CEO Reflects as P.A. Hutchison Marks Major Milestone
In an industry where "survival of the fittest" has been a prevalent theme, and consolidation has permeated the book publishing industry and its vendors, from book manufacturing companies to equipment manufacturers to paper companies, celebrating a 100-year anniversary is no small occasion. For president and CEO Chris Hutchison of book manufacturer P.A. Hutchison—which celebrates 100 years in business this summer—the anniversary means even more. As part of the family-run business since he was "knee-high," he says ("I was pushing a broom at age six on the weekends for $1"), "it feels really good."
"Being a fourth-generation, the day you take over, you realize there's pressure not to drop the ball and, at the time, I remember thinking that one goal of mine was to make sure we made it to 100 years, and not be the guy who fell short. So, it's a great accomplishment."
The company—which started in a garage, and now encompasses more than 150,000 square feet—has experienced some of its strongest growth years in the past decade, according to Hutchison, who took the helm of the Mayfield, Pa.-based company 12 years ago.
Here, Hutchison shares his insights into how his company—which counts Kaplan Inc., Wolters Kluwer, and IBM Corp., among its lifelong customers—has metamorphosed during the course of a century, what strengths helped the company survive and even thrive during challenging times, and why he hopes for more consolidation in the book manufacturing market.
BOOK BUSINESS EXTRA: What do you consider your company's biggest strength? How does this compare to 100 years ago?
CHRIS HUTCHISON: I know everybody says it, but I think it's a price-service combination. We work hard to keep our costs down and bring our customers a very high level of service that they can't find at any other book manufacturers.
Like most family printing companies, I do know it started in a garage 100 years ago, basically in letterpress as a commercial letterpress printer. In the '40s and '50s when offset came around, my grandfather, who was a second-generation [head of the company], was a photographer and was really excited about offset and halftone, and he ushered in the offset stage. We remained a commercial printer until my father, in the '70s, as computers started taking off, took the company in the direction of books and manuals. So there have been three pretty big metamorphoses of P.A. Hutchison in 100 years.
EXTRA: Can you give our readers an idea of the company's growth since it first launched?
HUTCHISON: ... We're on our fifth facility. Its first commercial storefront-type space was about 1,000 square feet, and we're over 150,000 square feet today. We have about 135 employees. And a lot of our growth has happened in the last 10 to 12 years. We've tripled in last 10, so it's a nice cherry on top to reach 100 while you've accelerated growth through some pretty tough economic times, and in an industry with overcapacity to be able to grow that way healthily.
EXTRA: What is the biggest change you've seen in the book manufacturing business since you've taken the helm of P.A. Hutchison?
HUTCHISON: ... Uncertainty. In the current market, I sense a lot of uncertainty from the competition, from our customers-both from the economy itself, from digital alternatives and everyone trying to figure out what the final direction will be for the next 20 years.
EXTRA: What are the biggest challenges you are facing now, and how are you addressing them?
HUTCHISON: I think, with our competition, dealing with the overcapacity issue is one of them, and we're trying to strengthen our sales team; we've doubled the size of our sales team in last 12 months.
The other thing is deciding on new technology. Being part of a long history of an industry with overcapacity, we've followed inkjet from its development, but trying to decide the right leaping-off point not to reiterate more overcapacity in the marketplace.
EXTRA: What are your publishing customers' biggest challenges, and how are you helping them address these challenges?
HUTCHISON: Beyond the delivery format of them knowing how much to commit to print versus electronic, and how to manage inventory and keep costs down, one of the things we provide is that we're set up for run lengths from 10 to 100,000. So that, [along] with quick turns, helps them manage their costs and warehousing efficiently.
EXTRA: What do you see as the biggest opportunity for growth right now for P.A. Hutchison?
HUTCHISON: I just think market share, really. We've decided at least for the next, probably, 24 months that we'll continue to focus on one- and two-color books. And hopefully inkjet and electronic will play out a little bit in that timeframe before we decide on a different market strategy.
EXTRA: In what area is the company investing most heavily right now?
HUTCHISON: We actually are just coming off a three-year period where we've invested over $11 million, and we really did it across the board, from web press to perfect binding to facility and prepress. So we're taking a breather this year. And I think inkjet would be our next investment.
EXTRA: One-hundred years in business is quite an accomplishment. To what do you attribute your ability to survive through several major recessions and a changing publishing/printing environment?
HUTCHISON: I think a good operating strategy, and a great workforce that provides flexibility to ups and downs and twists and turns of cycles within publishing has helped us most.
EXTRA: There has been a lot of consolidation in the printing business in the past few years, and many are concerned about further consolidation creating a lack of choice and competition to help keep pricing down. Do you see further consolidation ahead?
HUTCHISON: I hope so. I think our segment of the industry has lacked, in that our customer base in the last 15 years has consolidated, and our vendor base has consolidated, and I actually think printers need to get over the "family business" mindset and consolidate further. I think it's the healthiest thing for our industry.