Dutch Company Opens U.S. HQ in Richardson

03/23/2008

Dutch Company Opens U.S. HQ in Richardson


With amateur shutterbugs turning increasingly to digital cameras, a fast-growing Netherlands-based digital photo printer is expanding into the United States with a U.S. subsidiary, Photofun Inc.It will locate in Richardson.
At the low price of 5 cents a picture, Photofun expects to rapidly outgrow the initial 15,000-square-foot plant it plans to have leased, equipped and operating by early June, said Terry Rayner, president of Photofun Inc.

The company is searching for a site near Glenville Drive and Collins Boulevard in East Richardson's Telecom Corridor.
Photofun will hire about 15 employees starting in late April, including a plant manager; information technology professionals; equipment operators at $20 to $30 an hour; and final assembly and packaging employees at $12 to $18 an hour, Rayner said. Employees will be trained at an existing plant owned by Photofun's four-year-old parent company in The Netherlands, Webprint C.V., he said.

It's expected Photofun will grow faster than Webprint, which is at $10 million annual revenue and profitable, Rayner said.
Photofun's technology cuts production time and labor costs, giving it an edge over other online digital printers, he said. Driving growth is fast-growing sales of digital cameras and camera phones in the United States.

Photofun customers use an Internet site, www.photofun.com, to upload digital photos and place orders. The files move in real-time directly from the Web engine to its photo processing equipment, so that files are created, built and sent without any human contact. The company says its exclusive software reduces print time, cost and labor over that of competitors.
Customers can order various sized prints, as well as personalized photo products, like business cards, wall calendars, planners, greeting cards and photo albums. Most products are under $25, and the average sale per customer is $25, Rayner said. Photofun has no minimum order or membership fee.

Orders print and ship in two to three days, he said, except for photo albums, which take five days. The U.S. site went live March 15. For now, orders print in The Netherlands and ship via air cargo. Once the U.S. plant is operating, it will handle U.S. printing.
 


Market growth

In 2007, about 23% of total U.S. prints were ordered online and mailed, says Dimitrios Delis, director of marketing research at Michigan-based PMA, the international trade group for the imaging industry. For 2008, the projection is 26%. A 2007 survey of U.S. households found 46% have camera phones, a meteoric increase over 3% in 2003, he said.

U.S. spending on digital photos purchased from retailers or online stores grew 28% in 2007, accounting for 9.2 billion digital prints, Delis said. The price per print has fallen from 40 cents a print in 2002 to less than 10 cents now.

Retailers still profit, selling personalized photo products, which carry higher profit margins, Delis said. Five cents is as cheap as he's heard.
"Oh, my God, that's close to maybe the cost of making a print under the most productive process possible," Delis said.
 
Privately held Webprint C.V. is building a 90,000-square-foot plant in Hengela, The Netherlands, which will be completed in September as it expands throughout Europe. The company's executives project its revenue will reach $100 million by 2011. Webprint has raised $2 million in venture capital from Dutch investors toward funding Photofun's U.S. expansion, Rayner said. A remaining $3 million for equipment leases is being supplied through its equipment providers.
Photofun doesn't plan to stay in its 15,000-square-foot plant for long. If it grows as expected, it plans to start construction in 12 months on a 90,000-square-foot plant in Richardson, Garland or Plano. That plant would employ 30 to 50 employees.
 
Photofun Inc. President Terry Rayner
Dallas Business Journal - by Margaret Allen Staff Writer

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