Bernhard Schreier, Heidelberg CEO, outlined the new direction to 44 journalists from 15 countries during a major press conference at Heidelberg headquarters earlier his week.
He says that weak economic conditions are expected to continue for several years and that, as a result, Heidelberg has to lean back and consider where it wants to go and wants to do in the future.
“We had to make a decision whether to continue as we have been, or whether we want to make a change,” says Schreier.
The decision was overwhelmingly for change. Aside from another 1000 job cuts, the major announcement was the Heidelberg’s focus would no longer be only straight production, but increasingly on sales, service and consultancy.
Schreier says, “Those who want to deal with only a manufacturer of equipment may not find Heidelberg the right address in the future. But if the customer wants to find the best integration into workflow, the he will only find Heidelberg as being the premier supplier.”
Part of the changes will see a further 1000 jobs cut on top of the 3200 already in progress.
In the digital arena, Schreier concedes that growth in high-end colour printing has not met expectations and he says that Heidelberg will not be able to finance a broad line of digital products on its own in the future.
“Production and development is no longer a focus in the digital area,” he says. “There will be more production and development resources in other camps and it’s a question which companies we can work with.”
Most of the focus in the digital area will come in sales, service and consultancy, as well as bringing the best solutions to the market, from the best vendors, Schreier says.
He says that the company’s primary goal in digital is to find a partner for production of all digital products. Although the company is working on it, Schreier says that there may not be an announcement on the new digital position before drupa.
Heidelberg will continue to support the NexPress, its joint venture with Eastman Kodak. However, Schreier says that the joint venture agreement foresees different scenarios if one or the other partners wants to pull back.
“We are talking about different scenarios and finding out the best way to go. We are sharing with Kodak our ideas,” says Schreier.
Schreier says that sheetfed will be the company’s main focus, but that doesn’t mean it will be at the expense of other products.
“Today, we are not able to provide all the products we want to provide. In one year, there will be more products in our portfolio than ever before, but they may not always be a production of Heidelberg,” he says.
The company reiterated its decision to withdraw from the production of web offset systems. Schreier says that the installed capacity of web would satisfy the market in the short term and it is questionable how many web presses would be installed in the next five years.
“We are absolutely convinced that over the next several years, there will be a lot of consolidation in web systems,” says Schreier.
In the commercial web sector, Schreier says that the company needs synergies from different companies in order to stay profitable.
He doesn’t see growth in newspapers either, although Heidelberg will continue to support customers in that field. It has installed 12 Mainstream presses since the product was launched at drupa 2000, but has not achieved the lofty goals it set in the sector.
Schreier says the company had prematurely predicted a grand entrance into the market. “Newspaper-wise, we had a big goal. In 1998, we said we were going to conquer the world. We had splendid ideas.”
Schreier says that Heidelberg is “thinking how forces can be combined to get out of low margin activities as they are today and make our business more profitable”.
He admits that the company is not fully loading its sheetfed production capacity, but says that any decision on cost cuts in this area will be delayed until drupa.
The decision to lay of 1000 staff is a painful one, coming on top of the earlier and larger scale job cuts. Salary cuts of ten per cent in Germany are available to prevent further job losses and Schreier says that these cuts will depend on the success of drupa.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter