Heidelberg's Dunn Talks GRAPH EXPO, Digital Future

Printing Impressions Editor-in-Chief Mark Michelson recently spoke with Jim Dunn, president of Heidelberg Americas, to discuss topics ranging from Heidelberg's future trade show participation to its role as the distributor of a digital press offering, to the current state of sheetfed offset press sales and the ability of printers to secure capital equipment financing.

PI: We understand that Marcel Kiessling, former president of Heidelberg Americas, has taken a new assignment in Germany. Has this impacted or broadened any of your job responsibilities?

DUNN: Marcel has returned to Germany to take a position on the Management Board of the group in which he will head up our Services Division. This change is very significant in that it formalizes all we have been working on for the past six years; achieving and maintaining that highest level of equipment performance is not only a function of design, engineering and manufacturing, but equally dependent on training, maintenance, consumable selection, workflow and performance monitoring.

As for more myself, I have the oversight responsibility for the Canadian and Mexican markets in addition to the U.S. business. Both of these countries have substantial differences to the U.S. market, but we are fortunate to have experienced and stable organizations in both markets led by Richard Armstrong in Canada and Harald Weimer in Mexico.

PI: Heidelberg USA made headlines recently when the company confirmed it was not planning to exhibit at this year's GRAPH EXPO show in Chicago, but is planning to participate in GRAPH EXPO 2011. What prompted this difficult decision?

DUNN: In reality, this decision was not taken recently. As I'm speaking with you, I am looking at an internal document from April 2005 in which we had concluded that our future participation in trade shows (around the world) would change. It would be focused on two actions: 1) we would focus on the four year rotation of the major trade shows: drupa, PRINT, Ipex and IGAS and 2) we would concentrate our efforts towards enhancing our existing Technology Centers to becoming the center for learning and development of equipment, system and processes.

We had decided to delay deploying this approach until after PRINT 09 and have communicated this plan to the Graphic Arts Show Company. Having said this, we are re-evaluating participation in the annual GRAPH EXPO show and may participate every other year. However, we would envision that our GRAPH EXPO presents would be more focused on systems and services rather than just equipment. But, we have quite some time before GRAPH EXPO 11 to make a final decision.

PI: Heidelberg will, however, take a large stand at Ipex in England this May. Among the products to be shown there are the Speedmaster SM 52 Anicolor press with a new coating unit and UV printing capabilities. Do you still see Anicolor technology as a viable alternative for short-run digital printing?

DUNN: Absolutely! We have seen great success with the Anicolor print systems around the world, and we see this platform more as a complement to digital rather than an alternative. The digital printing engines clearly fit the bill for variable printing and ultra-short-run static (under 200 sheets) jobs. However, we also see that many high-end digital devices (+95 ppm) are running non-variable, medium-run jobs. This is an expensive and inefficient method, where the Anicolor technology is a gold mine.

PI: There have been ongoing rumors that Heidelberg plans to get back into the digital press arena, either through acquisition or through some form of distribution agreement. Although I realize you cannot comment directly on rumors or any ongoing discussions that may be taking place, would this make good business sense for both Heidelberg and its customer base?

DUNN: We believe it does. As I said before, there is a strong market demand for print platforms suitable for variable and ultra-short-run jobs. There are many good systems on the market, both in the high- and mid-range production segments. Therefore, I do not see Heidelberg developing another new platform.

Most likely, we will look for existing platforms which we can bring to the market in a way that is enhanced by our Prinect workflow systems, color management systems, and integrated into our commercial and packaging postpress systems. It's a tall order, but we see strong demand for this type of integration.

PI: As the U.S. economy slowly crawls out of recession, have you seen any market improvement in sheetfed offset press sales? And, for those printers that may be considering a new press purchase, is difficulty in securing the needed financing still a problem for them?

DUNN: It's a split story—one for the commercial print market and one for the packaging market. The commercial market remains sluggish as print shipments have not yet begun to improve. According to the Federal Reserve Bank, commercial print remains at approximately 77 percent of the level of 2006. Securing financing is challenging for three reasons: 1) the banks have the "red flag" up on the printing industry, 2) used equipment values are very depressed and 3) many print shops are upside down on their existing equipment loans. Having said that, we have seen a number of very strong establishments take advantage of this situation by leveraging their stronger financial positions to leap frog the market and invest in new, peak performance presses. In doing so, they have a huge competitive advantage.

The packaging market is somewhat the exact opposite. The packaging market is growing in many sectors, and is also being "rediscovered" by the marketing and brand management professionals as a great return on marketing spend. The success of our entire XL platform, from 29˝ to 64˝ in the packaging sector gives us a solid view of the strength of this segment. We are particularly pleased with the success of our VLF (very large format) presses, which have recorded 30 orders since its introduction at drupa 08. In just 18 months, we have gone from a non-participant in this format, to becoming a market leader.