Heidelberg Clarifies Direction

HEIDELBERG, GERMANY—As part of its traditional year-end press conference in early December, Heidelberg senior executives used the occasion to better explain its recent announcements.

Those announcements had included the impending sale of its web systems business, an additional worldwide work force reduction of up to 1,000 employees (primarily in Europe) and the repositioning of its digital division. Instead, the company will concentrate on the more profitable sheetfed offset printing market and its related value chain.

Heidelberg Chairman Bernhard Schreier revealed that, by the end of Heidelberg's fiscal year in March of 2004, he expects the web division to be sold and a determination made public about Heidelberg's digital operations.

Schreier contends that the outlook for future commercial web offset press sales is particularly glum. "We are convinced that there will be quite a bit of consolidation (among both printers and suppliers) in the future due to overcapacity in the market," he said. "It's questionable how many web printing presses will be sold over the next three to five years."

Schreier added that, despite announcing in 1998 that Heidelberg "would conquer the world in the newspaper market" and debuting its Mainstream newspaper press in 2000, just 12 Mainstream news-paper presses have been installed worldwide. "We still have orders to be accomplished and will still sell the Mainstream. But we will not come out with new models, new formats, etc."

Ironically, it is widely believed that the most likely buyer of Heidelberg's web systems division is a company that once was a possible acquisition target of Heidelberg. Goss International—headed by Robert Brown, former president of Heidelberg Web Systems in Dover, NH—has been rumored to be the leading contender.

The ultimate future of Heidelberg's Rochester, NY-based NexPress division, which is a joint venture with Eastman Kodak, is less clear, however.

With Eastman Kodak's recent acquisition of Scitex Digital Printing, some industry watchers predict that Eastman Kodak may buy out all or part of Heidelberg's stake in NexPress, with Heidelberg continuing to maintain a sales and service role.

Citing the need to remain a player in digital printing on one hand, Schreier also pointed to the high development costs associated with its NexPress (color) and Digimaster (black-and-white) lines. "We cannot provide a broad line of digital equipment in the future on our own for production and development," he noted. "We will maintain all of our capabilities in selling and supporting our customers. But (regarding manufacturing and R&D), there will be more developments in other camps."

He stressed that Heidelberg will continue to support NexPress machines. However, with the growing market demand for digital color, Schreier questioned the future market potential for black-and-white devices.

He also attempted to ease any fears existing Heidelberg customers might have about the future of the company. "One message is very important: There will be few changes in the product portfolio today and in one year from now. We will still provide customers entire solutions; but not everything will be produced from Heidelberg. We will produce only what we can do best.

"We may have put production and engineering of (web and digital presses) in question, but not the products or sales and service," he added.

Heidelberg also used the occasion to showcase new enhancements to the Speedmaster 102 and CD 102 presses (see new products, page 54), which will debut at the Drupa exhibition in May.