It’s no secret that all of the major litho press manufacturers have ramped up their efforts in the packaging market over the past three years, as the sector has proved its resilience relative to commercial print, where capex has yet to recover to anything like pre-recession levels.

At the same time, Heidelberg’s protracted development of the DriveLine inkjet press range under its Linoprint brand, and KBA’s partnership with RR Donnelley to build inkjet presses for a variety of sectors, including packaging, point to an acceptance that the market for these digital devices, although still small, will grow at an exponential rate.

Heidelberg’s acquisition of German digital press manufacturer CSAT marks the next step in its digital packaging strategy, giving it another string to its DriveLine bow in the form of the ITS 600 narrow-web inkjet press, which uses the Xaar 1001 heads, while also adding CSAT’s specialist toner-based technology to its portfolio.

Attractive proposition
For CSAT, the deal is a no-brainer, giving it access to a vast global sales and service organisation. However, the question of Heidelberg’s interest in CSAT – and its two very different technologies – is not so simple.

As packaging maven Des King says (see Opinion), the fact that Heidelberg would fork out an undisclosed sum to buy a small competitor after investing five years’ R&D in its own Linoprint technology, suggests that some element of CSAT’s business will significantly strengthen Heidelberg’s offering.

CSAT, which manufactures full-colour digital printing systems and consumables for the packaging industry, is described by Heidelberg as one of the market leaders when it comes to integrating industrial printing systems into production lines. This is particularly true of CSAT’s toner-based DTS 1200 and 6x35 printer series, which have been developed for high-end pharmaceutical applications, including in-line printing of aluminium blister packs on continuous or intermittent packaging lines.

Bob Leahey, associate director at Infotrends, believes that it is these two-colour laser printers for label and foil lidding printing, together with CSAT’s big-pharma contacts that were Heidelberg’s main target.

In a recent blog on the deal, Leahey wrote: "On balance, what Heidelberg has netted is an established and credible manufacturer of colour digital printing solutions for use by drug companies... CSAT has a list of customers in the one industry with some incidence of in-line or near in-line colour digital printing."

He goes on to point out that the output from CSAT’s laser printers is designed to resist heat up to 300°C, which is required to protect print during the pack sealing process, highlighting how deeply involved CSAT is with its clients and their manufacturing processes.

For all the obvious advantages of CSAT’s toner portfolio, the deal could equally be founded on benefits CSAT can bring to Linoprint’s DriveLine inkjet presses. King points out that, with the capability of CSAT’s ITS 600 exceeding 40m/min, its narrow web inkjet technology has a speed advantage over Heidelberg’s Linoprint, which runs at up to 28m/min.

For the time being at least, Heidelberg remains tight-lipped on its reasons for the acquisition, saying only that it wants to extend its digital printing portfolio for the cost-effective production of small and/or variable print products in the packaging sector. However, Daniel Dreyer, head of the Heidelberg Linoprint business area, confirmed that all Linoprint and CSAT digital print solutions will be sold under the Heidelberg brand in the future, with a final decision soon to be made on the product naming system.

Taking a lead
One thing we can divine from the CSAT deal is that Heidelberg is stealing a march on its rivals in terms of casting its net as wide as possible in developing its packaging offering. Leahey argues that by marrying its existing technologies with CSAT’s digital and integration experience, Heidelberg could be setting itself up as a one-stop shop for the sector.

He highlights its purchase of packaging software company CERM, its portfolio of VLF sheetfed presses, its stake in Gallus and of course its own Linoprint division as clear indicators of its intentions regarding the packaging sector. Of course, it’s not beyond the realms of possibility that Heidelberg does not know exactly what to do with CSAT. FFEI managing director Andy Cook says: "You’d be surprised how many acquisitions are the result of one company wanting to cash in and another making an opportunistic purchase, and then figuring out what to do with it."

Only time will tell which scenario rings true, but the chances are the end result will be the same and the German giant will dominate packaging in the same way it does commercial print.

30-SECOND BRIEFING
• Over the past few years, the major litho press manufacturers have been courting business in the packaging sector, which has remained more resilient to the ongoing economic woes than the commercial sector
• Heidelberg’s buy of German inkjet press manufacturer CSAT is its latest bid to capitalise on this market
• CSAT is a respected company in its field and its inkjet technology has some crossover with Heidelberg’s Linoprint portfolio, although it is unlikely that Heidelberg will continue to sell both; rather it may look to integrate CSAT’s technology into its DriveLine presses
• However, CSAT’s historical strength is in its toner-based presses, which it has had success integrating in-line in pharma packaging plants. This gives Heidelberg the double benefit of a proven manufacturer of digital presses for use by drug companies and an ‘in’ with those same brand owners through CSAT’s customer relationships
• Infotrends associate director Bob Leahey says CSAT’s inkjets for label and foil lid printing, together with its big-pharma contacts were Heidelberg’s main target
• While Heidelberg remains tight-lipped on the reasons behind the purchase, it is clear that it is looking to take a lead in the field