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manroland goes under citing sheetfed press market collapse

Sunday, 27 November 2011
By Print 21 Online Article

World’s 3rd largest offset press manufacturer has filed for insolvency as a result of the failure of a ‘white knight’ investor to engage and a refusal of major shareholder Allianz to put in more money.

One of the troika of major German press manufacturers, along with Heidelberg and KBA, manroland blames its failure on a dramatic collapse of orders, especially in sheetfed presses. The downturn, which is ongoing since the beginning of the GGFC, became critical in mid-July and has accelerated since then.

However, the company has haemorrhaged cash for years as the offset market shrank under pressure from digital print technology and the decline of printing volumes as a whole. In the lead up to the crisis its survival depended on an unnamed investor. According to a company press release the negotiations failed on the home stretch.

manroland claims its potential market is now half the size it was before the financial crisis of 2008. Fierce price competition from rivals for the remaining business has made margins wafer thin. The difficulty of major customers accessing finance is cited as a defining factor in the failure, with even the buoyant Chinese business slowing in recent months.

manroland hopes to rescue some divisions if it is allowed to continue to operate as debtor in possession. It has filed a request for self-administration in order to finalise ongoing restructuring.

It has unparalleled marketshare in web presses, having recently inked two major deals in Australia with IPMG and PMP. The only serious rival in that market, Goss, itself spent many years operating insolvent under USA Chapter 11.

manroland is headquartered in Augsberg, employing 6,500 personnel, 5,000 of whom are in Germany.

manroland in Australia re-established a stand-alone office two years ago under Steve Dunwell. It has scored considerable successes in revitalising the brand in the local market. Dunwell was unavailable for comment as this news was posted.

The parlous situation of the three German press manufacturers has defied rationalisation for years. Major manroland shareholder, insurance company Alliance, successfully floated Heidelberg on the stock market within the past decade while keeping a strategic stake. It obviously hoped to do the same with manroland, buying the majority stake from the MAN Group. A merger between Heidelberg and manroland was attempted two years ago but floundered on German provincial rivalries.

Shares in Heidelberg and KBA rose on the news of manroland’s misfortune as investors hope its rivals will pick up some extra business.

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