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The Last Supper – Looking forward to the new normal

Tuesday, 15 December 2009
By Print 21 Online Article

Sober reflections on the state of the industry as Heidelberg moves out of its 20-year Sydney showroom for new premises in Lidcombe. Patrick Howard reports on the long afternoon farewell.

There will be little significant improvement in capital investment in the local industry until at last 2011, according to Andy Vels Jensen, CEO, Heidelberg Australia and NZ (HAN). At a defiantly upbeat gathering of the company’s major Sydney clients in the old Waterloo showroom, he forecast that in the years ahead we are all going to have to get used to a new definition of normality.

“It’s been a tough year and for my part I’m glad to see the back of it. I believe we at Heidelberg both here and in head office have had to become better and smarter at what we do. And I’m confident we’ve done that,’ he said.
The global financial crisis has put an end to the boom in printing capital equipment in Australia and NZ. Over the past eight years HAN installed 2,300 Speedmaster printing units, an average of 280+ per year. This was by far the lion’s share of the market – according to the ABS only 3,500 came into the country during the period. But that was then and this is now and Vels Jensen predicts the ‘new normal,’ when it arrives, will be 15 to 20% less than that.

During the same good times there were 510 Stahl folders, 180 CTP engines and 60 stitchers installed. These sectors have not suffered quite the same downturn as presses with some investment still going on.

Consumables is good business

In the light of the new realities Vels Jensen is grateful to the HAN customers who have signed on for the company’s service and consumables contracts. HAN is the world leader for Heidelberg in the amount of service it has under contract, while its consumables business has grown 350% in recent times.
[This is set to rise dramatically with the announcement of HAN’s exclusive Kodak agency.]
In the face of the present tough conditions HAN has mostly maintained its service numbers, still fielding over 160 engineers. Cost savings of $9million will become completely effective next year.

The same the whole world over

In a typically wide-ranging survey Vels Jensen filled in the Heidelberg world picture. For HAN the Southern region is showing signs of life, making 85% of target for the full year, easily outperforming its Northern counterpart and certainly New Zealand.

In a telling statistic he said that every third press of any size that rolls off the Heidelberg production lines is now destined for China. The USA printing capital market is a real challenge, along with the rest of the economy, while Canada and South America are tracking on target; Europe is 15 to 20% down while HAN is tracking with the UK around 12-13% below target. Japan is also down.

Addressing the almost by now perennial question of the Heidelberg, manroland merger, he pointed out that Heidelberg as a public company is more constrained in placing its interpretation of events before the public. However he drew attention to the German business media where the matter is still very much alive.

“When people ask me, my answer is that officially it’s off,” said Vels Jensen.
Unlike the possible re-entry of HAN into digital printing sales and service, but that is another story for another time.

Meanwhile, welcome to the future – the ‘new normal.’

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