26 February 2014
Print exporters winning with weakened dollar
TORONTO—Canadian print exporters are reaping the rewards of a softer domestic dollar, drumming up stateside business as the loonie's value treads water near 90 American cents.

Toronto's CJ Graphics once operated a satellite location in the U.S. but shut its doors as the dollar reached parity in 2012. This January, however, when the dollar plummeted to its lowest level since 2007, CJ and others have been quick to leverage the difference.


The 2014 "Lucky Loonie" was minted to commemorate Canada's athletes in Sochi, but the luck is also rubbing off on some Canadian printers 

"The decline on the Canadian dollar has definitely increased our U.S. sales, and I think it has for a lot of people," said CJ Graphics owner Jay Mandarino. The company does 10% of its business across the border, with 25% of overall work being directed by the States via Canadian clients owned by U.S. companies.

Bob Faulkner of Metropolitan Fine Printers (MET) in Vancouver, which does 30-35% of its business in the U.S. to the tune of $6-7 million, first made inroads in the States in the early to mid 2000s when the dollar sat at 62-65 U.S. cents.

"[Our clients] were seeing a 35% benefit in printing in Canada, so we were quite successful," Faulkner said. "And that continued right through and we built relationships with some major corporations as far south as San Francisco," outfits like TED (for which MET is the official worldwide printer) and several major retailers and goods suppliers.

The volume of that work declined as American companies suffered the recession, but Faulkner says the strong relationships MET built kept the cross-border work from falling as far as it could have. It also meant MET was primed for more business once the dollar fell again this year.

"Some of the American printers won't chase down $30,000-$50,000 jobs. They may not see it as being worth their while. But for us in Canada, certainly out here in the West Coast, that's a fairly major piece of business," he said.

One downside to the dollar's drop, however, is higher price tags on supplies shipped in from the U.S. "The paper companies are sending us notes every day telling us there's going to be price increases on our U.S. stocks," said Faulkner. "But we're all faced with it. So when I see a 10% increase in paper, so does my competition," he said.

Some banks forecast the dollar could slide as low as 85 cents by the end of the year. Mandarino agrees and predicts that won't be the bottom. "I think it might drop even more in the next couple of years," he said.
Comments:
1. John Zarwan says:
2 March 2014 at 9:20 AM
There's a second-order benefit as well. As companies fill capacity with export orders, there's less pressure on local printers who do not export. During the loonie's appreciation, print exporters who had lost export sales turned to Canadian markets to try to replace that business.
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