As drupa 2004 approaches, what Heidelberger Druckmaschinen AG wants more than anything else is to be seen not as a remnant of what it was, but as a template for what its surviving components may yet enable it to become.
The €4.1 billion company—still the world's largest supplier of graphics equipment —doesn't believe it has forfeited the right to call itself a provider of “everything in print,” even if it can't walk the talk of its former motto with quite as much panache as it used to. Finding itself in the tricky position of having to fashion a new image without seeming to renounce the old one, the company is busy resolving a set of then-and-now dichotomies that pose—to say the least—an interesting challenge for its marketing department.
Eager to finesse its withdrawal from two major product markets, Heidelberg is heaping proprietary-sounding praise on developments in its web offset and NexPress digital print operations as if neither were being prepped for sale to a new owner. The company is also betting heavily that it can replace branded digital output with a branded digital workflow, Prinect, as its ticket to inclusion in the automated print plants of tomorrow.
Above all, Heidelberg is doing everything it can to encourage the belief that by regrouping around traditional strengths in sheetfed offset, postpress, and film/plate output, it has secured a reliable basis for future growthdespite the fact that not so long ago, manufacturing only conventional equipment was a road that the company insisted it could no longer afford to travel.
Until the many questions surrounding these multiple realities are removed, Heidelberg will have a more complicated story to tell than any other major manufacturer of graphic systems. Its massive presence at drupa probably will be only one element of a long campaign to create a fresh but still familiar impression in the minds of its customers.
Home-turf advantage
That effort began several weeks ago with an intensive pitch to the graphic arts trade media at the company's main installations in Heidelberg and Wiesloch, Germany, where more than 60 journalists from Europe, Asia, Latin America, and North America received two days (March 31-April 1) of briefings on nearly everything that Heidelberg wants to share about its product offerings and current strategic plans. A smaller group of American reporters spent an additional day at the Hofheim factory of POLAR-Mohr, Heidelberg's manufacturing partner for paper cutting and handling equipment.
Billed as a pre-drupa media event, the program reviewed the more than 50 new or enhanced systems that Heidelberg will present in Halls 1 and 2 at the drupa fairgrounds, where solutions will be organized into five customer-specific sectors: industrial print, commercial print, packaging, variable-data print, and commercial web. (Capsule descriptions of selected products from each sector appear at the end of the second part of this article.) The agenda also addressed, if only briefly, deals-in-progress with Eastman Kodak and Goss International Corp. for the respective sales of the NexPress digital print and Heidelberg Web divisionsboth of which will be showcased in Heidelberg's exhibit at drupa.
Senior executives also fielded reporters' questions about the company's commitment to direct imaging (DI) press technology and about its dug-in position against joining or supporting the workflow initiative known as NGP. Atypically for a large-scale media briefing by Heidelberg, the program included no projections of sales growth in any of the product markets in which the company intends to remain active.
Declining to show all of the cards in its drupa hand, Heidelberg promised more announcements from Messe Düsseldorf at a news conference to be held the day before the show opens on May 6. During the event, which runs through May 19, a 2,000-strong corps of Heidelberg sales and technical personnel will make an appropriate show of marketing force in the 7,800 square meters that its equipment-packed exhibit will occupy.
Dr. Klaus Spiegel, a member of Heidelberg's management board, convened the proceedings by calling the intended sales to Goss and Kodak steps in an important move towards repositioning our company. Although other speakers would indicate that both deals were moving forward without any apparent obstacles, Dr. Spiegel demurred when it came to particulars: We cannot comment at this time on further details about the contractual agreements made with the respective partners, he said.
Not a case of digital vs. offset
All he would offer about either transaction was that in the case of NexPress, Heidelberg had decided that its best prospects for growth lay in a direction other than digital printing and that it preferred to leave the pursuit of that technology to other providers. This is not a competition between digital and offset, he said. In other commentary on the prospective sale of NexPress, Heidelberg has said that it remains interested in digital printing and would work with Kodak to drive sales of NexPress products.
Dr. Spiegel and his colleagues were much more disposed to talk about Heidelberg's presentation at drupa and the central role that workflow will play in drawing its panoply of solutions together. In fact, at numerous points throughout the program, it was not easy to dismiss the thought that Heidelberg is now promoting itself primarily as a vendor of workflow software for production hardware that it also has the capability to supply. A media backgrounder given to the journalists described Prinect as the central and integrating element of Heidelberg's drupa presence, and Dr. Spiegel was just as unequivocal in his expression of what he hoped the reporters would take back to their readers concerning workflow.
Our only goal is to integrate prepress, press, and postpress in one transparent production management, including color workflow, he told the journalists. This is why we have made Prinect the central focus of this press event.
Dr. Spiegel acknowledged that production workflow remains an abstruse subject and therefore a low priority for many printers, particularly smaller ones. One reason that this group feels the greatest insecurity about the future development of the industry, he said, is that its members do not appreciate how much computer-integrated manufacturing can do to make their operations more prosperous.
This is partially the fault of those who devise and promote CIM solutions for printers, Dr. Spiegel admitted. Today everyone feels compelled to talk about workflow with various degrees of understanding, but without stopping to think that for many printers this term still has the stigma of incomprehensibility attached to it, he said. This means that from now on, Heidelberg will have its work cut out with respect to workflow, during drupa and afterwards: It is our task to transform insecurity into trust by elaborating on the benefits of all these workflow components regardless of the size of the print shop, Dr. Spiegel said.
With the help of process automation through workflow, said Dr. Spiegel, the industry could see an increase of 20 to 25 percent in offset productivity by 2008. Noting that Heidelberg's drupa program would emphasize practical applications of workflow for more than simply faster plate changes, he asked executives in charge of the exhibit's main sections to elaborate the details.
Emphasis on process as a whole
Dr. Jürgen Rautert, president of the postpress division and recently placed in charge of all research and development at Heidelberg, commented that the reason visitors to drupa will see no revolutionary speed increases in plate-changing, makeready, and other discrete production steps is that high efficiency has been achieved in these areas already. But he added that evidence of CIM's benefits to the process as a whole would be abundant, citing a computer-modeled virtual integration by Heidelberg that showed, he said, a 20 to 25 percent reduction in job throughput time with the addition of Prinect to the workflow.
Our duty is to provide the industry with even better solutions on the electronic side and on the cast-iron side to cut costs and boost efficiency, Dr. Rautert said. Acknowledging that it might take a long timeanother five yearsfor JDF (job definition format) and other workflow tools to reach all the way into the bindery, he said that the finishing department was precisely where Prinect's productivity-enhancing features could do the most good. This was because, he said, more than 50 percent of the time a sheet of paper is in the bindery normally is idle timea gross inefficiency of the kind that Prinect was built to eliminate.
As the president of Heidelberg's only U.S.-based manufacturing operation, Werner Albrecht has faced more questions than anyone else about what will happen if and when the sale of the company's web offset operations in Dover and Durham, N.H., to Goss goes through. Although the transaction is not expected to be closed by the time drupa opens, Albrecht and other Heidelberg executives expressed confidence that the deal would yield benefits to buyer, seller, and customers alike.
Albrecht said that one reason the sale makes sense is the minimal overlap of products between Heidelberg and the prospective buyer of its web offset division. Any other manufacturer would have more overlap, he said. Goss is a world leader in newspaper presses, while Heidelberg Web specializes in commercial presses in addition to a smaller portfolio of newspaper equipment.
Will keep a hand in web
Albrecht said that Heidelberg's decision to sell the division was firm, but he reminded the journalists that the deal with Goss, if completed, would keep Heidelberg involved with web offset printing in no trivial way. In previous announcements about the intended sale, Heidelberg has reported that the transaction would make it a shareholder in Goss, holding slightly less than 20 percent of the latter's shares. Albrecht indicated that the deal also would let Heidelberg retain a role in service and support, a provision that he said would be essential to protecting customers' interests after a changeover.
The customers should not and must not suffer, he declared.
In reviewing the equipment that the division will promote at drupa and presumably hand over to Goss, Albrecht described what seemed to be the fruits of a golden age of R&D in web offset: the world's first eight-across, two-around, 32-page press; another world first, a zero makeready press with an automatic transfer feature enabling plate changeovers for versioning at full printing speed; and a 100,000-iph pinless folder that can pace the press at any speed, among other innovations.
This prompted questions from some of the journalists about why an operation so rich in marketable technology would be up for sale in the first place, particularly in light of a comment by Dr. Spiegel that business at web division was brisk (Our order intake and backlog has never been as strong as it is at this moment).
Albrecht explained that while the division enjoys an outstanding market position in North America, long-term concerns ultimately outweighed short-range progress. He said that very difficult conditions continue to prevail in the web offset marketplace as a tentative, slow economic recovery and consolidations among the largest web printers cloud prospects for the division, which has the highest operating losses of any unit of Heidelberg.
Moreover, Albrecht noted, 75 percent of all web volume is tied to advertising expenditures, which he said will not return to pre-recession levels until 2006 or 2007.
He added that the division's customers, having seen consolidation and contraction aplenty in their own industry, understand that Heidelberg Web is in transition and will support the change as long as it is professionally handled.
In Part 2 : the power of Prinect; what's next for NexPress; why Winther thinks NGP is NG; drupa solution highlights.
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