Graphic Repro Online follows the manroland trail

No one does it better than Mike Hilton, publisher of the SA graphic arts industry weekly news report. Here is Mike's introductory email. Read it and sign up for his regular reports.


I have probably spent, unsurprisingly, a disproportionate amount of time keeping up with developments in the Manroland insolvency situation in the German business and regional press this week. Unfortunately, there has been no quick and easy solution as yet, and nor is there likely to be any sort of quick-fix - sadly. The impression I get thus far, is that it might end up as a drawn-out and messy business. I sincerely hope not.

Capvis, the Swiss private equity firm which had been in discussion with Manroland since September, came forward last Sunday as the potential investor which pulled out of talks last week, in a move which helped push the ailing press manufacturer into filing for insolvency. In one report in the German press, it denied that discussions had reached 'the final straight' before becoming deadlocked. Perhaps it is a blessing in disguise, because the only really good investors in major manufacturers in our industry - generally speaking and based on history - are 'parents' with a truly long term interest in the industry - and not those who might expect short-term gains.

Over the weekend, crisis talks were held in Augsburg with the Mayor and Alliance for Work. These were followed on Monday by meetings with the Bavarian Economics Minister, Martin Zeil. Two things came out of these meetings: firstly, that the employees, who had been paid up until the end of October by Manroland, would now be paid in the form of insolvency payments for November, December and January. Secondly, that there would be no State financial rescue package at this stage, as this was only the beginning. The Economics Minister made it very clear that it was the responsibility of the shareholders - Allianz Capital Partners and MAN - for the future of the company. This also applied in the other States where the Offenbach and Plauenplants reside. One offer was made on Wednesday, in that MAN in Munich has offered to take over the 200 trainees from Augsburg for its Diesel and Turbo division. I am unsure as to whether this is a legal or 'moral' obligation, but it's a nice gesture, even if it might have selfish undertones. Also on Wednesday, the SPD Bundestag deputies at the three Manroland sites asked for Federal Government support for the company and its employees, in a letter sent to Chancellor Angela Merkel.

According to the insolvency administrator, Werner Schneider, there is interest and there are prospects for the company and discussions with potential investors will commence next week. He also said that it was becoming increasingly clear that the company could not be retained as a whole group, and a break-up was looking likely and more promising, as the search for investors continues. He also warned in an article in the Augsburger Allgemeine newspaper on Wednesday, that 'we are not magicians' and that even with his staff of 20 specialists working on the problem, it will take time. 'It's scary how high the expectations are,' said Schneider in an interview with the newspaper on Tuesday. Gerd Finkbeiner is still in control, at least for now, and is reported to be working tirelessly to find a solution to take the company forward. Neither KBA nor Heidelberg are interested, according to numerous reports, especially since the commercial and newspaper web markets are currently suffering a decline in sales of around 60%, and both companies have more than sufficient sheetfed manufacturing capacity, which is also under pressure with lack of sales due to financing restrictions for many customers and the economic climate in general.

None of the above, of course, includes the knock-on effect to Manroland's unpaid suppliers such as Technotrans, for example, which has been hit particularly hard with the insolvency expected to affect its results by as much as 2 million euros in the current financial year, and there must be countless others, too. An article in the Augsburger Allgemeiner on Thursday raised this very issue, and the Chambers' of Crafts and Commerce (HWK and CCI) are apparently working hard to identify affected firms in order to determine the impact - but that is only taking Regional interest into account - and the much wider impact may not emerge for quite some time. There is still a search for financing, so that the company could then at least continue to trade and complete its orders, and supply and provide support for its customers who have presses that must be kept running, and where the prospect of downtime for lack of available spares or lack of support would be an absolute nightmare.

As for the remainder of the news this week: there hasn't been all that much, so it will be easy for you to scroll down and browse through the rather good selection I've chosen for you. Amidst all the newspaper doom and gloom predictions that have been sparked by the insolvency of Manroland in the German press, including some articles from journalists who don't appear to have much of a clue about our industry, please take time to read a really short breath of fresh air which led Thursday's headlines, as Richard Desmond kick-started his 100 million pound investment in the future of the newspaper at his new headquarters in Luton, in the UK. KBA must be very happy. And please also don't miss Andreas Weber on Thursday, with his article 'After the collapse is before the upturn', where he provides an analysis of recent events at Manroland - and should you need a reminder, Andreas is one of our industry's most respected analysts and trade press editors based in Mainz, Germany. There's also a full version in Online Features which is a 'must read'. Lastly, on Friday you will find a statement from Frank van Dijk, CEO and chairman of Manroland Southern Africa to round off the week.

And on a totally different subject: See the Kodak Flexcel-related article from Repro Busek in Online Features. Kodak also leads Friday's headlines with its latest amazing Prosper Inkjet triple success in Japan. And the tailender for this week: just don't miss the latest issue of Heidelberg News No 272 in Monday's headlines, as it really is a superb edition - and it's free of charge, either online or to order in printed form.

Until next week, when I hope to have some positive developments to report.

My best regards,

Mike Hilton
<http://www.graphicrepro.co.za>