The freedom of MAN– magazine article
On a recent visit to introduce the new MAN Roland delegate to Australia, Ditmar Zutt, he gave Patrick Howard an update on the first 12 months of being master of his own destiny.
At one stage Gerd Finkbeiner imagined the only way he could raise the status of MAN Roland within the press manufacturer's parent MAN Group, would be to manufacture a press on wheels - such was the focus of the German conglomerate on its diesel truck and bus business to the detriment of the world's second largest press manufacturer. Decisions on raising capital, on plans for expansion, or new ventures in R&D, were all marginalised as being non-core activities, creating intense frustration among the company's management as they saw rivals strike out in their own best corporate interest. MAN Group directors even floated rumours concerning the possible disposal of the sheetfed manufacturing operations, again to the frustration of its executives and the delight of rivals.
Then in March 2006, MAN Roland announced it was to become a stand-alone company with private equity company, Allianz Capital Partners, taking 65 percent of ownership while MAN Group retained the other 35 percent. For Finkbeiner, who continues as chairman of the independent company, it was the ideal scenario. The plan is to grow and develop MAN Roland with a single-minded concentration to the stage where it will be floated as a public company on the stock exchange in several years time. Within the normal constraints of business discretion, MAN Roland is now free to take control of its own destiny and forge its own future.
The new MAN Roland team in Australia; Gerd Finkbeiner, chairman( left) and Ditmar Zutt, delegate (right) with Peter Wilton, managing director of MAN Ferrostaal, the company's agent in the region.
The first year results appear to vindicate the decision to cut the company free, with an 18 percent lift in sales and an 83 percent surge in EBIT (earnings before income tax). Order intake is also up two percent and sales rose by 11 percent. Stringent cost cutting and consolidation of manufacturing plants, in addition to a re-negotiated contract with the notoriously tough-minded German unions has resulted in a leaner enterprise. The intention is to develop the core printing press manufacturing while leveraging the press control and networking systems which, along with its own developed electronics, are a traditional strength of the company.
On his recent visit to Australia, the chairman appeared to rule out acquisition and takeovers as a means of growing the company. He also distanced the company from any talk of following the Heidelberg lead into developing prepress and finishing equipment. These are very different types of engineering and manufacturing activities that require different skills and development, he said.
Money, market share and technology
There is a strong expectation within the press manufacturing industry that some solid consolidation is inevitable in the near future. The autonomy now conferred on MAN Roland makes it a viable player that can fight its own corner in any shakeout.
"We are in a strong position to play an active role in the forthcoming industry consolidation," commented Finkbeiner in his first annual report in March.
As the leading web press manufacturer in the world, MAN Roland holds an almost unassailable market share in the sector and continues to drive the format sizes. The latest iteration of the benchmark heatset Lithoman has a maximum web width of 2.25 metres - printing 80 pages with every turn of the cylinder. (This is the next step up from the four Lithomans that PMP bought at last drupa which, at 64 pages, were the largest available at the time.) News Limited expressed its confidence in MAN Roland's future with an AUD $524 million order to re-equip its UK newspaper sites.
In the past year, MAN Roland increased its web press sales by 25 percent to AUD $1.822 billion and its order intake by seven percent to $1.5 billion. From this it is claiming an operating profit of $133 million, up by 37 percent. In comparison, its sheetfed division had sales of $1.5 billion, (+11 percent), order intake of $1.55 billion (+2 percent) for an operating profit of $60 million (more than 100 percent increase). In the jealous rankings that define the three German press manufacturers - Heidelberg, MAN Roland and KBA - this consolidates the company in second place.
While the company leads the way in web presses, it recognises it has some ground to make up in sheetfed. Once a more vibrant contender, it has struggled in recent years to bring out the next generation of presses. Now with a declared goal to win 25 percent market share in sheetfed, it has rolled out a new generation of its iconic 700 presses - the Roland 700 HiPrint for mainstream commercial print and the Roland 700 DirectDrive, which is slashing make-ready times for printers who need to turn over jobs very quickly. According to Finkbeiner, this new generation of presses will contribute strongly towards the overall goal.
"DirectDrive is a quantum leap in efficiency, delivering over 60 percent increase in productivity. As I said at our recent sales conference in Augsburg, I believe we have never been in a better position product-wise," he said.
MAN Roland sheetfed presses have always been highly spec'd, automated engines, aimed at the sophisticated printing market, with a price tag to match. While this has gained for the company a reputation for advanced technology, it has also cost it sales in many sectors of the commercial printing market. There is a recognition that the newly flexible ownership may move to address this while maintaining the brand's strengths.
By the same token, MAN Roland is a major contender for dominance in the high-end, large format, heavily automated packaging offset market. Its highly developed process controls and extra wide format in the 900 series has carved a reputation in this sector and its reliance on CIM suits the manufacturing mindset of the industry.
A changing industry response
To survive and thrive as an offset press manufacturer, MAN Roland has to have a clear growth path centred on its core activities. With sales orders running into the millions of dollars it is no longer enough for press manufacturers to simply deliver the hardware. Customers are increasingly looking for partnering in the whole cycle of implementation, operation and business development. MAN Roland has a long history in designing entire press halls to house its equipment, especially in the newspaper sector. This entire area of print consulting - planning, design and process optimisation - is now regarded as one of four key elements in the future of the company.
Networking and computer integrated manufacturing is another strength. An early pioneer in workflow development, MAN Roland has the ability and the technology to bring manufacturing systems to bear on the printing process. Another dimension is what the company refers to as print services, which involves life cycle management, giving investors certainty in the overall costs of the press throughout its life, including agreed trade-in values, while supplying such ongoing services as training, maintenance, upgrades and stores.
MAN Roland is also moving into merchandising its own brand of press consumables; blankets, washing and dampening solutions, inks, rollers and lubricants. While these are already on the market in Europe and the USA, they have yet to become available in the local market. During Finkbeiner's recent visit here he began negotiation with the agent, MAN Ferrostaal, about the possibility of establishing a distribution channel.
Still sometimes calls Australia home
By his own reckoning, Gerd Finkbeiner has made 50 trips to Australia over the past 23 years. He is almost apologetic for having other more pressing matters on his mind during the past couple of years, preventing him from making the trip. He is well-known throughout the industry, especially in the newspaper and web printing sectors. As an engineer he was involved with almost every major MAN Roland web press installation here for years. He is responsible in no small way for Australia, with more than 70 of the company's coldset and heatset web presses, being one of MAN Roland's strongest markets. His knowledge of the local market is second to none and he is conscious of the two-way street that such a partnership entails.
"The Australian market has always been very technologically demanding. There is an expectation here that suppliers will go the extra mile but in my experience [the expectation] has always been for good reasons. We have learned a lot from meeting our customers' requirements in this market. Their suggestions and requirements often lead to press developments," he said.
The company's regard for the importance of the local market is obvious in the permanent posting of a company delegate, Ditmar Zutt, to the region. Another well-known MAN Roland identity, he has been involved in most of the recent high-profile installations and contracts. He will be working out of Sydney and lending valuable support to the two front-line representatives, John Hansen for sheetfed and John Ostler for web presses. His arrival here signifies a new determination by MAN Roland to be a player in every deal going down.
Zutt's direct access to personnel at headquarters in Frankfurt enures customers in Australia and New Zealand will have confidence their issues and concerns are addressed at the highest level. He is focused on the concept of delivering added value to the customers through networking and workflow integration as well as in-line processes.
Although it may appear that press manufacturers are in a single-minded battle for technology supremacy, there is only so much that equipment can do. In reflecting on his decision to strengthen MAN Roland's face-to-face representation here by appointing a company delegate, Gerd Finkbeiner reveals the underpinning of his own philosophy.
"Business is a partnership between people, success relies on that. Technology is not everything," he said.
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