Heidelberg to axe finishing

Heidelberg is ditching the majority of its postpress portfolio, exiting the saddlestitching and perfect binding markets completely, and transferring responsibility for some products and solutions to China.

The German giant assures customers that these measures will not affect business with Polar cutters which it will continue to supply, and Heidelberg folding machines which it will continue to manufacture.

Packaging post-press solutions such as the Diana folder-gluer will be manufactured by Chinese OEM partner Masterwork Machinery, with Heidelberg continuing with sales and service of this kit.

Müller Martini is slated to take over service support for the discontinued finishing solutions, although Heidelberg ANZ managing director Richard Timson says conversations with head office over the next 48 hours should make clear what the changes will mean for Australian and New Zealand printers.

The lately ‘humbled’ Heidelberg says the inhouse production of its finishing machines at its German sites is ‘no longer competitive’ under new market conditions. It will stop making all postpress equipment, except for folding machines produced at the Ludwigsburg site.

For commercial printers it means Müller Martini and Osako are now the only saddlestitcher manufacturers of note to choose from, with Kolbus, Müller Martini and Wohlenberg the remaining commercial sized perfect binder manufacturers.

Heidelberg expects the measures to save it around €30m (close to A$43m) a year, starting from the next financial year, as it attempts to claw its way to an EBITDA margin of at least eight per cent in FY2015-16.

New CEO Gerold Linzbach foreshadowed the movements at Heidelberg’s annual press conference in June, saying the company would develop new business models for products with weak margins as part of a ‘portfolio optimisation.’

Linzbach says, “The competitiveness of postpress product lines at Heidelberg was limited, so these activities are being placed on an entirely new footing. Realigning these areas is an important step in improving the company’s economic situation.”

The so-called realignment will result in the closure of the Leipzig site and reductions in the workforce at Ludwigsburg and Wiesloch-Walldorf, affecting around 650 employees.

The Tianjin-based Masterwork is in its 19th year and specialises in researching, developing, making and distributing printing, packaging and testing equipment and molds in China and internationally – with sales in the US, UK, Ukraine, Spain, Australia, Peru, Egypt, Japan and South Korea.

Key Masterwork products include a high speed automatic die-cutting machine, precision automatic platen foil stamping and die cutting machine with hologram system, and a high speed automatic folding and gluing machine.

In the postpress commercial area Heidelberg will only continue to market ‘established folding machines and cutters’, shifting servicing for the discontinued machines that have already been installed to Müller Martini.

Stephen Plenz, board member of Heidelberg Equipment, says, “We were able to win two renowned suppliers as partners for our realigned postpress portfolio. They will help us provide our customers with competitive products and ensure continuity in services and service parts.”

More to follow.

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