Discussion

By Erik Nikkanen on May 07, 2008

I am sure there are a lot of smart and capable engineers at Heidelberg but they seem to have a problem with viewing the situation in a more realistic and flexible way. They seem to have little imagination and once they decide on a technical approach to the design of their presses, technologies or their business models, they march in that direction without noticing or caring about the realities around them.

As the market for presses in the industry in developed countries becomes increasingly more competitive and shrinks in size, increasing market share is critical for not only success but for survival. To increase market share for a press manufacturer, innovation at a lower cost is what is required. In many ways, Heidelberg goes in the opposite direction. It makes increasingly more expensive equipment that is not so innovative.

The Anicolor press is an attempt to be innovative, even though others have made practically the same concept before Heidelberg has. Not only did Heidelberg not learn from the lack of success of that basic concept from others, it goes and tries to make it work with water, which adds extra problems. The result is a press which costs more than a normal version but a press that can't run many other inks than CMYK. This is not innovation at any great level.

I am sure the engineers at Heidelberg are very proud of their on line density control technology being presented, but they are not aware that the same problem can be solved at a fraction of the cost if they took any interest in the cause of density variation.

Some in the developing world might pay for expensive technology but what they really need is low cost technology that performs better than what exists now. That takes innovation and the press manufacturer who can innovate a better performance/cost ratio into their technology will be the one that succeeds.

Is it possible that Heidelberg will become like GM where not much profit is earned making cars but more is earned in their financing activities. Will Heidelberg be more interested in developing the consumable and consulting part of their business than the press design business.

IMO, I have seen them making one mistake after another and eventually it will take its toll. Right now they are lucky because they are BIG and also because their competitors do not seem much better in their innovative efforts. But sooner or later, one of the other press manufacturers might get smart and produce technology that obsoletes the dated press concepts that now exist. Something with a much better performance/cost ratio.

By David Watson on May 08, 2008

Before the last DRUPA it was widely rumored that Heidelberg was going to buy Agfa. The announcement was expected by many during the show. Given Tribute's description of the shareholder disputes at Agfa and the division of Agfa into seperate operating businesses it would seem that Heidelberg could be considering this again. Agfa has the plate consumable business, distribution and service revenue they seem to be looking for. It would be ironic for Linotype-Hell to take over Agfa!

Who knows what will happen, but for the CEO to be quoted like this on the eve of DRUPA does make one think that big news is coming.

By David Watson on May 08, 2008

BRUSSELS, May 7 (Reuters ) - U.S. private equity group Gores is interested in Agfa-Gevaert and in particular the Belgian imaging technology group's healthcare division, according to an interview in Belgian magazine Trends.

"We find Agfa an interesting company with some great assets, and we are ready to speak about a partnership or a purchase," Ashley Abdo, Gores' executive responsible for mergers and takeovers in Europe, said on the magazine's website.

Gores has had an eye on Agfa for years, Abdo said. He said the most interesting division was healthcare, which sells film such as for X-rays and increasingly imaging and IT systems to hospitals and clinics.

"Gores knows a lot about healthcare. We own 50 medical imaging centres in the United States, and a few Gores people, myself included, have a background in healthcare," said Abdo, who is CEO of Belgian IT services company REAL, which is due to merge with sector peer Dolmen (DOLM.BR: Quote, Profile, Research).

"We naturally have a stronger affinity with Agfa Healthcare, but we are open to discussions on other activities."

Agfa-Gevaert Chief Executive Jo Cornu told Trends that Gores' interest was positive.

"That is an investor that has the correct profile," he said.

Agfa has hired investment bank Lazard to advise it on its strategic options.

It has said it needs partners or the partial or full sale of a division to cover large pension liabilities, notably in Germany. (Writing by Philip Blenkinsop, editing by Will Waterman)

By Jon Stevens on May 16, 2008

AGFA has always had superior technology but has struggled with very poor management. With the tremendous rollover of management you have to question how these managers got their jobs in the first place. Many of the current managers in the USA are ex- Kodak and DuPont employees with no leadership skills or vision of the future. They constantly chase numbers and do not build any infrastructure within the company. An outside takeover with a total restructuring of management would put AGFA imaging and informatics in a superior position to take advantage of the coming trends in healthcare both in the USA and worldwide.