Editor’s Note: On July 14, APDSP Managing Director Ed Avis spoke with Achim Carius, leader of the German reprographics network Go4Copy, about conditions in his country given the war in Ukraine. Below is an edited transcription of that interview.
Avis: So how are things going overall for reprographics in Germany?
Carius: Things are going clearly better in the past few weeks. The sales volume is stronger, and after two years of Corona, we have no more restrictions -- people can go outside without masks, with the exception of airplanes and trains. Overall, business for reprographics firms is going well. We have events and conferences again, and for those a lot banners and posters need to be printed. Plotting also is going well, because there is a lot of building going on.
However, the mood is not good. Putin has reduced the flow of natural gas to Germany, and at the moment none is coming. The prognosis is the flow will stop permantely. That makes things difficult for us, but it’s necessary, because Putin is financing the war in Ukraine with his gas sales, and no one wants that. So now there are campaigns telling people to prepare for a big crisis this coming winter. People are buying heating stoves – coal and wood – and they’re stocking up on groceries. Our minister for interior affairs is stressing these things on the TV, and while there’s no panic, it has lowered everyone’s mood. But we are prepared.
We are dependent on Russian natural gas, and the our gas storage tanks are not full. And we need a lot of gas for industry. So we need to save gas to be ready for the winter, but this situation is really putting the brakes on investment. At the moment, business is good, but everyone is anxious, because we see the news from the Ukraine and that depresses us. And it’s just a few hundred kilometers from Germany; just Poland is between us.
As a result of the war, Germany has increased its defense spending to 2 percent of its GDP. Is that a problem for German business?
No. It’s not a problem. The people are behind that. That has really changed. The Social Democratic Party and the greens and liberals have a coalition. In the past they said, “peace without weapons.” Now they say, “peace with weapons.” That’s a big turnaround. There’s a big acceptance of this in the public. The majority want to help the Ukrainians.
Even the big paper supplier, IGEPA, writes about Ukraine in their company newsletter. Politics has come into private business. Previously, people didn’t mix business with politics and religion, but now that has changed.
A lot of businesses, including reprographics firms, now add an energy cost surcharge to their invoices.
What do customers say about that?
They accept that, they understand it.
You said construction is going well…
Yes, it is for now, but the prognosis is negative.
Why?
Putin. Because the oil and gas flow has been reduced, and we need those for construction.
And there is another issue: We have problems getting printing paper, because at the beginning of Corona, the demand for printing paper dropped, and the European paper factories responded by switching their machines to packing paper, because Amazon was booming. And packing paper has a greater margin. So now the demand for printing paper is high again, but the machines are set for making packing paper. So there’s not enough printing paper. And the margin for printing paper is lower, so it’s more attractive for the companies to make packing paper.
How much more does paper cost now?
50 percent more.
And it’s hard to find paper?
Yes. Adding to the problem is that with contracts with the railroad and other large clients, we have a fixed price regardless that our paper costs are going up.
How long are the contracts?
One or two years.
So while the contract is active, the repro firm just has to eat those higher paper prices, right? But when the contract is up, they can renegotiate the price.
Yes, correct, but also in the meantime, they can try to negotiate with the customers, but that’s difficult, very difficult.
Do you think the higher paper prices will accelerate the shift to digital plans?
Yes, digitalization was already happening. At the beginning of Corona, university professors started accepting major student papers digitally, while before they only accepted them on paper, bound. That was a good business for our members. But since Corona, that business is over.
In America many communities are allowing bid packets to be digital. Is that the same in Germany?
Yes, it is the same here. Bid packets, as well as other plans that need to be submitted to the local authorities for various approvals, are going digital. Fewer and fewer are being submitted on paper.
How are things going at Go4Copy? Do you have as many members as before?
We have at the moment 27 members. We had 30, but because of mergers, we lost a couple. For example, in Frankfurt, Irmschler Repro and Repro Ruppert merged, so we lost one member. But the total number of locations is 60, and we are the largest digital printing service in Europe.
And how are things going at motio? [Editor’s note: motio is the primary reprographics association in Germany, and Carius was its executive secretary until last year]
Raoul Zardeninks is the new executive secreatry. I have a consulting contract with motio, and we are in touch every day.
How is motio’s membership?
Motio has 140 members. In 2020 there were maybe 150. All Go4Copy members must be association members.
We wish you luck!
Thank you!