Hot off the Press : Competition in commercial printing has gotten fiercer in the Southland, where demand for catalogues and computer manuals is accelerating.

Kellow-Brown Co. had been around Southern California for more than 90 years.

But the Carson printing firm, acquired two years ago by printing giant Sorg Inc., closed permanently last month and laid off all of its 140 employees. Sorg blamed the closure on the decline in demand for financial printing since the 1987 stock market crash and on increased competition.

To observers of commercial printing in the Southland, the departure of such a venerable name seemed ironic, coming just as the local industry is booming and gaining national recognition.

Southern California commercial printers have been in the forefront of those cashing in on sharply higher demand for catalogues, computer and software manuals, “junk mail” flyers, magazine advertising inserts and corporate annual reports.

In fact, California is the nation’s fastest-growing state for commercial printing, with employment up 13% to more than 75,000 workers in the past six years. And more than two-thirds of the business is in the Southland--mostly in Los Angeles County.

But the loss of Kellow-Brown also illustrates the cutthroat competition that has swept over the local industry in the past decade, as new competitors and expensive new technology have revolutionized a field that had been dominated by smaller, mom-and-pop printers.

Southern California has become known as an area with fiercely competitive printers who aggressively undercut their competitors on price and so-called turnaround--the time that it takes to produce. That reputation has been a major factor in the growth of regional printers, observers say.

And, in that environment of rapid growth and strong competition, the industry is beginning a natural consolidation, some industry authorities believe. Smaller competitors and those with higher costs--which has often meant those with unionized employees--are falling behind.

“Competition has been driving prices down,” said John Thomas, president of Griffin Printing & Lithograph Co., a 65-year-old commercial printing firm in Glendale. “Technology allows you to stay efficient and competitive, but it’s also expensive. Our industry has always been a mom-and-pop entrepreneurial business . . . (but) I think it’s becoming more difficult to start up.”

Others say that, just as in other growing industries, marketing is becoming the key to continued success.

It is still possible to start up a printing business relatively cheaply in Southern California by renting a building and leasing the equipment, said Geoffrey Pick, president of Clear Print in Chatsworth. But remaining successful in the current environment is difficult.

After a career as a sales manager for a stereo chain, Pick began his printing company more than eight years ago after deciding that commercial printing was likely to become a growth industry in the area.

“This industry is learning that it has to market itself to survive,” Pick said. “We send out samples of our recent work (to prospective customers), and we send out literature to introduce ourselves.”

To a significant extent, the growth of the local industry in the past decade is mirrored in the expansion of two longtime printing firms that have enjoyed spectacular success in recent years: Anderson Lithograph Co. of Commerce and George Rice & Sons of Los Angeles.

Between them, they have become the predominant producers of corporate annual reports in the United States--a market niche traditionally dominated by Eastern printers. And the fierce competition between Anderson and Rice in printing high-quality color catalogues and advertising materials has drawn more printers to that field and brought national awareness to the region’s industry.

Anderson Lithograph’s revenue in 1988 soared 32% from the year before to about $90 million; Rice’s rose 12% to about $96.5 million.

“The real factor in this growth is our reputation for quality,” said Gene Parana, president of Anderson Lithograph. Both companies have invested heavily in new computer scanning equipment and other cutting-edge printing technology in recent years, and that has helped give them a leg up.

Also, because Southern California’s industry has historically been less dependent on traditional financial printing--from prospectuses to stock certificates, it has been less hurt by the downturn in such printing since the October, 1987, stock market crash.

The crash severely affected some Eastern printers, industry officials say, and has curtailed their ability to invest in the new technology that they need to be competitive. Since expensive projects such as catalogues and annual reports demand high-quality printing, much of the competition in recent years has involved acquisition of the latest computer printing equipment. The region’s major printers say they may invest $5 million or more a year in new equipment--an enormous proportion of their revenues compared to other industries.

In addition, the region’s printers have gone after new growth areas instead of the traditional printing fields, such as books. A major field of growth has been manuals for computer software, a number of industry officials report. Another hot spot: business-to-business catalogues that companies use to sell their products.

In many ways, the sharp growth of commercial printing in Southern California represents a perfect match of an industry with a region’s traditional economic strength. The businesses that have usually done best here have been entrepreneurial, technology-driven and non-union. The region’s traditional openness to new business has also made it attractive for those starting up. The commercial printing industry’s profile is a perfect fit.

Of course, the region also has giant commercial printing firms. The largest is the Torrance plant operated by Chicago-based R. R. Donnelley & Sons Co. that prints magazines and other publications and has more than 1,000 employees. But it still represents less than 1% of the regional industry, according to statistics compiled by the Printing Industries Assn. of Southern California.

“Our regional industry has a greater number of establishments, with fewer employees each, than the national average,” said Robert Lindgren, the association’s director. The average Southern California printing company has annual sales of $1.3 million and 16 employees, he said.

Mirroring the industry’s growth, the association has expanded to a whopping 1,900 members, making it the largest regional printing group in the country.

Despite the apparently rosy outlook for the industry, many executives are concerned about a shakeout caused by the intensified competition.

“In Southern California, we’ll wind up in a few years with a handful of companies that have made the investment in technology and some very small job-shop printers and the ‘instant printers,’ ” one printing executive at a major firm said. “The cost of keeping up is just getting too expensive.”

In addition to the expense, the push to keep up technologically is also adding capacity to an industry that already may have too much--thus creating an odd Catch-22 for printers. Each time a company buys a new piece of equipment, the new technology usually includes more capacity. And that capacity must be utilized if a company is to remain profitable and pay for the new machinery.

“We all have too much capacity right now,” the executive said.