How Produlith Unboxes Opportunity
In a meeting with a potential major customer, the Produlith leadership team put 10 minutes on a countdown clock and issued a challenge.
The eight people around the table were handed 12 boxes — some were printed digitally and some offset. The goal was to correctly identify which were which.
Shawn Desmarchais, president of Produlith, says that even with loupes in hand, only about 8% of the people in the room could correctly distinguish the offset from the digital, demonstrating that in an industry that was once dominated by conventional printing, digital was closing the quality gap.
“We weren’t selling,” Desmarchais explains. “We were really educating them, and that’s what made the sale at the end.”
It was a fun, lighthearted way to display the capabilities of digital printing, but Desmarchais explains that throughout Produlith’s 35 years in business, it has not been afraid to try something new, and find creative ways to showcase the competitive advantages it provides.
A Total Transition
The Desmarchais family comes from a long line of printers, dating back three generations. But when Desmarchais’s father founded Produlith in 1981, packaging wasn’t even on the company’s radar.
The Boucherville, Quebec-based company began as a “one-man show,” Desmarchais says, operating as a general commercial printer for much of its existence. He says that he first started working for the company in 1993 after finishing college, eventually rising through the ranks and taking over the company in 2004 when his father retired.
Since Desmarchais has taken over the presidency of the company, his wife Annick Garcin, who Desmarchais lauds as “an expert in sales,” joined as a partner in 2014 after becoming an account manager in 2010. As both a partner in life and in business, Desmarchais says Garcin joining the Produlith team has helped it achieve double digit growth over the past three years.
Though an ownership transition can certainly be a challenging time for a company, when Desmarchais took the reins of the business, he, along with his father and sister, who also owned the business at the time, decided Produlith would exit the commercial printing space entirely and become a full-fledged package printer.
The company has now established a firm footing as a folding carton converter, serving customers in both Canada and the United States. It operates out of a 50,000-sq.-ft., revamped facility in Boucherville, running both offset and digital printing equipment. Though the company is experiencing consistent growth as a package printer and converter, it took an unusual path to get there.
After 23 years as a commercial printer, Desmarchais says he and the Produlith management team knew that despite the major challenge it would present, a transition was necessary to stay viable. Desmarchais says the company was producing a large quantity of annual reports and brochures, but the numbers in these markets were declining. Meanwhile, he says the opportunities in packaging presented a clear growth market.
“The key point to all that was we looked into the future and saw that the commercial industry was going to go through a big change,” Desmarchais says. “It already had started transitioning in the early 2000s and we liked the opportunity of going toward packaging.”
With two 40˝ Mitsubishi offset presses already on board, Desmarchais says it made the most sense for Produlith to leverage its offset printing expertise in the folding carton segment, where offset is the dominant printing method.
Though the printing technology was already in place at Produlith, Desmarchais explains that making such a substantial change to the business was not an overnight process. In addition to adding diecutting capabilities appropriate for packaging, along with folding and gluing equipment, Desmarchais explains the company needed to develop an entirely new book of business.
“As a business that has limited resources, at the time we were taking 100% of our sales that were giving us our annual profits and we were literally closing that down while we were switching into packaging,” he says. “There were some years that weren’t easy.”
Desmarchais says it took about three years to completely transition Produlith from a commercial printer to a package printer, completing the change in 2007. Though it was a difficult process, he says that strong communication throughout the company and buy-in from its employees helped minimize the stress of Produlith’s transition. He places a great deal of credit on the Produlith management team as well, which he says is active and essential in helping him run the business.
“It was a three-year transition and I was extremely lucky to have the staff that I had — and still have — that were committed to it,” Desmarchais says. “One thing we did really well as managers and as the president of the company is communicating to the team that we were in this together, and through thick and thin, we were going to make it through it.”
A Commercial Mentality
As a newcomer to the packaging space, a great deal of research was required for Produlith to build a new list of folding carton customers. Desmarchais recalls that at the time, the company discovered that there was a lack of pharmaceutical packaging specialists, and decided that it could fill that need.
Gaining new customers in a competitive package printing environment was a tall task, however. Desmarchais says the company developed a concrete business plan that it could present to potential clients and created a competitive pricing structure. But what helped put Produlith in a strong position to succeed was the speed at which it could turn jobs around — a necessary skill as a commercial printer.
“[The potential customers] hadn’t heard about us, but we were new, we were young and we were dynamic,” Desmarchais says. “But the No. 1 thing was, we were faster than anyone else. We were coming from a commercial mentality where you get the file on Monday and on Wednesday you’re delivering. We kept that same attitude with packaging. That’s what set us apart at the time — being able to turn things around quickly with fair pricing and great quality.”
After gaining a few key accounts, Produlith eventually expanded beyond the pharmaceutical market, and now serves the food, cosmetic and general commercial packaging markets. Pharmaceutical remains its specialty though, at more than 50% of the company’s business.
Bitten by the Digital Bug
As a third-generation printer, Desmarchais says he once considered himself a “true offset printer by blood.” But with digital printing appearing on the packaging scene in 2012, he says he noticed an increasing opportunity to differentiate Produlith as a package printer.
He recalls that at the time, he noticed a trend that whenever he would visit a customer, it appeared that they had an immense amount of packaging inventory on hand. When asked how often they would turn over their inventory, many of these customers would express frustration at how long it would take. This is when Desmarchais says the “digital bug” began to bite at him.
“What I saw as a dinosaur in this industry is you’d go into these warehouses and you’d see pallets and pallets of stuff that’s been there,” Desmarchais says. “I slowly realized in the industry that just-in-time and short-run packaging would be added-value to bring to the table.”
Before making a move into the digital world, Desmarchais says Produlith had to be certain it was selecting the right machinery. The search for a digital press brought the company to a converter in Ireland that had a digital press, where Produlith jobs were tested on the equipment.
With the support of Director of Operations Bruno Lemay, who Desmarchais says was imperative in the digital press acquisition process, the Produlith team also visited digital press manufacturers’ showrooms to run tests, not stopping until they were confident they were getting the print quality their customers would demand. As Desmarchais explains, if a customer wants to complete an initial product launch with a short run of packaging on digital, the quality would need to match that of offset when it was time for a full commercial launch.
“We weren’t going to stop on the first machine,” Desmarchais says. “We wanted to make sure the digital quality we were getting on the digital press was going to be able to be repeated on the offset press.”
Produlith eventually found the right match with the Xeikon 3050, which it installed early in 2015. With digital capabilities now on board, Produlith began to open its customers’ eyes to the advantages of partnering with a package printer that offered both digital and conventional capabilities.
Desmarchais explains that when customers were properly educated on the short-run advantages, reduced waste and comparable quality of digital, the customer buy-in began to grow.
“When we presented our pricing for 5,000 boxes offset and 5,000 boxes digital, there was a significant difference,” he says. “You have the visual confirmation, then you have the price confirmation. Those two allowed us to be successful in getting us out there.”
With the Xeikon press running at production speeds for two years, Desmarchais says Produlith has been able to optimize its press room to maximize the advantages of digital and offset production. He says most of the company’s short runs have migrated to the digital press, leaving the offset presses available for longer runs.
Additionally, Desmarchais explains Produlith worked together with Xeikon to improve the efficiency of the finishing process for its digital production. Unlike the commercial world, packaging requires diecutting, folding and gluing, and if these finishing steps are shared with conventionally produced cartons, bottlenecks can arise.
“You end up cycling into a queue of larger diecutting, so we decided we absolutely needed a diecutter that would have very quick makereadies and cheap die costs,” Desmarchais says. “We invested into that then we continued with a folder/gluer.”
Now, Desmarchais explains Produlith’s two 40˝ Bobst diecutters are paired with its offset presses, and the Xeikon press is operating with its own 20˝ diecutter, which is better suited for digital.
While the digital press did bring several advantages to Produlith, Desmarchais recalls there were some challenges at first. Coming from offset, managing a digital workflow is a much different process, so he explains that understanding the instant production nature of digital is imperative when adding the technology.
Additionally, Desmarchais says finding the right operator for digital is a critical step. Simply transitioning an offset press operator to digital may not be the best approach, he explains, as the conventional process requires a much different skill set.
Fortunately, Desmarchais says Xeikon assisted Produlith through the process of locating a digital press operator, and eventually helped the company find the right person for the job.
“When you’re a pressman on an offset press, you’re managing color, but this isn’t color you’re managing,” Desmarchais says. “You’re managing different variables in the machine. You’re controlling humidity and the heat. The color is going to come out and it’s going to be perfect.”
A Physical and Technical Expansion
Six years into Produlith’s evolution as a package printer, Desmarchais began to notice a disconcerting pattern. When trying to sell packaging to potential customers, he says many would often balk during the decision making process, citing a need to run the details by a design agency.
So, to combat these objections, Produlith opened its own design studio in 2010, specializing solely in packaging design — both artistic and structural.
“We’re able to walk in at the beginning stages with the marketing team of our customers and we are able to offer them the services of brand development or revamping and we bring the expertise of packaging into it,” Desmarchais says. “We’ve been able to help a lot of customers that way. Then the beauty of it is we’re able to design [according to the best way for it to be printed].”
Desmarchais explains another catalyst for bringing design services in-house was that previously, issues with art files put Produlith’s ability to capitalize on its quick turnaround capabilities in jeopardy.
“With the niche business that we’re in, it was tremendously frustrating from a delivery standpoint of when we were getting the files, we were spending more time correcting things and only having five working days to be able to produce stuff.”
As Produlith has continued to add new services and technology to its repertoire, Desmarchais says it wasn’t long before the company needed to expand its physical footprint. In 2013, Produlith moved from its 19,000-sq.-ft. facility in Longueuil, Quebec, to a 50,000-sq.-ft. operation in Boucherville.
While the larger footprint was a major upgrade, Desmarchais recalls the new facility required a complete renovation. For about a year, he says the team put in multiple shifts a day painting, changing out the lights, and doing anything it could to brighten up the building. But, he says the time, effort and expense was well worth it. Since the move was completed, the company has continued its pattern of growth.
“For a small business, that was a big chunk of change that we went to finance, but we had great finance partners that believed in what we were doing and we had great customers that followed us as well,” Desmarchais says. “We haven’t stopped double-digit growth since then.”