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Interview

Fujifilm Graphic Systems USA: Tim Combs Speaks Out

Fujifilm Graphic Systems USA:

By WhatTheyThink Staff
Published: April 12, 2007

Fujifilm Graphic Systems USA: Tim Combs Speaks Out By Cary Sherburne, Senior WTT Editor April 12, 2007 -- WhatTheyThink checked in with Tim Combs, FUJIFILM Graphic Systems U.S.A., Inc. Senior Vice President of Sales & Marketing, covering a wide range of topics from the latest company news to what to expect from FUJIFILM Graphic Systems U.S.A., Inc. at On Demand and Graph Expo, and the impact of Agfa’s recent channel changes. Combs also weighs in on the thermal/violet debate. WTT: It has been about a year now since your organization was renamed from Enovation to FUJIFILM Graphic Systems U.S.A., Inc. What has been the customer feedback, if any, and has anything else changed organizationally besides the name? TC: Nothing really changed organizationally. It’s still the same people and the same company structure. The name change itself was really a non-event, or at least that is my perception. We didn’t think it needed a lot of fanfare. When Enovation was originally formed in 2001 with our acquisition of our three largest distributors, there was a concern on the part of some of the management of those companies that naming the new organization FUJIFILM would upset some of the vendors, including Kodak and Agfa. My comment at that time was that naming the company something else was not going to disguise our distribution strategy; they are smarter than that. So even with the name, I think that people still considered us FUJIFILM. Yet I think the name created some market confusion. The name change we underwent last year was part of a worldwide name change for FUJIFILM Group and it’s put us in line with the other graphic arts entities in other parts of the world. Also, in going back to the FUJIFILM name, we are able to capitalize on and benefit from the brand equity that the FUJIFILM name carries. Worldwide it stands for quality and expertise and we strive to bring that to our customers every day. In the U.S. market, we have strong partnerships with both Rampage and Screen for workflow offerings and their products complement ours quite well. WTT: At Graph Expo, I saw a technology demo of your new workflow offering, which incorporates Adobe PDF Print Engine. It was probably the best implementation I saw at the show. Where are you with it now in terms of a release schedule and what type of customer feedback are you getting? Will you be showing that at On Demand? TC: That product, called XMF, was a technology showing during Graph Expo. It’s a workflow product that’s moving forward in Europe and will eventually replace the FUJIFILM Celebrant workflow there. Currently, however, there aren’t any plans for it in the U.S. market. In the U.S. market, we have strong partnerships with both Rampage and Screen for workflow offerings and their products complement ours quite well. They each have terrific responsiveness and are very attentive to our customers’ needs. WTT: What will you be showing at On Demand? TC: Primarily our digital press offerings, the Xerox product line. Our workflow offering for digital presses is EFI, and we will be showing that as well. The FUJIFILM differentiator is the after-sales support and color management capabilities we’re able to provide. We live in the world of commercial print every day, and we find that customers respond well to our color management and professional services that help customize the solutions to their businesses. WTT: What is the status of the iGen3? You were originally reference selling that product. TC: Our fiscal year starts this month, and as of the start of the fiscal year, we are selling the iGen3 directly. We are in the process of training our sales force as we speak. WTT: FUJIFILM has been talking about processless plates for some time now, but they have not yet been commercialized in the North American market. What is the schedule there? TC: The thermal plate is currently commercialized and has been implemented by a number of customers already. But, again, we want to ensure that these plates are put in the right environment and that the customer gets the expected performance. We go through an in-depth qualification process before we actually convert anyone to the processless plates. But, in terms of manufacturing, inventory, availability, etc., on the thermal side, the plate – named the FUJIFILM Brillia Thermal Processless Plate - is there and ready to roll. WTT: In a recent interview with Rick Black, CEO of ECRM, he indicated FUJIFILM had gone back to the drawing board on the violet processless plates to develop a plate that required less power to image. Can you comment on that? We only have four dealer companies left in our distribution model. Ninety-five percent of our sales come from the direct sales force. TC: On the violet side, our processless plate has not yet reached the controlled sale stage, mostly because it is not clear which lasers on the violet side will actually be available for the imaging engine. It would be better if we had stronger lasers, but we keep hearing mixed messages regarding the laser technology and the strength of the laser itself is what affects the emulsion on the plate. We also need to further analyze the fit for the violet processless plate in the U.S. market before we go forward with it here. WTT: What is the mix you are seeing in the marketplace between violet and thermal installations, and do you have any opinions about which will ultimately become the de facto standard? TC: Our sales are almost 90% CTP; we don’t sell that much analog anymore. Out of that 90%, 75% to 80% of those sales are thermal plates. So for the U.S., thermal is really the de facto standard. The violet product has some good applications in certain areas, including a strong appeal where the user wants high throughput, such as newspaper publishers and yearbook printers. Thermal over the past year or so has started to approach that level, but prior to that, violet was the only solution that would get you there. There is no question about printability or resolution. It really, then, comes down to the printer’s environment. The white light handling for thermal products is an easier, more flexible environment in which to move around equipment and handle plates. Plus, the processing chemistry charges, depending on volume, can be more attractive for thermal than for violet. WTT: Agfa created quite a stir when it restructured its dealer channel recently. What is FUJIFILM’s channel strategy and have you benefited from the Agfa shakeout? TC: We only have four dealer companies left in our distribution model. Ninety-five percent of our sales come from the direct sales force. The dealer companies we have support us in very specific markets because they have done a nice job there and we have a good partnership with them in those locations. Royce Photographic in Salt Lake City is a good example. Salt Lake City is a bit isolated in terms of geography. Royce has a good presence there and great customer relationships, and they work closely with us as a true partner. Our dealer strategy is to continue for the foreseeable future with these four companies as our partners. We don’t anticipate any change, but we won’t expand it either. I am sure we picked up some business because a dealer that was suddenly no longer an Agfa dealer couldn’t provide product and that gave our sales force an opening to talk about a FUJIFILM product. But it certainly hasn’t caused us to rethink our channel strategy. We acquired distribution companies to form FUJIFILM Graphic Systems U.S.A., Inc., and we have no intention of going back to an expanded channel. WTT: Do you think the situation with consumables pricing has stabilized? How do you see the pricing levels changing over the next 12 to 18 months? TC: I would like to think that aluminum will drop back in price. Over the last 18 to 24 months, we have had 55% to 60% price increases on aluminum, and the cost of silver has doubled. We don’t see any sign of price decreases, though, unfortunately. China puts a drain on world supplies with its significant demand for aluminum for construction materials, and that doesn’t seem to be letting up. I keep hoping they will open up their own aluminum manufacturing, but doesn’t seem to be in the cards, at least in the near term. We have passed on price increases to end users in the area of film and plates. But I will be honest with you—those increases have not covered the cost increases we have had to bear in raw materials. If those costs continue to escalate, we will have to continue to raise prices on printing plates to cover those costs. Everyone else is in the same boat. Over the last 18 to 24 months, we have had 55% to 60% price increases on aluminum, and the cost of silver has doubled. We don’t see any sign of price decreases, though, unfortunately. China puts a drain on world supplies with its significant demand for aluminum for construction materials, and that doesn’t seem to be letting up. WTT: Can you provide us with a sneak peek of the types of things we might see from FUJIFILM Graphic Systems U.S.A., Inc. at Graph Expo and then at drupa 2008, which feels like it is almost upon us? TC: Perhaps I could frame that better by talking about the businesses that are changing or expanding for us. One of those is the world of wide format. At ISA, we are introducing two new mid-range three-meter wide format products, a UV flatbed device and a high-speed solvent roll-fed device. There are huge opportunities for growth in wide format. You’ll also see those products again at Graph Expo. As you may know, we have established a dedicated sales group for wide format and FUJIFILM has made a number of acquisitions in the area of inkjet products, and we see that as an important product area going forward. You will see products from us at Graph Expo that support customers in that area. I don’t really expect to see any significant new products in the traditional sense, but there is a lot of interest in digital presses and people like to come to shows to see that equipment. We have seen a resurgence of interest at Graph Expo in digital, and we don’t expect this year to be any different. As far as drupa 2008, it’s still a bit too early to talk about what we’ll be showing there. WTT: Tim, thanks for speaking with us today. Is there anything else you would like to add before we close? TC: I want to make sure that the WhatTheyThink readership understands that we’re in the graphic communications business for the long haul. We continue to make acquisitions to expand our capabilities, such as our wide format acquisition. We are in the process of completing our second plate manufacturing facility in China, so we have a worldwide plate manufacturing strategy that covers the U.S., Europe, Japan and China. And, while there will be changes, we believe graphic communications will continue to be a strong industry for a significant period of time. It is a market that we are absolutely committed to. We are committed to bringing graphic communications service providers the best quality products with the best quality service to help them navigate through the changes that are sure to come. We need to make sure our customers stay in strong and viable businesses in order for us to stay strong and viable, and we are working hard to make sure that happens.

 

 

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