Rewind to 2009 and Centrum Printing was close to collapse. The firm was almost $1.5 million in debt and losing $500,000 per year. It was overstaffed, missing deadlines, being pressured on margins and struggling to pay suppliers, says director Percy Vij.

[Photos: Behind-the-scenes at Centrum]

He now paints a very different picture of the Mascot, Sydney-based company. Centrum has become lean and dynamic thanks to a change in culture that has focused on pairing streamlined management systems with accountable staff.

The dark days of 2009 are behind them: the firm has returned to profit, retired its debt, paid off its suppliers, cut turnaround times and boosted margins, says Vij.

The native of India subscribes to the notion that ‘revenue is vanity, profit is sanity’. He says he is much happier to now be making $500,000 of profit per year on revenue of $5.5 million than he was in 2010 when turnover peaked at $6.5 million and the Sydney firm was operating at a loss. “For the past two years we’ve had very good profits. I could sell $10 million next year, but I don’t want to, because I would be losing money."

Vij’s numbers illustrate how much leaner Centrum has become. That 15% fall in turnover has been accompanied by a 50% reduction in headcount, from 56 to 28. The firm no longer needs to rent the next-door building it occupied in 2008 or the nearby warehouse it moved into in 2009. Further efficiencies have come from reducing its stockpile and offloading the two trucks and the ute that were purchased in 2009. Centrum has also saved $150,000 in annual rent since buying its factory in 2010.

Vij gives a lot of the credit for Centrum’s turnaround to general manager Sandra Mascaro. She came on board in 2008 – and found disorder. Nobody seemed to know what all those staff were doing, how they were performing or to whom they were responsible. 

“We were growing, but there was no real structure. Percy and I would be constantly working in the business rather than on the business,” she says. 

Customer service inevitably suffered. “Every second job was late and had something wrong,” says Vij. “We were going through a very difficult time and at one stage were even thinking of closing.” 

Mascaro confirms the dark mood. “We thought that we were going to be another statistic if we didn’t do something to change.”

The solution was to bring order to the chaos, she says. Roles were clearly defined, lines of responsibility established and detailed record-keeping introduced. A key component was the addition of a large multi-coloured organising board. Nobody could claim not to understand the workflow because it was all there in black and white… and blue, purple, pink and green. Management also made a point of sharing all the new statistics so everyone could see precisely what was occurring throughout the business, says Mascaro.

“There was a lot of confusion in the company. When we put our systems in place all that disappeared because everyone knew what they were doing. The accountability came into the company which probably hadn’t been there before.”

Change is hard

Letting the sun shine in wasn’t to everyone’s liking. Some staff had enjoyed lurking in the shadows, knowing they could coast by with a minimum of effort. One by one, the “flying-under-the-radar people” drifted away, either because they could see the writing on the wall or because they were eventually shown the door. The change in culture also led to the departure of several disruptive employees.

Mascaro says there has been a big jump in the quality of staff, who are now more motivated and interact harmoniously. “The culture is a lot better. It’s a much better place. We want people here who want to be here and grow with Centrum.” 

These days, jobs are rarely late and customers are notified well in advance when that looks like occurring. That has allowed Mascaro and Vij to step away from the day-to-day running of the business and focus on the bigger picture.

Vij notes that he and Mascaro make a point of caring for their staff, partly out of concern and partly because it makes financial sense. A good example is the training program that was introduced in 2010, and which has seen most employees receive competitive manufacturing, frontline management and business administration training. A trained worker is not only more productive, but also feels more valued, he says.

Staff feel the love in other ways. Birthdays are celebrated. Monthly awards are distributed. There is even the occasional indulgence. In 2010, Vij rented a bus and took about 50 staff and family members to Mt Selwyn for a skiing weekend.

Centrum’s turnaround wasn’t only due to its internal reorganisation, says Vij. The company also benefited from the newfound conviction that it was better to do less work at higher margins than vice versa. The tough decision was made to ditch clients that would only give their patronage in exchange for unsustainable pricing.

Vij has a warning for his fellow printers: “Don’t buy jobs. Don’t do jobs just to get turnover. Only do jobs where you can make money and the industry can survive and make money.”

Rejecting work

He says he practices what he preaches and is not just willing but happy to reject low-margin contracts. His theory is that his competitors will only do themselves harm if they work at a loss – and won’t have the capacity to bid for the higher-margin jobs that then come along.

The focus on higher margins has seen Centrum move away from print brokers. They haven’t been completely shunned, says Vij, but now “we only work for the print brokers who pay”. 

In 2009, 25% of Centrum’s work came from brokers; that has since dropped to 10%. The firm feels more comfortable dealing directly with clients, because these days it feels it has a better offering.

Vij may spend a lot of time thinking about sales and profits, but he doesn’t want the numbers to define him or his firm. He says Centrum prides itself on its inclusiveness: women represent half the workforce, occupy every department and also occupy senior leadership roles. That’s notable in a male-dominated industry.

He also helps worthy causes by doing the occasional gratis print job. Examples include an anti-drugs campaign, a children’s hospital and Australia Day celebrations, he says. “Why make money if there is no purpose in life? If you want to help the community, you actually need to do something. I don’t believe in giving cash handouts – I believe in giving in kind. I want to do more of these things. I like to do my bit for the community.”

However, charity begins at home. Centrum can only help others if it is a profitable business. One of the keys to sustainability is risk management. One milestone came in December 2011 when the firm started insuring its major accounts, says Mascaro. A close watch is also placed on ‘client dependency’; the largest occupies no more than 5-6% of turnover.

Spread of customers

Centrum derives most of its income from magazines, brochures, annual reports, cartons, posters, flyers, presentation folders and point-of-sale work for the movie and music industry. The firm achieved ISO 9001 certification in 2009, followed by ISO 14001 in 2010 and FSC and PEFC in 2011.

Mascaro says Centrum owns all its machinery, which includes a six-colour Heidelberg Speedmaster SM 102, five-colour Heidelberg Speedmaster CD 102, Heidelberg cylinder, MBO B30 folder, Sheridan stitcher, Polar 115 guillotine, Robocut 115 guillotine, Epson Stylus Pro 11880 and Fujifilm Luxel imagesetter.

All this talk of machinery is apt, because that was what initially brought Vij to Australia and ultimately to Centrum. His first taste of printing came while he was a teenager in New Delhi. A friend of his brother owned a print shop, and Vij became enthralled when he toured the factory and saw the alluring posters of glamour model Samantha Fox it was producing. He started doing a bit of printing on the side, while studying accounting at university. 

Vij found a way to combine his book knowledge with his hands-on training when he opened Printofast in 1988. At its peak, the business had eight staff, and printed weekly newsletters for the Australian High Commission. It also produced stationery, letterheads and business cards for The Times of India, which is reputed to be the world’s highest-selling English-language daily.

Fate intervened in 1994 when Vij came to Sydney to research buying a secondhand offset machine. A better investment came his way: he met his wife, Linda. They married in 1995 and had a son in 1996. He decided to leave Printofast in his father’s hands and make Australia his new home.

“I had a very good business there. I left everything there. A lot of people owed me money. I didn’t even go back to collect, because I had a family life here.”

Vij ended up buying the offset machine and installing it in a new business he started in Alexandria in 1995. However, DPS Printing folded after two years. He says his problem was a lack of knowledge – not of printing, but the Australian market. He struggled to attract clients and to partner with the right suppliers.

Start at Centrum

Vij moved on to Centrum, a firm that had been founded in 1971 as Centrum International. He was hired as a salesman, but ended up buying out the retiring owner in 1999 after being quoted an attractive price. Vij then made what he calls the logical decision to change the name to Centrum Printing – after all, it did printing, but wasn’t international.

He now had four years of Australian experience under his belt, giving him a chance to succeed where DPS had failed. “Business is the same all over the world. If I went now and started a business in the US, it would take three years to know everything. When I came here I didn’t do my research, I just started straight away.”

Centrum was then based in Alexandria, employed eight staff and turned over $1.5 million, says Vij. It grew rapidly until the peak year of 2010, when the firm had a headcount of 56 and revenue of $6.5 million. The growth forced Centrum to move to its Mascot site in 2006 so it could accommodate a five-colour Heidelberg.

Vij recognises now that the growth was out of control. Headcount and turnover may have been rising, but efficiency and profits were falling. The focus has since changed. Centrum’s motto is “onwards and upwards” – but these days it refers to the bottom line not revenue. 

The slogan may sound trite, but it reflects Vij’s belief that standing still actually means going backwards. “The next 12 months will be very important to Centrum,” he says. The strategy involves moving into niche work in order to create a point of difference and boost margins.

What sectors will be targeted? Vij doesn’t want to let his competitors in on the secret. But one thing he is happy to share is that the plans of tomorrow have been built on the mistakes of yesterday. 

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