The world’s largest printing press manufacturer, Heidelberger Druckmaschinen AG, has seen economic downturns before, but probably none quite like the current cycle. Consolidation, a high Euro, and Japanese competition are among the many obstacles facing one of the great companies of the printing industry.
As the number of printing companies continues to decline, Heidelberg finds itself selling to fewer customers. To compound the problem, those fewer clients are evaluating high-quality Japanese presses, like Ryobi, Komori, and Sakurai. To the dismay of Heidelberg, these presses provide comparable quality, at a much lower cost. The low dollar, combined with aggressive pricing by the Japanese manufacturers, has put Heidelberg in a disadvantageous position. No longer can Heidelberg count on their good name and high quality to sell their equipment. The global marketplace has found the printing press market, and Heidelberg is calculating how it will respond to the large issues it currently faces.
Will Heidelberg survive? This is a question no one would have asked 10 years ago. Heidelberg is the biggest name in offset printing; of course, GM was the biggest name in automobiles, right? There is one huge difference, however. Heidelberg has never suffered from quality issues, and they continue to produce the best printing equipment in the world in many respects. They will survive, in my opinion, but they will need to compete directly with the Japanese manufacturers in three areas: price, features and space.
In addition to benefiting from a lower exchange rate, the Japanese are continuing to increase quality and in most respects have reached the German manufacturer’s standard, even while producing equipment for less money. The Japanese presses tend to be more ‘feature rich’ than Heidelberg, in terms of electronics, and ‘whistles and bells’. And one area where Heidelberg isn’t competing at all? Space- the valuable square footage swallowed by a 20-100 ton press. Japan, not being a spacious country, has figured out how consolidate equipment size, producing products at 20-30% smaller sizes that do the same job.
As the global economy continues to sputter downward, it will be the ‘smart’ manufacturers who survive: those who first and foremost can weather the financial storm of the ensuing recession, and those who can produce a product everyone wants when the recession ends. This recession won’t determine the success or failure of Heidelberg; they’ll make it through this one. It will be the next recession that will determine their long-term viability as a flexible manufacturer in a global economy.
