wouldn’t say [packaging] is ideal for everyone. It’s something that we’ve had to work at for a very long time. You’ve got to be prepared to make the investments to buy the equipment. You’ve got to be prepared to invest in the right people who know about packaging. You’ve got to change the company culture in many ways,” he adds.
Factfile
Headcount 80
Location Stafford, Brisbane
Established 1983
Presses KBA Rapida 106, manroland Roland 700, Komori Lithrone L28, Komori LS540SP
Market sectors packaging, general commercial print