German offset press makers take a fall

Heidelberg, KBA and manroland all downsize after drop in sales.

The global financial crisis has taken its toll on the three companies, which have each been plagued by a lack of orders and overall lack of enthusiasm from customers who are not willing to invest in new technology.

In a statement, Heidelberg listed print shops’ low capacity utilisation and the difficulty being experienced by the printers in securing bank loans as crucail factors.

Heidelberg sees no improvement in the short-term and plans to reduce capacities and structural costs even further. As a result, 5,000 jobs are expected to be cut.

Bernhard Schreier, (pictured) chief executive officer, sees the cost-cutting strategy as necessary in order to keep Heidelberg running smoothly.

“The global financial and economic crisis has continued to hit the mechanical engineering sector hard over recent months,” he said. “We have made the necessary structural adjustments to optimise our company’s earnings on a sustainable basis and ensure it is primed for the up-turn when it comes.”

In order to make these adjustments, from 30 June, Heidelberg will terminate its collective agreement on safeguarding the company’s future, which was last extended in October 2007.
“When we extended the agreement on safeguarding the company’s future two years ago, there was no way of predicting that the global economy would take such a dramatic downturn,” Schreier said.
“This is the only way we can ensure our competitiveness and efficiency.”

KBA chief falls on his sword

In a further dramatic indication of the parlous state of German offset press manufacturing, Albrecht Bolza-Schünemann, the dynastic CEO of KBA, abruptly resigned. The third largest and the oldest established press manufacturer, is reeling under substantial losses, especially from its sheetfed press division of more than AUD$347 million (€85m).

It reports that sales fell last year by 10.1 percent to AUD$2,954 million (€1,531m) and that future orders have shrunk even more, contracting by 19.7 percent.
In accepting Bolza-Schünemann’s resignation KBA chairman Dieter Rampl thanked him on behalf of management and staff for his many services to the company and the print media industry: “In a hostile economic climate such as this, when top managers’ sense of responsibility is a matter of heated public debate, we accept your decision with the greatest respect.”

Helge Hansen, CFO since February this year, has been appointed Bolza-Schünemann’s successor.

manroland puts its best spin forward

The second largest offset press manufacturer, manroland, put its results in the best possible light in February when it claimed that sales had only fell by 11 percent last year to (AUD$ 3332 million (€1,727m). However, forward orders declined by 21 percent, forecasting even more drastic falls in the year ahead.

Gerd Finkbeiner, Chairman of the Executive Board is under no illusions about whether the bottom has been reached, even as he put on the usual optimistic spin. ”The crucial challenges are yet to come. The package of measures we implemented in January 2009 to safeguard our future as well as our marketing campaign will make a big contribution to us coming out of the crisis stronger than before,” he said.

The measures already implemented included cutting 625 jobs and shutting the Mainhausen factory.

Commentary by Patrick Howard
We are witnessing a strategic reorganisation of the three most powerful press manufacturers in the world. The German press makers have provided the mainspring of the printing industry for centuries but it is unlikely they will ever be able to regain their primary importance after this realignment.

It would be unfair to single out the German industry in this global meltdown. The Japanese press manufacturers are similarly, if less publicly, experiencing a shut down of orders.

It seems obvious that there are fewer printing companies willing to invest in upgrading their equipment in the face of an uncertain economic future. At the same time the presses already in position are proving quite capable of extending their life by a number of years.

Even when the recession is over it is doubtful if there will be such a pent-up demand that the press giants will be able to return to anything like their former glory. Declining print volumes, the existence of fewer printing companies and the emergence of faster and cheaper digital presses that cost considerably less, will have shifted the goal posts.

We may well be living through the last days of offset’s dominance of the printing industry.