Commentary & Analysis
Heidelberg - Looking Good for the Future!
Things are looking great for Heidelberg. Andy Tribute looks at the recent moves the company has made to position itself financially and strategically and discusses how its relationship with Ricoh could influence its future.
By Andrew Tribute
Published: April 12, 2011
In these times of poor news for the industry it is good to find out that the leading supplier, Heidelberg, is going through a good period. Considering the state of the industry and the very difficult period Heidelberg has been through in the past few years that may appear a strange statement. The reason however is things are moving well for the company. In February Heidelberg made its announcement of a re-entry in the digital printing market with its new partner Ricoh. In the past month it has restructured its balance sheet with new capital and in the past week it has had its financial bond over subscribed to enhance its financial guarantees. This means it has repaid its government and local government loans and has extended its line of credit way into the future. This vote of confidence from the German financial community has been brought about by the financial and operational restructuring the company has taken over the past years and also the company's showing in many of its markets where demands for its products is increasing. This is predominantly in the developing markets (if one can still call them that) of Brazil, China and Russia as well as much of the Far East. It is hoped that the Print China event taking place in early April will show this demand in action.
The new approach for Heidelberg in the digital printing area was defined this past week at the new digi:media event in Düsseldorf, Germany. Here Heidelberg and Ricoh outlined how their partnership should work and how the two companies plan to work together. Bernhard Schreier, the Chairman and CEO of Heidelberg stated that their investigation of potential partners showed that Ricoh and Heidelberg shared very similar business approaches in business ethics, a pursuit of excellence and a fundamental belief in customer support. They also saw their approaches to selling were similar. The approach is one of a partnership starting initially as an extended reseller agreement and developing into one of co-development of future products and technologies. The initial approach is for Heidelberg to link the Ricoh C901 Graphic Arts Edition digital press into the Heidelberg Printect workflow to offer a linked coordinated offset/digital strategy from a common workflow. The aim of this is to provide customers with a solution that allows a choice to be made on the printing technology to use dependant upon the run length or immediacy of demand while maintaining a matching quality. For the future the companies will set up a development council to plan future developments or products and to work with both companies' R&D groups.
While this is a non-exclusive agreement Ricoh has indicated that while there is nothing to stop it reaching agreements with other graphic arts suppliers it will put all its support in ensuring its agreement with Heidelberg is a success. Ricoh however will continue to sell the C901 Graphic Arts Edition press through its own sales channels, particularly while Heidelberg is building up its sales channels to sell digital printing once again. It is expected that eventually all the Heidelberg sales channels will sell the Ricoh press, even if today they have arrangements in place to sell competitive products. This is particularly the case with direct subsidiaries of Heidelberg such as Heidelberg Australia that has recently signed an agreement to sell Konica Minolta equipment.
The sales by Heidelberg of the Ricoh press have already started in Germany and the UK and the first sale has been made. It will then move into other parts of Europe before going outside this area. It is anticipated that the agreement will be launched in North America at GraphExpo in October this year, and for most of the rest of the world by drupa 2012 in May next year.
At digi:media the new strategy was launched by demonstrating how a job could be ordered over the Internet taking variable data input on a web to print system. The job was then printed using a mix of offset and digital printing with the Heidelberg Speedmaster 52 Anicolor, the Ricoh C901 Graphic Arts Edition press, and the Linoprint Driveline B inkjet packaging press. This was then bound using a number of Heidelberg finishing systems. The presses were all driven by the Heidelberg Prinect system using the same color management approach. This was done through the Prinect Digital Print Manager and this passed the color settings to the Ricoh press overriding the color setting of the EFI Fiery DFE. The color from both presses was very comparable and very acceptable for the type of work being produced.
Heidelberg indicate that the digital press approach they are using is ideally suited for the majority of Heidelberg customers with a price level for the press of under €100,000, a performance of up to 90 pages/min, quality comparable to offset, and full service via one supplier. The benefits of working to a common workflow with the same color management are major strengths of the approach. Heidelberg will further develop the approach with solutions for business development and training to help customers change their business models to develop multi-channel communications approaches.
Obviously it is early days to assess how well Heidelberg will succeed in this new approach to the digital print market but from what I have seen and heard I think they have a good chance to become one of the key players in this area. They have chosen a partner that makes a very impressive press. Last month Ricoh shipped 250 C901 Graphic Arts Edition presses worldwide so we can see the press is a good product. Ricoh also has great technologies and we can envisage a range of presses to sell through the Heidelberg channel. I personally would not be surprised if Ricoh also introduces its own high-speed inkjet web press, and this too in future could go through the Heidelberg channel. This however is pure speculation, and while I am in that mode let me speculate further. Ricoh has a history of acquiring some of its distribution channels. In the past this has included Danka, Ikon, Gestetner and Infoprint Solutions. Who is to say it might not make an investment in Heidelberg in the future?