PrintWeek How has the new offering been received by the market?
Stephan Plenz We had a ramp-up plan for all markets up until Drupa and we are absolutely in-plan. Actually, some countries wanted to start earlier due to demand from the markets. In my 25 years with Heidelberg, it’s the first project where I only had positive feedback from all markets. The customer feedback is very good, because we are talking about the challenges printers have trying to make money; we’re not talking about technology and searching for something where this technology might fit. It’s been very well received.

PW What about competitor reaction?
SP What is very positive as well is that competitors are approaching us saying: "Why haven’t you done this with us?" Some are a bit angry, and that’s the most positive sign you could get. Some are very friendly.

PW You said one of your key target customers would be users of high-performance digital presses. How’s that working out?
SP The root cause of our success is people thinking: "Do I really need that type of equipment?" Of course, if you have the right business model for those high-performance products you can make money. But if you are a printer who has small runs, then our system seems to be economically a much better opportunity for them.

We are not selling to people who are just starting to think about digital; that is over. Every printer has made the decision whether to step in to digital or not, this conversion has been done over the past 10 years. Now we are talking to people who are thinking: "How can I make money by serving the market?" Here, I think, we have the best story for them.

PW What have been the key lessons from the first six months?
SP For me, my feelings about the co-operation with Ricoh, from the first contact on, were that this would be a good fit. Now it’s on a robust basis. Working together with these guys more and more you realise the two companies have the same basis and way of thinking, customer-oriented technology. Working together is really a pleasure with them. We found solutions for all market issues. It’s always tough when you talk business in the market, but we found solutions pretty quickly. And the connectivity to the technology side in Japan is getting stronger.

In fact I’m going to Japan tomorrow to sit with Ricoh and their technical people and look into the future. This relationship is very positive for both parties.

When it comes to the market, the requirements in industrialised and in emerging markets are a bit different. Customers in industrialised countries have made their way through the tunnel and are looking for the next investment. In emerging countries you still find companies saying: "Let’s do this with the help of my friends". They don’t want to start a relationship with a new company they don’t know. The roll-out is going a bit faster than planned, it’s all good learning.

The new Ricoh Pro C751 seems to have impressed a lot of people

The C751 is a clear signal. Quality-wise it’s as good as the C901, performance-wise it’s slower. And the market demand for this product is even bigger. So that’s clearly the trend from customers – don’t kill us with high-tech. Give us a product we can make money from. We sold C751s before it was even launched. There is clearly a demand.

PW Which type of Heidelberg customer has proved most open to the digital offering? Or is it quite a wide variety?
SP It has been a variety. We have clients who are replacing competitor equipment and also clients who are entering this exciting market area for the first time. Mid-size commercial printers have a good understanding about the necessary step in digital businesses and Heidelberg offers solid consulting about the right solution. This is where the C901 fits perfectly.

Small commercial printers appreciate the help of Heidelberg to learn more about complementing their offset business with digital solutions at the right price–performance ratio. The C751 perfectly meets the requirements of clients with slightly lower production throughput.

PW How are you overcoming inevitable tensions in the sales channel between the Ricoh and Heidelberg teams?
SP It’s not a big deal. Ricoh was not strong in our industry or customer base. And wherever they are strong and have a contact, we tried to step away from channel conflicts. It’s not conflict, it’s a clear understanding of where our customers are. The clear differentiator for us is the integration, the software and the colour management, and then the contact and service that is well known from Heidelberg. This is what our customers like. And therefore the differentiator is not: "Can I get it somewhere else 5euro cheaper".

PW What about click charges? I know you said before this was something Heidelberg customers don’t really like
SP Today it’s all click charges. Even if they [customers] don’t like it, as soon as you want to sell digital, you have to be comparable to the other offerings, and therefore you have to offer a click charge. What is pretty interesting is there are no two click charges on earth that you can really compare! The offerings from different suppliers are... intelligently variant. But, today, based on this selling model, there are only click charges.

What we offered and talked about is shall we offer you the Anicolor and SM52 on a click-charge model too? And this they shy away from. It’s definitely a possibility and if customers really want it we can offer it. I, personally, thought that this would take off. On the one side, they hate the click charge. On the other side, for digital devices they don’t see another solution.

PW We’d loved to hear about it when someone does go for that offset click-charge model. In Heidelberg’s recent update to the market, you talked about a large volume of digital sales. Is it possible to say how large?
SP [Pauses] No.

PW No clues at all?
SP Up until today we have already sold half the volume we planned for the fiscal year already. So we are pretty confident we will do at least what we planned for, or even better. We’re also confident that the full roll-out to all markets next year will ramp up according to plan, and it was an ambitious plan.

PW What about the margins on this
business?
SP Whenever you have something like an OEM contract, you cannot sit on the same margins as something you make yourself. But we are used to this already through our Polar partnership. You can’t sit on the margin, but you don’t have the R&D costs either. The most critical question is, what is the real street price, for the product and the click charge. And that is all booked and collected by us.

PW You recently spoke at a Pira conference and talked about the untapped opportunity for hybrid printing. Can you expand a bit more on that?
SP Hybrid printing is a big buzzword. What we really mean by hybrid printing is that the final print product comes out of different technologies. For example a product produced on Anicolor or even on a bigger offset press, with late-stage integration of variable data or other information on a digital device. The most crucial part of that is colour management, because we’re not talking about black-and-white advert printing. We’re talking about picture integration and things like that, without giving up the high quality and the volume opportunities of offset, and only adding what needs to be printed on the digital device. We have several versions and it’s creating a lot of interest. If you have your colour management under control, and therefore the devices and software under control, you can do it.

PW Talking of colour management, do you think that putting your colour management know-how into Ricoh devices makes a bit of a difference, or a big difference?
SP It makes a mega-big difference. For a lot of print samples coming out of digital devices, this colour management is not needed. It’s only printed digital, and the customer is not aware of what is good colour and what is not. But, for professional print, it will be more and more important that colours match. As soon as it comes through this hybrid printing model, and our printers make use of it, e.g. a job with 5,000 pieces with 20 in advance, then it has to match and they make use of what we offer. The same applies for corporate colours.

PW And what about the hot industry topic of inkjet? We know you have your CSAT and Linoprint equipment ranges that are mostly focused on packaging
SP Yes, that technology is focused on three segments: labels, blister packaging and carton packaging.

PW What about inkjet in the commercial space, any possibilities there?
SP There are possibilities, but when you look at the data, inkjet is usually a roll-to-roll application. The quality of inkjet is defined by the distance between the substrate and the head. So the quality of inkjet is clearly dedicated to web features, and this market is mostly transactional and transpromo and it is already well covered by a lot of companies and technologies.

The margins in this segment are really going down; it is fully under pressure. To invest into that segment is technically possible, but, up until today, we haven’t done it because the market is pretty well covered. It’s not a big opportunity we need to jump into. We always try to dedicate the technology to where it’s needed, and not take a technology and offer it to everybody who might be able to pay for it. I think we have to concentrate on the real needs of the market and then offer the right technology, not the other way around.

In the packaging industry I see potential for inkjet to grow, as an additional technology, not as a replacement technology. We can add value for that industry in specific areas. We have done something very special for a pharmaceutical printer, allowing them to separate boxes that have a hickey or some issue on them. This is a very special integrated inkjet application, helping a customer to optimise their processes and their deliveries to their customers.

PW Can you tell us a bit more about that? How does it work?
SP Inspection control is comparing every single box, based on the PDF of the artwork. Later on in the press, we have inkjet heads, and if the inspection system detects a scratch or a hickey, the inkjet head will destroy the barcode on the box. Then, later on, this box is kicked out from the folder-gluer automatically. They are not printing the whole box because the price of the ink will kill you.

PW That sounds like a clever use of inkjet. Finally, what can you tell us about your plans for showing off the new portfolio at Drupa?
SP The digital portion will be a big part of our show, no doubt about it. We are targeting a real Heidelberg edition of the Ricoh product, more Heidelberg than the product we are selling today.
We will see the full-blown product range and workflow at Drupa, Prinect integration together with the SM52 and all the products we are selling from our partner. I think it’s going to be pretty interesting for our customers.

We will share applications we see where our customers are making money. That’s what we’re working on.