ANDREW TRIBUTE
A View from the Top
Jürgen Rautert started his career with Heidelberg as a 31-year-old
engineer and within months led the company's vital Speedmaster 52
project. In a recent Print Week article, Rautert discusses Heidelberg’s
initiatives with digital, Anicolor and large-format presses.
Heidelberg is always one of the most important companies to track in the printing industry, particularly
so during the current worldwide economic slowdown. In April, the magazine Print Week, based in the
United Kingdom, and its sister German publication,
Druck&Medien, published what I believe to be a very
significant interview with Jürgen Rautert, Heidelberg’s
second in command – and one of just four executives
who sit on the company’s management board.
Within this piece, I am extrapolating on some of the
key messages to come from Rautert’s discussion with
Print Week which provides insight into the future of the
world’s largest press manufacturer and ultimately the
direction of printing during this crucial business environment, in which we have seen the major press manufacturers signal significant operating cutbacks.
Service and consumables
Rautert clearly places a major emphasis on substantially
to increase the percentage of revenue that will come in
future from the company’s service and consumables business. He indicated, that over the past 20 years, Heidelberg
has installed between 230,000 and 240,000 press units,
and that of all the presses sold in the past three years almost all are covered by full Heidelberg service contracts.
For its machines that are seven or more years old, meanwhile, very few are operating under a service contract.
In the consumables area, Rautert indicated that Heidelberg’s worldwide share of the press consumables
market is currently just three percent. This of course
excludes paper, which is a market Heidelberg would not
operate in. In some markets the company’s share of
press consumables is much higher, particularly in
Canada, where Heidelberg generates 50 percent of its
revenues from consumables and the other half from
press sales. Heidelberg Canada has approximately 30
market share for most of the consumables it distributes
in the country.
Over a 7-year period, Rautert explains in Print Week
that a typical €2-million, 10-unit perfecting press,
which averages 35-million impressions per year, would
consume materials of between €1- to 2-million in
plates, €500,000 in rollers, blanket, dampening solution
and other items, and €400,000 in service. In other
words, over the press’ lifetime, a printer will spend a
multiple value of the press in consumables – not including paper. (This is, of course, a model most easily
seen in the late 1990s as applied by makers of CTP engines and plates.)
Rautert states that obtaining the extra margin through
selling service and consumables is a very tempting business. One can, therefore, see that Heidelberg plans to
follow the digital press business in building a whole
new “annuity business” operation. Rautert projects that
in a decade half of Heidelberg’s revenues will come
from consumables and service. This is not to say that
Heidelberg plans to reduce dependence upon sales of
offset presses.
Press sales standing
Despite slumping press sales since October of last year,
Rautert surprisingly stated that the launch of the VLF
XL presses has been successful in reaching the company’s goals of 25 percent of the market for new installations. It is understood that this is for sales of in excess
of 18 VLF presses predominantly into packaging with
one commercial printer installation and the first VLF
perfector to go to the market soon. In terms of its other
press lines, Heidelberg’s Speedmaster 52 Anicolor is
now obtaining a third of the company’s A3/B3 business.
(The Printing House, based in Toronto, was Canada’s
first printer to run the Anicolor machine.)
In relating to this small-format market, Rautert indicated that a article I had recently written looking at
press sales (based upon Hewlett Packard estimated
numbers) deviated from Heidelberg’s data by a factor of
two, potentially showing their sales in the small press
area were more successful that my article showed. (
Tribute’s HP-focused article, Digital and Offset Press Trends,
appears in PrintAction, April 2009). He interestingly indicated that Anicolor technology will move to Heidelberg’s larger format presses – a point he was not
prepared to commit to at drupa last year.
Prinected Printers
One of the key areas of the printing business for the future of Heidelberg is workflow. Rautert referred to the
future as belonging to “Prinected Printers,” meaning
those companies that running their business via a comprehensive integrated workflow covering the company’s
total operations. He stated, “The information age and
the change in customers’ expectations regarding delivery times and transparency is something we have been
preaching since drupa 2000 – that the only one that is
going to survive long term is the totally integrated print
shop with integrated workflow solutions.”
In this statement, Rautert and I are reading from the
same hymn sheet (if you recall another recent article, I
commented at drupa 2008 that Heidelberg’s Prinect
