"This is not because the technical concept was unsound or the specification inadequate," said Jan Van Daele, chief executive of the new Xeikon International business. "It is due to the repositioning of Xeikon to focus on our core DCP product."

"We are looking for solutions for existing customers and in the meantime we continue to support the CSP," he added.

Xeikon is also simplifying sales to avoid channel conflicts and create a "network of equal partners". "There will be no more exclusivity of product line or region," said Van Daele.

Xeikon is also simplifying sales to avoid channel conflicts and create a network of equal partners. There will be no more exclusivity of product line or region, said Van Daele.

It is introducing a new e-commerce option for users to purchase consumables online directly from Xeikon, and this includes so-called dynamic discounting on toner prices that can savings of up to 30% for high volume users.

Van Daele said Xeikon would compensate distributors by paying them commission for consumables used by their customers. They wont lose margin he pledged.

And he admitted that the loss of the sheetfed product would effectively force some VADs into the arms of competitors. Yes, its a difficult discussion and we realise sheetfed would be welcome, but margins on the DCP are better and there are much bigger opportunities there is no competition for this web technology.

Tony Halker, marketing director at UK VAD Openshaw, said: Its positive to be back shipping Xeikons and were looking forward to working with Punch. The DCP is a unique product Indigo has been talking about B2 for years and still dont have it. We are likely to complement our Xeikon products with something to fill the sheetfed gap.

Punch chairman Guido Dumarey said the firm was prepared to invest to restore market confidence: When I see the budgets for the next two years, they are more than double what we paid for the company. Whats important is the future and what we bring to the market over the coming years.

Xeikon founder Lucien De Schamphelaere, who steppd down from the board in 1997, is returning to the new Xeikon as chairman.

Story by Jo Francis