Australia and New Zealand’s largest sheet-fed printer is
recasting the landscape of the visual communications industry,
one bold move at a time. Manufacturing Digital learns more.
Written by Anne-Frances Hutchinson & Produced by Carolyn Wiggins
Ask a marketing communications director in any industry about managing their graphics and print production, and they’ll be happy to show you their battle scars. Many stalwart project managers string together each separate link in the creative chain, from design to printing and fulfillment, and at the same time exist on a steady diet of chewable antacids. Others turn to print brokers, who coordinate multiple suppliers under the flimsy guise of being “one stop shops”, but who sell on cost and convenience rather than quality, and effectively undercut their competition on price.
Enter the GEON Group. With 25 locations from Perth to Timaru, GEON offers the entire spectrum of visual project expertise: from design to sheet fed and offset printing and print management, account and asset management, direct mail and mail services to direct marketing, variable data and digital media, GEON can handle any campaign from concept to completion.
The Sydney-based print and communication provider is single-handedly reshaping the Australia and New Zealand print industry with a game-changing blend of managerial strategy and creative talent. Backed by Gresham Private Equity, GEON has steered an aggressive, forward-thinking M&A strategy to transform traditional ink on paper printing companies into a $300 million enterprise with a diverse yet stable platform for continued growth – and they’ve done it in just three years.
SETTING THE COURSE
Despite being Australia’s fifth largest manufacturing sector, the $8 billion printing industry is dominated by small companies – 85 percent of which employ fewer than 20 people; less than four percent of printing firms in Australia employ more than 100 workers. In recent years, the industry’s fragmented nature has whetted the appetites of private equity groups. Here’s where the GEON story takes a refreshingly different turn.
Pacific Printing Group (PPG), which would rebrand in 2007 as GEON, was established in 2001 with the objective of becoming the major sheet-fed offset printing company in ANZ. In 2005, PPG sold a 50 percent stake in the firm to Gresham Private Equity, and a year later acquired the publicly traded commercial printing group Promentum Limited, making GEON the largest sheet-fed printing company in the region and doubling its size overnight.
“Gresham had the vision to know that it wasn’t about just buying a load of printing businesses, getting volume and selling them; they actually saw beyond that,” says GEON CEO Graham Morgan. “They saw that whilst getting critical mass and geographical locations was important – the real magic was in knitting them together in a structured, co-ordinated approach and into something beyond the traditional industry paradigm.”
KNITTING PAINS
In a mere 24 months, GEON Group acquired 16 companies, the majority owner-operated. One exception was Promentum which, upon purchase, was delisted from the ASX.
“The biggest challenge was combining very differing cultures from businesses with very different histories. Dealing with entrepreneurs who have made a successful life out of developing their own business and transitioning to a group approach is one set of challenges. On the other extreme, we had to take on a publicly listed company with a corporate background. What we needed to do was to have the benefits of a large organization while keeping nimble and always client focused.
We had an incredible wealth of talent in traditional industry experts. What we didn’t have were people who had the experience of complex, massive merger integrations.”
GEON selected management consultants A.T. Kearney (with global headquarters in Chicago) to help work through what Morgan calls a period of necessary pain. “They helped us to evaluate the risks and benefits of the opportunities. They helped us work through all of the cultural and people issues as much as the systems and process issues, to come up with workable plans that the business owners could drive through,” he explains.
Morgan’s bold approach to reworking the company structure was to, as he puts it, “put the power back to the businesses.” Three general managers, two strategically located in Australia and one in New Zealand, supported by a network of managers, have full autonomy for running their businesses. “We keep our structure as flat as possible and encourage local management; after all, they know their business and clients better than anyone else.”
Morgan bravely swung the axe at the upper level, trimming nine top executives down to six; of the nine, only two remain, including himself. “If I was going to drive the culture and passion in our business I had to start at the top and lead by example,” he affirms.
Another key strategy is around people, with deliberate over-recruiting for positions – hiring people that are at least one level above their role. “I wanted to make sure I got upward pressure from my people who are looking for the next challenge. In turn, they are challenging the senior team and driving the business in a high-growth area.”
Next step: tightening the supply chain. “We had all of these businesses that bought from the same supply base, but independently, so there was no aggregation of volumes,” Morgan recalls. Instead of choosing suppliers purely based on cost, the organization now develops long-term relationships with supply chain partners that offer real value for money.
By tightening the supply chain, recalibrating processes and reducing waste, Morgan cut the firm’s cost base by 10 percent in less than 10 months.
GOING FOR GROWTH
Morgan and his team studied industry trends in the UK and US, and spent significant time talking with their customers to develop their full-service, value-added business model. “Our customers told us quite clearly that they want a ‘one stop shop’ – they want more than just a manufacturer putting ink on paper,” says Morgan. GEON now offers a full range of products and services, from sheet-fed print production to creative design, direct marketing to e-books, and database management to warehousing.
“We’ve invested a lot in customer-facing technology. We’re also unique in that we’re not afraid to recommend electronic substitutes – it’s all part of extending our products and services up the value chain; those that are not just available today, but also in the future.” Morgan concludes. That future includes aggressive growth plans and further geographic expansion.
With a trans-Tasman group of the best and brightest in the printing arts and visual communications sector, GEON is strategically positioned to learn more, and do more, for its customers. And with a one stop shop model, thankfully, those long suffering marketing directors can now safely stow their supply of chewable antacids.
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FACTS AT A GLANCE:
Company: GEON Group
Operations: Sheet-fed print production, database management, creative design, digital print, direct marketing, e-books, fulfillment, labels, packaging, mail and warehousing & logistics.
Established: 2004
Employees: +1250
Revenue: A$300 million
www.geongroup.com
View Digital Corporate Profile of GeonGroup in Manufacturing Digital December 2009