(Edited for clarification)
On January 7, Reuters reported that Heidelberg is looking for a digital printing partner, according to Handelsblatt, a German business newspaper. Heidelberg is considering both a joint venture and/or a stake purchase in a digital printing company, including Kodak NEXPRESS and others.
Handelsblatt said Heidelberg was not immediately available for comment.
“Digital printing is becoming interesting again as a rather stable business. Heidelberg is looking for a partner and has looked at, among others, NEXPRESS,” the newspaper cited an unnamed source as saying.
It was just about 6 years ago, that WhatTheyThink published an interview with Niels Winther, then president of Heidelberg USA, to understand the thinking behind the spin-off of the digital printing business unit and the sale of Heidelberg’s share of NEXPRESS to Kodak. (Mr. Winther left Heidelberg in September 2004. He is now Chairman and Managing Partner of Think Patented, a marketing services provider and digital and offset printer, in Dayton OH.)
Some of the questions we posed were:
- After the announcement of the changes regarding the company’s web and digital divisions at On Demand, there were whispers that Heidelberg had sold the wrong divisions and kept the most “at risk” portion of the product portfolio. Would you comment on that?
- Sheetfed offset has all the appearances of a shrinking market. So you see growth opportunities there for Heidelberg?
- What about digital? A lot of folks think the future of print lies with digital. Without the digital division how will you be involved in that market?
Clearly, the company believed at the time that the right decision was to pursue sheetfed offset instead of digital printing.
By 2008, however, changing markets and the changing economy caught up with Heidelberg. In 2008, the company launched a cost cutting program to save up to €200 million including cuts of up to 2,500 jobs. More cost cutting programs were rolled out in mid-March 2009 and by mid-June Heidelberg was in financial crisis.
In late November 2009, Heidelberg began a corporate restructuring. Tucked into the new Heidelberg Equipment business unit is the Linoprint system – a drop-on-demand inkjet digital printing system developed in house. While Linoprint is currently targeting the packaging industries, it is a step back into the digital printing world. All of Heidelberg’s announcements are available on the company’s investor realtions news webpage.
Here we are, six years later, and the compass arrow has made a full swing. It points again to digital.
If you haven’t heard Frank Romano’s comments on the decision, check it out here (requires Premium Access).
Discussion
By Martin on Jan 15, 2010
Digital printing manufacturers, partnerships, and distributors continue to evolve every year, or rather every few months the way things have been going. It has been said many times that Heidelberg did not necessarily get out of digital print but rather Allianz did on behalf of Heidelberg.
There have been suggestions of talks by Heidelberg with Kodak NEXPRESS to join back up with them and to work again on selling digital. Though even the long term viability of NEXPRESS has been questiond for the last year or so with many blogs and even the WSJ getting caught up in the mix reporting incorrect information. Kodak publicly supports and fully intends to support NEXPRESS.
There has been no mention of Heidelberg considering looking to invest or acquire Océ not far away from them in Venlo, Netherlands. The Océ Canon merger has recently been brought into question as to whether or not it will go through with some shareholders unhappy with the offer. As the largest digital company in Europe this would seam to be not all that terrible of an idea to consider.
The larger issue is when speaking about digital may be is there a potential clear separation in the future between toner and inkjet technologies. While toner printing technology is not expected to go away it is also not expected to see significant growth. Around the year 2000 toner had mostly reached its peak and is basically flatlining when page volume is graphed as historical and future predictions. Inkjet on the other hand is expected when graphed to look like right angle triangle with continual growth year after year for the next 40 years.
Linoprint from Heidelberg is brought up from time to time and I am often surprised on how little it is ever discussed or even known of by many in the industry. Even Heidelberg employees seem to not really be all that well informed of what is available and what future the technology may hold. I site asking numerous employees at the last Drupa with little to no comments to share along with several dear in headlights looks with the mention of Heidelberg, Linoprint, and inkjet.
Linoprint now has a narrow web inkjet press similar to other manufacturers such as Jetrion and Durst but most do not know anything about it, or that is exists. At Labelexpo Europe 2009 Heidelberg was absent from the show except say maybe for Gallus which it owns 30% of.
Kodak is heavily investing and banking on inkjet to lead them through this next decade and beyond as well as several other industry players. Both Fuji and Screen are looking more to inkjet as well and showed larger then historically available sheetfed digital presses at Drupa that use inkjet technology. These sheetfed inkjet machines are built like offset utilizing a core frame which is similar except with inkjet technology in the middle of the feeder and delivery. Could this be the future for Heidelberg over a more traditional toner world? Back in 2009 there was some mention on beyond-print of Heidelberg working on something digital but it was fairly obscure and not at all specific.
Guess we’ll have to wait and see 2010 should be an interesting one.
By Michael J on Jan 15, 2010
Martin,
I think you make a very good point about the distinction between toner and ink jet. It might be time to revise the mindset that sees the divide between digital and offset.
Just last month the Prosper has finally come to market with the first announced deal by Consolidated in Texas. If the TOC and price points that Kodak has announced for the Prosper bear out, it could well become the low cost ink jet web output machine on the street.
Consider what a Kodak/Heidelberg deal might mean on the offset side. Kodak's Prinergy seems to now be focused on seamless workflow from offset to the Prosper.
Given Kodak's lead in the offset workflow and Heidelberg's lead in the offset output device it sounds like a synergy to me.
The other issue in play is that KKR is a recent major player at Kodak. KKR has a very different dna from the institutional investors in Kodak.
It's worth noting that Kodak closed today over 5 after sitting at around 4.20 for a long time.
I have to agree with Martin that this will be a very interesting 2010.
By Erik Nikkanen on Jan 16, 2010
Spinning compass or lack of direction at Heidelberg. I am not sure I really care. They seem to be committed to making strange decisions.
What I would like to know is where Dr.Jürgen Rautert is going to end up after he left the company? Will he stay in the printing industry or leave like so many other innovative people have, who the old guard would not listen to?
If anyone knows where Dr. Rautert has gone, I would be interested. He still might be someone who's career would be of interest to follow.
By Rick Littrell on Jan 18, 2010
I just don't see the advantage of Heidelberg partnering with Kodak (again). Seems that for Heidelberg to get back in the digital print game, they HAVE to go with inkjet technology as their base strategy. Additionally, any OEM or partnership with another large graphic arts vendor will not prove profitable for either of them. They have a slight issue with overhead costs and channel conflict.
Heidelberg needs to OWN the product and technology if they are to grow into the future or will they just fade away as another vendor that was not able to make the transition to a digital world. That's the only way that they can get the cost of product down to what they need and for their channel to embrace the product. If it is just another OEM/partnership deal, Heidelberg does not offer enough value add for them to distribute it successfully AND make money, which is the reason to sell product, right? Just putting their logo on it and putting it in their price books is not enough. Hasn't history already taught us that lesson?
By Michael J on Jan 18, 2010
Rick,
Just a note "They HAVE to go with inkjet technology as their base strategy." I think Kodak's Prosper technology fills that need.
Also
"Heidelberg needs to OWN the product and technology" I think in a networked economy "own" is sometimes less important than creating a platform and the connections where everyone does what they do best, leave the rest, and make money on the mutual growth going forward.
By Erik Nikkanen on Jan 18, 2010
I don't think Heidelberg has to go to digital print. There are still big advantages in the potential of offset.
Even though offset is in a shrinking market, there is still the chance of increasing market share and volumes, if Heidelberg would only rethink what it is doing. I have said for years that there is great potential to improve the performance of offset at a lower capital cost. More performance at lower cost is what will gain volume and damage competitors.
Moving to revolutionary offset concepts, that can be designed and built now, is more in line with Heidelberg's culture than moving to inkjet or toner based digital presses. Basically with their same infrastructure, a bit of new guidance can lead them there.
All press manufacturers have not addressed the challenge of digital print with any great innovative effort or result. Where's the war? Where's the battle? They let the digital press gets its foot in the door and establish itself. Right now, digital print seems to have hit a wall and the progress has slowed down. There is still time to shut that door at least a bit if some action is taken.
Digital press manufacturers are at risk. They spend lots of money on development efforts that quickly get obsolete. Also the digital press concept is quite easy for independent machine builders to develop. Buy the components such as rollers, unwinds and rewinds and assemble a digital web press in your garage. Cut the top of old offset press towers off to remove the roller trains and then add the latest inkjet technology to get a sheetfed digital press.
If offset presses get improved performance and have a lower capital cost that just adds more worries to the digital press manufacturers that are culturally not in this for the long run.
I don't see a fight. What I see is the waving of white flags.
By Jan Eskildsen on Jan 21, 2010
"Wolfgang Pfizenmaier: Heidelberg is now firmly established on the digital printing market. We have a range of exciting solutions available for all commercial applications, covering everything from digital color and black- and-white printing to digital offset printing. And of course, our joint venture with Kodak has increased our status as a solutions provider immensely. After just four years of development, we were able to successfully launch the NexPress 2100 onto the market. To put it simply, I cannot imagine Heidelberg without digital printing, just as I cannot imagine digital printing without Heidelberg. We are all agreed that digital printing will play a huge role in shaping the future of printing as a whole.
(Source: http://www.heidelberg.com/www/html/en/content/articles/press_lounge/history/digital_printing/020313_future_of_digital_printing).
"Press Release, March 2004: Kodak to Acquire Two Heidelberg Businesses: NexPress Solutions and Heidelberg Digital. ROCHESTER, NY, USA—Eastman Kodak Company reports it has agreed to acquire two lines of business from Heidelberger Druckmaschinen AG. According to Kodak, it will purchase Heidelberg's 50 percent interest in NexPress Solutions LLC, a 50/50 joint venture of Kodak and Heidelberg that makes digital color printing systems, and the equity of Heidelberg Digital LLC., a leading maker of digital black-and-white printing systems. Kodak says it also will acquire NexPress GmbH, Heidelberg's German subsidiary, and certain inventory and assets held by Heidelberg's regional operations, or market centers, as well as offer employment to sales and service employees currently with Heidelberg's market centers."
After Heidelberg sold out to Kodak, they invested in the inkjet company Spectra, now Fuji Dimatix – for what reason? After releasing Linoprint they kept saying, that they would not go into digital, but stay in offset. And they invested in a new factory for Very Large Format offset ... where they have clever competitors like KBA and Manroland.
Now the are talking digital again. Well, if their sales men still have so much heavy metal in their heads and tell people that digital print 'is not our business', a they did years before H joined K to develop NexPress - which for that reason could not be sold successfully by H - they won't succeed.
If they don't get a new sales force, or a special sales force that understands digital, 1-to-1 and all the possibilities in the related software, they can forget it.
Yes, I also ask myself what is wrong in the top, since innovative people have to go.
If you invest in shares, you don't look at a bright past, but ask yourself, what do they have to offer in the future, that nobody else have?
it is as simple as that. And what does H have of that kind? I can't see it.
The erratic course has ruled for so long, that it is difficult to convince the surroundings, that they will be committed to a new decision.
Discussion
Only verified members can comment.