Ergo Asia expects its acquisition by Konica Minolta will spur huge expansion across Australia and Asia, chief executive Eugene Cora told ProPrint today.
The Australian-based print management company, which at last count had approaching $200m in turnover, has just been bought by Konica Minolta as part of the digital print manufacturer’s global diversification plan.
While Ergo will maintain total independence as part of Konica Minolta, Cora says the deal gives Ergo extra financial muscle and access to more expansion potential in the Asia-Pacific, greatly increasing the value of its client base.
“We gain their financial strength and investment capability to allow us to expand faster and grow the business,” he says.
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Also speaking to ProPrint today, Konica Minolta professional print planning general manager Toshitaka Uemura says Ergo will benefit from strong backing from Konica Minolta to expand the businesses for the next step in its journey to become a global services provider.
“Also, Ergo will obtain stronger credibility to tackle even the largest client challenge and business investment, while Konica Minolta will benefit from additional services portfolio which can be offered to our larger global clients,” he says.
Cora – who founded the company only ten years ago – says Ergo will continue running in its existing locations as a completely independent operation under Konica Minolta ownership, and all 180 staff will be retained.
“We are keeping our name and the senior management team are all staying. Our valued clients should not notice any changes to the day to day running of Ergo Asia,” he says.
“Essentially we will end up with one company dealing with more geography.”
He also says the terms of the acquisition guarantees Ergo’s independence in selecting print partners and it will not have to preference printers using Konica Minolta equipment.
Uemura says Konica Minolta will use its association with Ergo to communicate with more potential customers.
“Konica Minolta will have direct touch point to the global brand clients via Ergo to obtain the actual voice of the demand for the marketing print which requires high quality and innovation,” he says.
“We will also have wider communication with production printers to understand their processes from upper stream. Both these voices of clients will improve our services, solutions and products generally that we offer.
“Demand for digital printing systems for commercial print is increasing, and Konica Minolta will benefit from closer links with commercial printers as a result of acquiring Ergo.”
Ergo’s Australian sales grew by 29.8 per cent to $100.3m in 2012, though net profit fell 9.5 per cent to $2.1m. Total sales from its Australian and Asian businesses are now approaching $200m. Ergo operates in virtually every country in the region.
Though about 60 per cent of its revenue was from Australia, most of its growth is offshore and likely now only accounts for 50-55 per cent, as predicted by Cora last year.
Cora says that as he is now part of a publically listed company he cannot reveal Ergo’s financials, but that the company has had significant growth since that time despite the contracting print market, and both profits and revenue continue to climb.
He says Ergo has retained major contracts with Coles and Centrelink, added several new similar sized clients in Australia and China, recently opened offices in Honk Kong and Taiwan, and now manages about 100 clients.
ProPrint previously reported Ergo’s wins of a more than $25m-a-year contract with Coles in 2012, and $10m with Centrelink in 2010.
Cora says Konica Minolta approached Ergo about a year ago about acquisition and the two companies evaluated many options before settling on this arrangement and that the businesses’ similar cultures and global reach were driving factors.
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Uemura says the acquisition is a logical consequence to Konica Minolta’s expansion into the marketing print management sector.
“Ergo has sophisticated services management know-how and network, but also its application system, leading to higher productivity in running the business focusing on the marketing production management,” he says.
“These include digital production, digital asset management, studio services, software provision, retail display production and print production with its vast geographic coverage.”
Uemura says its clients now expect manufacturers to add value by offering new approaches and services to sales and marketing efforts and that deploying marketing print management services globally will meet and exceed their demand.
He says the company’s decision to get into print management via Ergo, along with buying Charterhouse in 2012, is not a result of falling printing equipment sales and it still believes in the market.
“Konica Minolta believes in and commits to the print market – that is one of the reasons for our continuous investment. Especially marketing print market remains important and furthermore the digital printing opportunities are increasing,” he says.
Ergo was founded by Cora in 2004 and now has a rapidly growing reach across the region in China, Hong Kong, Taiwan, India, Indonesia, the Philippines, Singapore, Malaysia, Thailand, Vietnam and New Zealand.
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