Heidelberg is pulling out of finishing to cut costs – dumping all but one of its product lines, closing its Leipzig factory, and slashing 650 jobs.
The world’s biggest press manufacturer will ‘restructure’ its folding equipment business, retaining its Stahlfolder line manufacturing business, and kick everything else to the kerb in a move the company says will save it €30m a year.
It will no longer manufacture saddlestitchers or perfect binders, and much of its packaging finishing lines such as Diana will now be manufactured in China. It will continue to supply Polar guillotines.
Heidelberg will distribute packaging finishing from Chinese manufacturer Masterwork Machinery, claiming it will provide ‘improved competitiveness.’
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Swiss finishing manufacturer Müller Martini – which was Heidelberg’s finishing partner before the latter entered finishing in 1995 when it bought US manufacturer Sheridan – will take over the servicing of the discontinued Heidelberg products, which in Australia includes more than two dozen saddlestitchers.
Heidelberg chief executive Gerold Linzbach says in-house production at its sites in Germany is no longer competitive under ‘the new market conditions’.
“The competitiveness of postpress product lines at Heidelberg was limited, so these activities are being placed on an entirely new footing,” he says.
“Realigning these areas is an important step in improving the company's economic situation and getting closer to the target EBITDA margin of at least eight per cent by FY2015-16.”
Heidelberg Australia managing director Richard Timson says the decision is ‘disappointing’ because of the number of printers that use Heidelberg finishing products in Australia, and that it is a business decision made by Germany.
He says he is not yet sure exactly how Australian customers will be affected, including whether the arrangement with Müller Martini extends to Australia, but will know more in coming days.
We will have more news as it becomes available.
[Related: More Heidelberg news]
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