Hartford Business Journal Special Editions

8 Hartford Business Journal • August 31, 2015 www.HartfordBusiness.com FOCUS MANUFACTURING Q&A Policy aimed at improving manufacturing biz climate Q&A sits down with Senate Minority Leader Len Fasano (R-North Haven) to discuss the impact of the 2015 legislative session on manufacturing. Q: What are the main impacts from the legis- lative session on Con- necticut manufacturers? A: Minor changes were made to the Subsidized Training and Employment Program (STEP) and Unemployed Armed Forces Mem- ber (UAFM) STEP programs. These programs provide grants to qual- ifying businesses and manufacturers to help offset training and compensation of new employees and previ- ously unemployed vet- erans during their first 180 days on the job. These changes revised the "new appren- tice" grant, renamed "preapprentices," by expanding eligibility to individuals age 18 or younger and employed under a written agree- ment with an apprenticeship pro- gram sponsor for a training and employment period of up to 2,000 hours or 24 months. The STEP program is eli- gible to busi- nesses and manufacturers with less than 100 employ- ees, while the UAFM STEP program is eli- gible to busi- nesses of any size. Q: The leg- islature has passed sever- al initiatives over the years to help boost manufacturing, like the Manufacturing Reinvest- ment Accounts (MRAs) that allow for companies to get tax breaks for money they save for improvement projects. Which of these initiatives have met or exceeded expectations, and which ones need to go back to the legislature for retooling? A: The MRA is similar to an IRA for manufacturers. The MRA pro- gram allows up to 100 manufactur- ers to save money (up to $100,000 annually) for up to a five-year peri- od and then reinvest that money in the business tax free. Fifteen com- panies participated in the program last year. Since the program allows the money to be saved for five years, it is difficult to measure the effective- ness in only a year, but I'd like to see those numbers increase. The legis- lature should require comprehen- sive reporting by the state on how the money saved is being used so we can assess the program's effective- ness in the future. Q: Looking ahead to the 2016 session, what needs to be done for manufacturing in Connecticut? A: We must keep in place all pre- viously-enacted legis- lation that helps make Connecticut manu- facturers competi- tive with our border states, including the phase-out of personal property tax on manu- facturing machinery and equipment. Con- necticut should also reexamine and make a focused effort to elimi- nate costly mandates on small businesses, avoid adding any new mandates, and require that any future man- dates only be added with a two- thirds vote of the Connecticut Gen- eral Assembly. In addition to relying on the Manufacturing Alliance of C o n n e c t i c u t for guidance on future policies, the state can help manufac- turers by: 1) Provid- ing a stable tax and regula- tory system so m a n u f a c t u r - ers can plan for their future and know that savings they create by being efficient can be used to invest and grow their business. This requires getting the state's fiscal house in order so manufacturers are not burdened by new tax increases every two years. It also requires agencies like the Department of Energy & Environmental Protection to make it easier to convert existing brownfields into useful properties by working with manufacturers willing to expand. 2) Promoting the benefits of a career in manufacturing to middle school and high school students. Manufacturing jobs offer good pay and benefits but require a special skill set that can be obtained in Connecticut's vocational-technical schools. 3) Making our energy prices more competitive with national prices; expanding on programs that encourage the use of natural gas will give Connecticut manufac- turers the ability to produce their products at lower prices. n Companies printing less, but Windsor print business still growing By Frank Campailla Special to the Hartford Business Journal J oseph La Valla doesn't foresee the Internet, digi- tal media or green initiatives eliminating the print industry. The future for printing is convincing busi- nesses that print still has its purpose and how it comple- ments digital. La Valla, president and CEO of Windsor print and design company Integrity Graphics, said the Internet and go-green movement have not made him fearful. In fact, his company has been on the offensive, making several acqui- sitions in recent years to expand its geographic footprint and introduce new business lines. It's most recent deal was in July when it bought Massachusetts-based Excelsior Printing. Integrity has acquired eight companies since 1998. La Valla reminds businesses that printed material has value, and people are inundated with digital communication. "I can send an email message to promote my new product, but how many email messages do people receive a day?" La Valla said. "I get about 300." He also tells prospective customers that printed mate- rial to promote new products and services can drive online sales. Convincing clients that print still has a place in a marketing plan is key. Businesses have not stopped ordering print, but they are ordering less of it, he admits. "Instead of ordering 50,000 brochures, now compa- nies print 10,000 brochures," La Valla said. That's challenging for a sales team. "Salespeople have to work 30 percent harder to maintain what they did pre-recession," La Valla said. Along with acquisitions, attracting high-performing salespeople is part of Integrity's growth strategy, but that's not easy either. "Printing is no longer a sexy indus- try," La Valla said. "It's tough to get people to come over here. Good salespeople tend to stay where they are. When you have earned a strong reputation for selling, you don't want to leave the company you are with." Integrity's revenue numbers, helped by organic growth and acquisitions, are now above pre-recession levels, indicating the company's growth strategy is working, La Valla said. A survey by the National Print Owners Association in 2014 found that among 250 firms responding, 44 per- cent reported significant or moderate sales growth. The remaining reported flat sales (28.3 percent), modest declines (20.7 percent) or sales down significantly (7.7 percent). John Stewart, executive director of the association, said he remembers people predicting a paperless society 20 years ago. He points out the Internet became a catalyst for printing, not a deterrent. "The more computerized we are, the more stuff we print off the Internet," Stewart said. Most of Integrity's acquisitions were not competi- tors, including the last three, and most were smaller businesses. "Some companies, I hit a grand slam, and some I struck out in the bottom of the ninth with the bases loaded," La Valla said. Integrity employed 115 people in 1999. That dropped to 75 in 2010 and is now back to 115. Automated machinery has reduced positions over the years. Acquiring Excelsior has created about 10 new open positions in Windsor. LaValla said he won't aggressively pursue any acquisi- tions for at least the next two years, but he will listen if a good opportunity comes along. That's how he acquired Excelsior. Two other recent acquisitions — PDQ Graphics in Newport, R.I. (2012) and Colonial Printing in Warwick, R.I. (2011) — came about because the owners retired; Excelsior wanted to sell its commercial printing and seed print businesses. Commercial printing also gives Integrity a presence in Massachusetts, and seed printing adds a new line of business with national accounts and custom- ers in Canada. Printing packets for garden seeds requires special dyes, cutting and folding to make the packets. Not many companies produce seed packets, and the Internet has not found a way to replace them. Seed packets also have led to more printing business for Integrity, which is now printing point-of-purchase signs where seed packets are displayed. Aside from competing against the Internet and digital communication, another challenge for the print industry is showing its greenness. "You will see more companies looking for us to prove with internal processes that we are green, which is OK with me," La Valla said. "We do that through proper cer- tification and documentation. Once we can prove that to corporations, they will buy printing from us. "We recycle our paper. I don't know of any print company that does not recycle its paper and printing plates," La Valla said. "We properly dispose of inks and rags, which are picked up professionally and put in containers. The general public would be shocked at how green the printing industry is." n LEN FASANO Senate Minority Leader (R-North Haven) ▶ ▶ Manufacturing jobs offer good pay and benefits but require a special skill set … Joseph La Valla is president and CEO of Integrity Graphics, a print and design company based in Windsor. La Valla started the company in 1988 with his brother, Victor La Valla, and friend John Lorusso. P H O T O | C O N T R I B U T E D

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