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FLEXO Magazine : July 2011
www.flexography.org July 2011 FLEXO 65 COSTS & CONSEQUENCES The following example outlines what it will cost to set up a complete in-house system for a narrow web shop. At a mini- mum, the items required list out like this: • Computer software. • Color calibrated digital proofer. • CDI unit—25 -in. X 30-in. • Flexo-specific software. • UV exposure unit. • Plate processor agreement. • Training; Total cost $250,000 Staffing and operational costs per year look like this: • 2 employees & benefits $100,000 . • Equipment/Service contract $29,000 . • Real Estate est. $7,200. • Utilities $2,400. Total cost $138,600. - Operational cost over 60 months = $664,000. Now, if you are engaged in controlling your costs, as stated by many flexo printers as the reason to go in-house with pre- press, then a more beneficial way of cost control should first be evaluated. The price of a basic 10-in. , 8 -color flexo label press is ap- proximately $235,000 , assuming you finance the press; the cost with interest can be estimated at $285,560. For 60 months, your fixed cost of your prepress depart- ment is approximately $967,780. This does not account for the raw plate material costs, or any software upgrades that are going to be needed; nor does it include pay raises, benefit increases, etc. If you take the total outlay for prepress, and divide it by the cost of new printing presses over 5 years, you could purchase 3 more printing prepress with $100,000+ to spare. $967,780 ÷ $285,560 = 3.389 The next example shows the calculations of the cost on an annual basis of processed plates. These are provided in the cost of a 12-in. X 12-in. plate, based upon the average cost of the raw material per sq. in. from the plate manufacturers. Annual cost to produce flexo plates, based upon equip- ment, overhead and raw material cost of a thermally pro- duced plate follow. Annual usage/ sq. ft. Cost per 12-in. x 12-in. plate $ Per sq. in. 1,000 $216.57 $1.50 2,000 $119.52 $ .83 3,000 $86.40 $ .60 5,000 $61.92 $ .43 10,000 $41.76 $ .29 20,000 $33.12 $ .23 The numbers are the numbers and these facts should help the printer decide whether setting up a prepress department is a sound concept or not. When you consider the high capital investment, soon to be redundant equipment, high waste factor, potential conflicts between internal prepress and press operators and constant upgrades; in-house prepress may not be for you. If you are considering going in-house, I would first con- sult your present trade shop and use its experience to your advantage. Trade shop management may possibly wish to invest in your company with staff or equipment by setting up a Facilities Management Program, or offer advice on what equipment to purchase. Please remember, you will never have to pay for a bad plate from a trade shop. If you are considering an ongoing investment this large, the best advice will come from your trade shop, purely based upon the industry knowledge and experience its people possess. About the Author: Robert Smithson is CEO of Trinity Graphic USA, a Sarasota, FL flexo tradeshop supplying flexo prepress and platemaking services to the flexo industry. One of the founders and past presidents of the FPPA, he has served as a judge on both the FTA and TLMI awards committees. He has written many articles for the flexo trade press and given many presentations worldwide, on photopolymer embossing and lenticular flexo. As a respected industry consultan,t he has set up flexo prepress facilities in Asia and Europe, as well as North and South America.