Vels Jensen (pictured), currently on a trip to Bangkok to meet with executives from both the Asia-Pacific region and the company’s headquarters in Germany, told ProPrint that HAN had already made significant inroads into restructuring plans to shore up the company against an economic downturn.
“Three months ago we had a review of operations, after drupa, and on the feedback we got from the market. Too many of our orders were soft and some of them didn’t fly. We had machines on the way — some 16 or 18 million dollars worth of machines — that we could see were not going to fly,” Vels Jensen said.
“We had a hunch. It started late last year in New Zealand, which normally is a good indicator of good and bad things that will happen. That’s what I’ve seen over the years, and on that basis we had a feeling that things were not right. By the end of July we decided to make some changes and I knew we were not going hit the numbers that we committed to for this year.
“We could also see that we would have to pull back from the numbers we had forecast for the next fiscal year … so I gave them [Heidelberg HQ] $3 million in cost savings, and of that $3 million approximately 40 per cent came out of buildings and offices. That is basically what we have done in Perth, Brisbane and Auckland, and what we intend doing in Sydney next year when we can get out of our lease on Waterloo, which we’re stuck with until the end of next year. By moving I can save about $950,000 a year.”
There have been several staff changes at HAN in the last three months, according to Vels Jensen.
“We’ve reduced staff in the back office,” he continued. “We’ve gone from 265 staff to 245, and we had other areas where we curtailed costs, providing $3 million in cost savings overall.
“We were one of the first units of Heidelberg worldwide to do these things. There’s no reason for us to do anything further just now unless I’m told to. Of the 245 staff we have now in ANZ, 170 are working in the service area of the business, so if I have to do any additional cuts, we’re as lean as we can be without having to change the business model.”
The impact on PacPrint
Downward-trending economic circumstances have also generated speculation that the industry is not in a position to hold PacPrint next year. There have been suggestions by several industry suppliers and vendors to cancel PacPrint ‘09 or postpone it by a year, but Vels Jensen is opposed to such a move.
“It doesn’t help if you postpone it a year because all you’re going to do is put it into an Ipex year, and if you postpone it two years you just put it into a PrintEx year, and two shows in Australia in one year makes no sense, so what was actually being suggested was a cancellation. I think a cancellation is out of the question … [it’s] not something I would entertain.
“But these are drastic times, and maybe drastic measures are required. Maybe we need to have a relook at what we do at PacPrint because people are not looking at heavy metal; instead they’re looking for guidance and support from industry suppliers as to how they can reduce their costs, how they can be more efficient and productive, how they can find better ways of manufacturing with lean manufacturing principles.
“If we can start educating them and helping them in order to run a better business, maybe that’s what we should be looking at: promoting the industry to the outside world, to the public at large. Should we instead be looking at green, environmentally-friendly printing, what can be done … how much can you reduce your carbon footprint? Maybe we should be attacking these rather than spending a hell of a lot of dollars putting equipment on the floor that people don’t want to buy anyway.”
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