High German costs ends most Heidelberg postpress

Muller Martini to take over service for discontinued lines as Heidelberg closes its Leipzig factory and sources equipment from Chinese manufacturer, Masterwork Machinery.

In-house production at the Heidelberg sites in Germany is deemed to be no longer competitive under the new market conditions. The relevant operations are therefore being discontinued, except for production of folding machines at the Ludwigsburg site.

The closure of the Leipzig manufacturing site and a corresponding reduction in the workforce at the Ludwigsburg and Wiesloch-Walldorf will result in the loss of 650 jobs worldwide .

Postpress packaging products and solutions will in future be developed and manufactured by the new Chinese OEM partner Masterwork Machinery Co., Ltd, with Heidelberg retaining responsibility for sales and service activities.

In the postpress commercial business area, Heidelberg will only continue to market the established folding machines and cutters. Swiss company Müller Martini will take over service activities for installed equipment from discontinued series. These measures will not affect business with Polar cutters and Heidelberg folding machines.

"We were able to win two renowned suppliers as partners for our realigned postpress portfolio," said Stephan Plenz, Member of the Board, Heidelberg Equipment. "They will help us provide our customers with competitive products and ensure continuity in services and service parts."

Getting out of manufacturing postpress is estimated to save Heidelberg EUR 30 million annually, largely taking effect from next financial year, as the company ploughs towards its target of eight percent margin by 2016. The Heidelberg brand will still attach to the Chinese manufactured equipment in the packaging sector.

The closure comes 19 years after Heidelberg first entered postpress production with the purchase of Sheridan in the USA. At the time the move caused a split with its long-term finishing partner, Muller Martini, which has maintained a separate presence in the local market ever since.

The two companies became fierce competitors, especially in the saddlestitching sector, with Heidelberg gaining more 30 installations over the years. It enjoyed less success with perfect binders. Under the new arrangements these customers will now presumably be serviced by Muller Martini.

According to Roman Beeler, managing director, Muller Martini Australia, there has been no word from Europe yet, but he is confident of being able to deliver whatever equipment service is required.

Muller Martini and Japanese-based Osako, supplied by Ferrostaal, are the two notable manufacturers of saddlestitchers remaining.