Świat DRUKU (The World of Printing): Heidelberg during the last financial year, ended in March, had a wider range of orders. Does it mean that the period of economic downturn is already behind us?

Bernhard Schreier: No, but it also depends in which part of the world you take a look. If we look into North America there is still a lot of hesitation in investing in new material, while in the other side of the world, in China, business is booming. People invest a lot in the new equipment because there is also prosperity in printing foreseeable. Still North America is the biggest print consumer of this world and there is sill high discrepancy between investing in printing equipment and consuming print. And that is why we still see opportunities in the future, that there will be more investment in printing equipment also in the northern hemisphere. In Europe, we feel good in Central Europe, especially in Germany, because the investment grade and the necessity to invest in new automation and this kind of things is high. While Italy, Spain, Greece, Portugal and so on, everything that is around the Mediterranean Sea including North Africa as well, is weak right now because of Euro prices and also because of troubles in governmental issues in certain countries. In Eastern Europe, including Poland, feelings are also mixed. Poland is a very good market for us, because there is still being generated a lot of print and also export of print out of Poland is still very good business. The situation is so, because people are investing in our machinery. In Russia it is rather mixed as well, rather, let’s say, flat than increasing. In the eastern hemisphere, as I said, China is in very good situation, but there is shortfall in Japan, because of the tsunami and because of the earthquake. There are a lot of problems there now to regain confidence in the development of the economy. So when I look around the world, I see it is mixed and I have very mixed feelings. We still think that this year we can improve our sales against last year again, and last year again was good against previous year. It is not a very steep increase, as we have seen in previous crises, it is rather a moderate increase and this is how we set up our company to meet this challenge.

ŚD: And what about German market?

BS: As I have said before, German market is still quite good. We think, that printers in Germany have good business models and invest a lot in the new machinery. German printers know that without automation, without having progress in the performance of their machinery, they will loose ground and that is why investment level in Germany is quite good. The capacity load in Germany has already been over 80% and that means that this is the investment status people need to invest to have more productivity.

ŚD: What trends in the printing industry can be seen today?

BS: There are several trends. One is that we always have to distinguish between emerging, developing countries on one hand and industrialized countries on the other hand. In industrialized countries productivity and automation are still increasing and getting more professional in workflow management. These are leading factors plus printing green, that means, looking at the environment and how environmental issues are addressed within the printing process. So, for us as manufacturers, those are the focus areas where we have to look when we look at the industrialized countries. Then, the second trend in the industrialized countries is the trend web-to-print that means that getting through the internet print orders into the print company and then having an automated workflow within the company, so to have very low cost of production in terms of the entire throughput of the order through the print company and getting practically the orders through the Internet and then distributing the jobs afterwards. This is the major trend which happens to be in Germany especially successful in the future. But that is that the trend from having many, many printers with small equipment to having fewer printers with bigger equipment and automated workflow instead. That means there is a trend from smaller printing units into larger printing units. This is a general trend and then workflow automation, that means, how do I get IT managed information technology, managed workflow in my print shop. At certain point in the industrialized countries there is also a continuing trend to digitalize print, which means that digital printing plays a major role and this is why Heidelberg also had this partnership now with Ricoh in going as a reseller for the digital equipment. So that we can meet the volume requirements through offset and the individual requirements which is digital for our customers.

Emerging countries are for example in Latin America and Eastern Europe, and China. When I say Eastern Europe I mean countries on the east from Poland. Poland I see today as industrialized country, because everything is already established there and the printers in Poland react today as those in Germany, France, UK or North America – there is not volume production but rather specialized production with high-productivity and this is why Poland is no more under the umbrella of emerging countries. This is why when I say emerging countries in the east I mean Baltic and Balkan countries, Finland, Russia, Slovenia and so on, – this is still in the developing mode, cause there is still not too sophisticated printing but rather stand up printing. But the really emerging countries today are in Asia, Latin America and this is where the print volume is still growing. That means that you have more and more print in terms of advertising, commercial printing, publishing printing and these emerging countries are rather looking for standardized machinery and not too sophisticated equipment, because they want to produce with not too skilled people volume. And this is why for these countries we have different equipment available.

ŚD: What does the Asian market look like? You have a manufacture in China. Is this market open for Heidelberg product?

BS: Absolutely. Because today only importers into China, either this are Germany or Japanese printing machines manufacturers, cover the upper print demand in these countries. While local manufacturers cover the lower demand of print quality. So a lot of volume is created in the lower volume but the upper volume is increasing a lot also over the last few years. That means the demand for the quality, reliability, sophisticated, advertising, packaging printing is increasing heavily also in China. This is why we created our factory in China. What we can cover in terms of standardized printing for the high quality demand is produced in China and everything that is more and more sophisticated in printing – for special packages boxes, special advertising, commercial print – those machines are still transported form Germany to China. One third of what we sell today in China is produced there, two thirds in Germany. Today China is the single biggest market for Heidelberg, so there is no other market bigger in demand than China and it is also, let’s say, one of the biggest consumer of what we produce.

ŚD: How can you describe the North American market in comparison to Europe?

BS: America is still in, let’s say, a big depression. Has reached the basic demand for print equipment and still produces more than invests in new equipment, that means the production is done on older and older machinery. There is a big lack of investment in the North American market while the European market is up to demand when investment in renewing of print machinery is concerned. North America is still one of the biggest print consumers but is not the one of the biggest printing market. And this is why a lot of imports of print is going into North America and the investment is lacking behind the demand.

ŚD: Do you think that the eastern printing houses are or can be competitive to the western printing houses?

BS: Yes. We cannot generalize country by country. There are very good printing companies in different parts of Eastern Europe. Especially the Polish printing equipment and Polish market is higher developed in average than the other Eastern European printing markets. But also in the other printing markets there are still printers who are very sophisticated and very good but not the average.

ŚD: Some experts assets that the Eastern printing houses can be competitive to western printing houses and I heard that you help the printing houses to be competitive. In what way do you do this?

BS: First of all we sell to this printing houses the same equipment as we sell to German printers. Secondly, we have equally skilled people in Germany and Eastern Europe. I name now Germany as being the reference. And when I say skilled people this is related to, let’s say, consulting that is needed to do sophisticated job; secondly in servicing the equipment in terms of constant availability of the printing machine during the entire time when it is needed and thirdly, also having consultants in Heidelberg who provide know-how about optimization of the workflow and of the entire print shop management. It is being done same in Eastern Europe as it is being done in Germany.

The other point is that still some Eastern European print shops think that having advantage on the salary side for the employees is sufficient enough to compete with western countries. The awareness of need of managing a print shop more sophisticated is in eastern print shops not as present as it is in western print shops. In Germany the salaries are very high. The printers need to find other sources of productivity increase because at the salary level they cannot do too much, so they need to optimize his workflow, logistics, they need to have more automation on the machines to be competitive. In Eastern Europe salary levels are still lower than in Germany and this is why the pressure to optimize in automation, workflow and logistic is not as big. The printer says: “Hey, I am so much cheaper than the German so I can make an offer for this product only because my salary level is lower”. The pressure and need for change is not yet as eminent in Eastern Europe as it is in Western Europe. So the potential to do more in Eastern Europe is much higher because if Eastern printers would do the same thing in optimization of their print shops as Western printers do the profits could be much higher and this is still the difference between East and West.

ŚD: Lately Heidelberg formed an alliance with Ricoh company and added to its offer Ricoh production digital systems. And lately you bought German company CSAT which produces digital printing systems for packaging industry. What place in your business plan has digital printing? And what bout your technology Linoprint?

BS: Many questions. First of all we have to recognize that digital business is part of our business and that is why Heidelberg needs to be part of digital printing as well. And this will be in various sectors in our business environment. First of all, general commercial printing of very short runs up to 100 or 200 copies or even personalized printing can only be done in the future digitally. When we went into a reseller agreement with Ricoh we gained a partner who has very high quality at affordable price in a very good reliability. We have now an agreement with Ricoh to deal with their 900 series, that means 90 pages per minute in standard printer. This is exactly what is needed in our customer base – to be beside offset printing equipment. General commercial printing, personalized printing can be done with this and in addition to that we then offer to our customers offset printing which in combination gives him a full range of offering for his customers. On the other side there is also specialized printing which is not general commercial printing. For instance packaging printing: this is also label printing for bottles which may be personalized or printing the date of expiration on blisters. This will also be a sector of print in the future and it has nothing to do with Ricoh which cannot do that. But we can with Linoprint – this is where we do this blister printing. CSAT cannot do it. CSAT is specialized in special printing technology and in certain sector in the packaging area. So we can built – with these two technologies: CSAT and Linoprint ­– special machinery for special applications on one hand, and we can also take the printheads which are developed by this two companies and put them into packaging devices, on the other hand. If there is a production line which produces folding carton boxes at the end of this packaging line I can even put our printheads to spray addresses and special labels on boxes. That means, it has nothing to do with Ricoh, this is a complete separate area of activity which we want to cover as well. In addition to that on our Linoprint side and CSAT side there are very interesting technologies and patterns which we want to develop further maybe to also have a kind of hybrid printing between offset and digital printing. Also this can be an opportunity which we are going to explore and find out what can be used for us and our customers in the future.

ŚD: How important for Heidelberg strategy is Anicolor technology?

BS: The Anicolor is just in between. I mean if you take now high fledges XL machine as offset machine which has a certain volume and you have digital press where from 100, 200 copies on – it is difficult to justify the cost of inks for example. And you have the Anicolor which just makes the bridge between the high sophisticated offset press and the digital press. Because when you are going to Anicolor press which is from 200 copies on very reliable for very short runs, you can use the offset press highest quality in terms of offset printing, but in the same term saving the paper waste of 90% because it is so fast in changing orders. Then you have the ideal bridge one and another. This is why we promote Anicolor and we are very successful with Anicolor.

ŚD: You are now the president of drupa fair. What is your role there?

BS: The general role is to promote drupa and the printing industry for the entire audience of the world whoever want to hear it to make drupa 2012 successful. And in this role I am working together with the different communities for all those exhibitors who are at drupa: machine and printing, ink, paper manufactures who goes to drupa, within this association I am the president now. Whoever goes to drupa is in this association where I am the president now – this is one role. The other one is that there is also the drupa, the fair company which needs the promotion so that as many people as possible come to drupa. The Messe Düsseldorf and I am dealing between the exhibitors and Messe Düsseldorf to make promotion for drupa. I think drupa 2012 will be for our business and our industry a very important one in terms of giving guideline where print is going in the future, what new technologies are available for what kind of applications but also to promote outside of the printing world that print has value and will be an element in communication all over world in this society. My mature and active role will be to travel also around the world, what I am doing anyhow. But wherever I am in Chicago, Tokyo, Moscow or Shanghai, ­whatever happens up to drupa I will be the spokesman for drupa and tell what drupa is and why people should come to drupa and what is exhibited there.

ŚD: Do you mean that drupa will answer us what is the future of printing industry and technology?

BS: It will at least try. All the people who go there are promoters of print: digital, offset, flexo and everything what goes with it. So all of those who goes with it they want to show that there is something with print. I think that it will be the mature role if drupa 2012 to show to the outside world the role of print in the current world.

ŚD: It is a secret or you can you tell me what Heidelberg will exhibit at drupa 2012 ?

BS: Yes, it is a secret. On one hand we will show a lot of new things. There will be thing which bring our customer forward in what and how they do therefore I would like to – its also my role as drupa president – not to unveil too much at the beginning. If not, I would have no role anymore. I need to increase the expectation level for drupa that everybody would be curious of what will be happening there. Even to me – drupa president – our competitor won’t tell me, what they will bring to drupa. So it will be still worth going and this is the intention that we got people there and that we generate confidence in the business.

ŚD: I know that you have been working for Heidelberg for many years. Actually you started during studies. Can I ask you what was for you the biggest challenge during your working for Heidelberg?

BS: There were always a lot of challenges: small at the beginning and big in the recent past. Challenging is always the question of what role do you have in your current position. When I was starting at a shop floor as a simple engineer and I had to bring a new product to the market – that was the biggest challenge I could get. When I went to France for 5 years to take over Harris Graphics which we acquired in 1981, and I was there from ’90 to ’95 – that was the biggest challenge to integrate this company with Heidelberg and to bring new production know-how to this company in France. Recently there were two major crises in 2002/3 and now the one from 2008 until today – there were major challenges on restructure the whole company. You always have to see challenges from the position where you are and then it is relative to that. Now when I look back I can say: “Yes, bringing the new product into market it is not a challenge for me any more today”. So you always have to see it from different perspectives.

ŚD: What is your hobby? What you like doing in your free time? I hope you have free time?

BS: I do not have free time, just ask my wife. (laugh) I like to play golf with my wife at the weekends and I have two grandchildren now. So whenever it is possible I try to see them. For more I do not have time. Really.

ŚD: Thank you for the conversation.