Sheetfed presses were a bright spot in a lackluster 2002 for Koenig & Bauer AG (KBA), which boosted turnover in the first nine months of the year by 1.3 percent over the same period in 2001 largely on the strength of increased orders for sheetfed equipment. Although incoming order volume for the group as a whole during the period was down 9 percent from the previous year, KBA said that strength on the sheetfed side would help the company to achieve its 2002 pre-tax earnings target despite weakened demand for its newspaper and commercial web presses. This represented "above average" performance in a difficult business climate, according to KBA, the world’s third-largest manufacturer of printing presses.

KBA owes about $170 million of its current sheetfed and web offset sales to its North American operations: KBA North America Inc. Web Press Division, based in York, Pa.; and KBA North America Inc. Sheetfed Division, headquartered in Williston, Vt. The latter business unit employs 100 people and handles sales and service for German-made KBA sheetfed offset presses in the U.S. and Canada. Its products include the Rapida line of medium- and large-format conventional sheetfed presses; the 74 Karat DI (direct imaging) press; and, to be introduced to the North American market in 2003, the KBA Genius 52, a uniquely designed, short- and medium-run press in a B3 format.

Ensuring the continued vigor of the Sheetfed Division is the mission of Ralf Sammeck, who succeeded Allan F. Malachuk as its president and CEO on October 1, 2002. Sammeck, 40, joined KBA two years ago and moved from Germany to Vermont last June. A former marketing and sales manager for Heidelberger Druckmaschinen AG, he was promoted to president of the company’s largest German branches in Stuttgart and Düsseldorf. During his tenure with KBA before moving to the U.S., Sammeck was president of the KBA Karat Digital Press Division with responsibility for worldwide sales and marketing of the Karat line.

WhatTheyThink.com recently asked him to comment on the business outlook for print equipment manufacturers and on the Sheetfed Division’s strategy for continued growth in a challenging market.

WTT: Two other well-known German press manufacturers have recently reported disappointing financial results for 2002. Please describe the current sales and profit picture for KBA North America and for its parent company, the Koenig & Bauer Group.

RS: Our parent company is making important investments in the North American market. I will be working with Eric Frank, our new vice president for marketing, to increase sales activities to penetrate the market, with an emphasis on publicizing our machines’ versatility.

KBA is the market leader in the packaging industry. One of our primary goals is to broadcast KBA’s innovative technology towards commercial printing as well. Financially, the North American Sheetfed Division is strong, our market share is growing, and our customer base is becoming more diverse. Internationally, KBA has had continuous growth in 2002 in 20 percent of the sheetfed market. Remember, our foundation is in the packaging industry and this market is still quite stable in this economic climate.


WTT: The consensus among many printers, vendors, and suppliers is that for the printing industry, economic recovery in 2003 will be slow and modest at best. Do you share this view, or do you have a different outlook?

RS: I do share this view. However, I have traveled extensively since coming to the U.S., and I have visited several printers with strong results. These are the companies that have diverse customer bases and are providing new services such as on-demand printing that can be achieved with our 74 Karat press. The larger companies that have adopted our 74 Karat press are seeing smaller run-length jobs, but many more of them. Today’s successful printers have to adapt to the special needs of each market.


WTT: KBA North America serves many different niche markets with presses for newspapers, packaging, digital printing, commercial printing, etc. Which of these markets will be the most robust in 2003?

RS: Clearly, packaging has and will continue to be strong. Packaging shops are looking for greater productivity, shorter turnaround times, and new press configurations to allow them unique market advantages. The beauty of KBA’s Rapida is its resourcefulness: as our customers’ printing demands increase and vary in terms of product and material, production for a variety of outputs can be accomplished on one single press.

We will also see growth in digital as well as the commercial market since we offer distinct benefits to both. Two examples are our new inline coater for the 74 Karat press and our new Rapida 105 perfector with a special configuration of five printing units with a tower coater and then five more printing units and a second tower coater. This 13-unit press allows a printer to have excellent one-pass productivity.

We will see challenges in any market segment justifying new capital expenditures. We will need solid cost justification calculations and shortened ROI time frames.


WTT: Because printing markets are weak, printers are especially concerned about overcapacity. They worry that because there are so many presses in the marketplace, their work will become commoditized and their profits will not recover. As a press manufacturing CEO whose job is to sell more presses and put more capacity into the marketplace, how can you address these concerns?

RS: This is an important issue. We will not sell presses just to move inventories, and we will not jeopardize long-term profits for market capacity. This is the benefit of a long-term strategic company. Remember, we are the oldest press manufacturer in the world. We do have experience in all market conditions.

We need to look at two ways to address this issue. The first is to sell to companies that have older equipment that are not cost competitive due to productivity issues. The second is to sell to companies that are looking to offer new services to better serve these markets. We have a very experienced sales team who deeply integrate themselves into our customer organizations to ensure a solid and long-term benefit of any new press installation.


WTT: I was told at Graph Expo that one of the main objectives for KBA North America will be to get stronger in the "professional" print market for commercial work, books, and packaging. You face a lot of competition from Heidelberg, MAN Roland, Komori, etc., in this market. What are your specific targets, and how will you achieve them?

RS: We will do what we have always done and what we do best: offer presses with competitive prices that not only deliver the highest quality printing, but also offer flexibility as printing demands shift. We also offer the industry’s best in class after-sale customer service. KBA’s customer satisfaction rating is extremely high due to ongoing personalized service from a team of experienced and talented engineers. We will expand with new and innovative programs that will yield greater profits for our customers.

I know this sounds too good but being a smaller and more nimble organization allows us to adjust to each customer’s needs whether it be with custom training, a special new press configuration, or a new integrated technology. Together with our parent organization we can customize to tackle each customer’s individual printing needs..


WTT: I was also told that the Genius 52, KBA’s innovative compact press for short- to medium-run work, will be a "GTO killer" in the markets it is intended for. What makes KBA so confident in this press?

RS: The Genius 52 is extremely promising. It is designed for the American market with a small footprint; it is extremely easy to operate and very affordable. We have built the Genius 52 with four or five printing units arranged in a V-shape around a central impression cylinder. Due to such features as our fully automatic plate changer and GravuFlow inking system, which is the same as on our 74 Karat, the Genius 52 produces a high-quality sheet that will allow many quick printers and small commercial shops to affordably compete in the multi-color market.

The American market really embraces change and is open to new technologies. This is why we are confident that the Genius will serve the market so well.


WTT: Another innovative piece of equipment from KBA, the 74 Karat direct imaging (DI) offset press, has had about 20 installations in the U.S. since its introduction here two years ago. Some say that DI presses are a hard sell nowadays because of competition from off-press CTP systems and plateless digital presses. As the former executive in charge of the Karat Digital Press Division, what do you believe it will take to convince printers to take a closer look at DI presses such as the 74 Karat?

RS: There is no single answer to this question, but I do believe that it takes a greater understanding of a printer’s internal operating costs combined with a strategic new direction of the printer’s selling processes. We are developing support tools for helping with both of these issues. We will introduce a new cost calculation program to dig deeper into operating costs and new business development concepts to help medium and large printers sell jobs that reflect shorter run lengths and require faster turnaround times.

The 74 Karat also offers many unique and profitable opportunities to a printer. It can image all plates and do a complete makeready in less than 15 minutes to the first sellable sheet. With the GravuFlow inking system, we have almost no waste and can deliver sellable prints within ten sheets. The 74 Karat has raised the bar in direct imaging quality and requires only one operator. It allows printers to differentiate themselves, and our customers all rave at the higher margins they are achieving with the 74 Karat.

Another potential new market is printing on plastics. The 74 Karat can print on specialty materials such as plastics, and this opens additional markets. In fact, our international marketing expert for the 74 Karat has just agreed to come and work permanently in the U.S., so expect many new marketing and support programs very shortly.


WTT: Please talk about digital production workflows: specifically, about what KBA is doing to make its presses compliant with the JDF (job definition format) standard advocated by the CIP4 consortium, of which KBA is a member.

RS: KBA is a strong supporter of the new and open standards. We are completely compliant with JDF; our LogoTronic Professional system allows printers to link their front-end systems directly with our presses. KBA is ensuring that all future products are completely integrated with the goal of reducing total throughput time with such tools as JDF


WTT: As president and CEO of KBA North America’s Sheetfed Division, what will you take the most pride in achieving in 2003, your first full year in the position?

RS: My greatest joy is visiting with customers and getting out and talking with printers of all shapes and sizes in the market. KBA has always been known as a "hands-on" company. We have always listened and adapted very quickly to the market’s needs. By providing the best customer support--before and most importantly after the sale--our organization and customer base will grow.