Will Heidelberg’s big gamble pay off?

Plenz explained that Heidelberg separates the digital market into five segments: office printers (largely irrelevant from a graphic arts point-of-view); entry-level machines in the 60ppm realm (also more relevant for the office, said Plenz, along with some tasks such as proofing); value devices producing 80-90ppm (such as the C901 of global partner Ricoh and the Bizhub C8000 of local ally Konica); higher quality performance machines such as the HP Indigo 7000 and Xerox iGen4 in the 120ppm bracket; and high-volume inkjet products rated at more than 250ppm.

While Heidelberg already has a finger in the inkjet pie through its LinoPrint venture, this is very much a niche business and not a fit for the majority of Heidel­berg’s customers in the commercial print space. Plenz freely admitted that when the offset giant first began revisiting digital, expectations automatically gravitated towards that ‘performance’ space.

“It seemed obvious that these perform­ance machines have the biggest footprint in our market and they produce most of the stuff, so we have to go for that,” he said. But when Heidelberg went back to the drawing board and analysed the short-run work mix of its core customers, a different picture emerged (more later).

Heidelberg isn’t alone in its desire to capitalise on the digital opportunity, and competitors have also been busy. Of the German ‘big three’ – Heidelberg, Manroland and KBA – it was Manroland that was first out of the starting blocks with a revamped 21st-century digital offering, announcing a partnership with Océ for high-volume inkjet in December.

The Manroland model

Manroland also tried and failed with digital before (see box), so the Océ deal attracted lots of attention. As part of the agreement, Manroland will sell Océ’s high-speed continuous-feed Color­Stream and JetStream systems. In return Océ will gain access to Manroland’s know-how. And, of course, its client base. While some have questioned what’s in this for Manroland, managing director Steve Dunwell said the deal was “a logical partnership” that was “important for the strategic goals of Manroland Australasia”.

“It’s certainly something we’ll look at getting our teeth into in Australia in 2011,” he said when the deal was announced last year. “We’ll start looking at our customer base and see how it fits in with their needs.”

Manroland global chief executive Gerd Finkbeiner has set a target of €100m for the new digital offering in the next three-to-four years. And Robert Weiss, head of technology and business development at the group, believes the market is much more open to digital now than it was a decade ago when Manroland teamed up with Xeikon. “The total cost of ownership is completely different to toner 10 years ago – and today. The higher productivity of inkjet and lower cost is a major difference. We want to combine the best from both partners.”

KBA’s approach

Meanwhile, over at KBA, the digital picture is still somewhat murky. When the manufacturer announced plans to diversify into new business areas some 14 months ago, digital printing was one of the opportunities mentioned. In a recent presentation to financial analysts, KBA specifically highlighted inkjet printing as having the best prospects in terms of performance and flexibility, perhaps providing some clues about where its attention may be focused.

Director of marketing and corporate communications Klaus Schmidt provided an update on the current state-of-play: “KBA is still interested in entering the digital field and is in ongoing negotiations with a potential partner. However, our plans are not only limited to a sales-and-service agreement with an established digital press supplier.

“We think margins and profits in such a sales-and-service-only partnership will be lower for our colleagues in Heidelberg and Augsburg since the big brands already have global sales and service networks.”

Schmidt hoped KBA could reveal more about its own plans “in the near future”, while admitting “unfortunately negotiations of this kind take longer than originally expected”.

Which brings us back to Heidelberg. The firm has defined its digital strategy after taking a range of typical short-run job mixes from its customers, then calculating the print costs via different methods (various digital presses, SM 52 Anicolor, regular offset etc), and this is the result of its computations: “It’s exactly between 200 and 500 pieces where the break even is. Everything above 500, you pay less money at a printshop if it’s printed sheetfed offset, which is obvious,” said Plenz.

“And now this question comes into play: if 250 is the break even for Anicolor, how many of these digital jobs really require the higher quality of that performance digital device? Maybe the photobooks, but that’s about it.”

So before Heidelberg had revealed that its would partner with up-and-coming production digital player Ricoh, Plenz was clear what the Heidelberg solution would look like. He explained the offering would be integrated into its Prinect workflow, with a digital device from the ‘value’ 80-90ppm segment and a price point of €100,000 ($135,000) to handle ultra-short runs and variable work, an Anicolor sheetfed offset press, and what can be described as a ‘job gate’ featuring smart software that will divert incoming jobs to the most appropriate printing device. The digital device will incorporate Heidelberg’s colour management know-how for enhanced quality and consistency.

“For me, there is no doubt this will be the solution for the future and this will change the digital industry because the argument for that performance digital segment disappears,” Plenz asserted.
He also highlighted opportunities at the other end of the short-run spectrum using web-to-print, whereby jobs are ganged up on, say, a VLF offset press.

“If you go to the big web-to-print shops printing in very large formats, down to runs of 50pp, they are always cheaper than digital printing,” said Plenz.

Of course, lots of Heidelberg’s customers are also already users of kit from the likes of HP and Xerox – on average of 70% have existing digital kit. But Plenz didn’t see this as disadvantage. In fact, the vendor’s number one targets are those firms running more than two performance digital machines. “Not many of them are really happy and have really fallen in love with these machines. And the click-charge model where you have to print a lot just to get a good rate with your supplier is too expensive. You should ask ‘how many of them are making money out of digital?’ There are some, with a really clever business model, but most of them paid more than they expected.”

The print industry in Europe will get its first taste of the Ricoh partnership when the two vendor demonstrate a linked-up digital-offset workflow at the Digi:Media show in Düsseldorf in April. Meanwhile, Heidelberg Australia and New Zealand says it has been two digital presses a month since signing up with Konica. But this is only the beginning, said Plenz.

“We will work together with somebody where we will influence the product for the future. And we will find more syner­gies for the future from both directions. That’s why we searched for a partner who was willing to open their R&D and test lab to us. And, on the other side, we will reveal to them what we have already done in inkjet with Linoprint and what we know about colour management and integrating workflows.”

On a final note, Ricoh’s tech portfolio extends beyond the ‘value’ arena thanks to its ownership of InfoPrint. What could this mean? Only time will tell what killer tech these offset, toner and inkjet R&D brains can dream up. Roll on Drupa 2012.

The big three digital ambitions

Heidelberg

Got into direct imaging in the early ’90s and subsequently developed the technology with the Quickmaster DI, and into the B2 format with the Speedmaster 74 DI. It stopped making DI presses in 2006, shifting its focus to highly automated conventional models. In terms of ‘true digital’, it entered the market with the NexPress (a joint venture with Kodak) at Drupa 2000 but sales failed to live up to expectations and Heidelberg exited the partnership four years later.

Manroland

Unveiled its revolutionary DICOweb commercial web press, with rewriteable plate cylinders, at Drupa 2000. But the technology was too far ahead of its time to be viable. Manroland also acquired Agfa’s digital press division in 2000, which brought the Xeikon-engined DICOpress range into its portfolio. The deal foundered in 2003, a year after Xeikon went bust and was bought by Punch Graphix.

KBA

Had a joint venture with Scitex in the 1990s to produce the 74 Karat B2 direct imaging press, and took over the whole venture in 2001 after the Creo-Scitex merger. Sales for the smaller format 46 Karat, based on the Ryobi engine, were taken over by AB Dick and subsequently Presstek. KBA stills sells the 74 Karat, albeit in small quantities, and some of the know-how from the press has been incorporated into its Genius UV offset machine.

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