The used machinery segment has over the years matured in the open world markets. There are lot of equipment used in the printing industry which are traded each year, many readily available, and in comparison with new machine, these come at a much lower cost.

There is also no doubt that used machinery has grown in popularity, with some fairly large players installing them. Jak Printers in Mumbai installed a used Heidelberg six-colour plus coater while RP Printers in Delhi installed a refurbished eight-colour Heidelberg. Likewise, Borkar Packaging has installed a refurbished Roland 707 LTTLE at its Goa plant while Shree Arun Packaging in Mumbai installed a Roland 500 at its Mumbai plant.

Nitin Gupta, managing partner at RP Printers, says: "Suitable budget, efficient press to meet our demand, low maintenance and government support for pre-owned printing presses are some of the reasons why we opted for a refurbished machine."

And who says refurbished or pre-owned digital kit can’t perform? Ahmedabad-based Positive Point installed a refurbished Kodak NexPress 2100 and hit 4-lakh print mark in two months.

But when buying secondhand machinery, the obvious caveat according to Wayne Morgan, online publisher, Haymarket, UK representing pressXchange.com, is: "A buyer has to do his own research."
Morgan recently conducted the Canon sponsored PrintWeek India’s Breakfast Briefing for the Award’s shortlisted print companies. He made a presentation on the global used graphic machine market comparing the pre-owned business and buying methods of the rest of the world vis-a-vis India.
 
The pre-owned trend
pressXchange, headed by Morgan, is touted as the largest search engine for used graphic equipment and boasts about being one of the largest online print communities and is a market leader in the promotion of used print equipment. Among visitor countries accessing the website, India ranks third (2,069 users, 5.89%), after US (5,529 users, 15.75%) and the Great Britain (2,527 users, 7.22%).

According to the trends reported by pressXchange, 2007 was the year when the recession cycle began, both manufacturers and dealers of used machinery were battling for deals. The pattern followed in the subsequent two years.

Morgan says that 2010 showed promising future for investment and spending in the industry, but compared to other countries, the UK secondhand machinery market remained slow. "There were sales, but most had gone abroad as a lot of printers in UK struggled to secure finance for equipment." As a result, the overseas markets like China, India, the Middle East and Africa.
 
Rest of the world v/s India
Morgan conducted a survey for the period June to August 2011 (pictured at the bottom) of the global used graphic machinery market and also compared the rest of the world with the Indian market.

In terms of rise or fall of printer companies in the next five years (Fig 1a), current use of used machinery (Fig 1b), investment in sheetfed presses (Fig 1c), India holds its own as against the figures for rest of the world. Likewise in terms of investment in equipment in the next 12 months (Fig 2), Indian printers’ response to buying used machinery is also comparably higher. What is interesting is that the dealers too are expecting an increase in sales in the next 12 months.

Buyer beware
Many a times used machinery buyers are of the opinion that they have to accept what’s on offer and don’t go into the market with a specific requirement.

"Unfortunately, this is not the best approach. Initial discussions should detail what equipment is needed and what the seller can offer to fit the specific needs of the buyer," says Faheem Agboatwala, chairman of the BMPA’s STB Forum, who made a presentation on ‘How to buy new and pre-owned equipment’ during the Forum’s meet on 12 October 2011.

Further, the other pointers that Morgan’s survey throws up are the preference of buyers to deal with dealers – overseas dealers, in particular; however most of them are through another party, local dealer.

"Buying an overseas machinery through a local dealer can eliminate potential problems. It also opens up a whole new selection of available equipment. A good Indian dealer could have overseas contact whom they trust and can deal with," says Morgan. But Morgan suggests cutting down on middlemen (agents), especially in your own market. "Get as close to the seller as possible (dealer), you will save a considerable amount that goes as a commission."

Online buying
Like other commentators, Morgan urges caution when dealing with overseas sellers on the internet. "Never part with money unless you have confirmed that the machine is available to sell by the seller... and it exists."

Stephen Lamb, managing director at Atlas Machinery UK, which was present at the just concluded Ipex South Asia, as part of the UK Pavilion and UPE8 (the used machinery section of the show), has his take on online auction.

He says: "Deposits are lost if the deal is cancelled. And like any auction of a company closure, the buyer has no idea of the complete working condition of the machinery. Hence, it’s far better buying from a reputed dealer." He further adds: "There’s another type of online buying where some spurious dealers who advertise machines that do not exist, at low prices only to receive deposit from gullible buyers, who of course lose their money."

Peter Kloppers, managing director of DG Press services, another company which was present at Ipex, agrees. "We, therefore, communicate directly with the printer to be able to exchange the information, so we know exactly what the customer requires and the customer knows exactly what he will get."
 
Careful financing
Among the Indian printers’ primary means for financing their investment, according to the survey, have been own cash reserves, bank loan and lease purchase in that order.  

However, financing your secondhand purchase needs to be carefully considered. Indian banks and lenders will want plenty of details as to how the product is to be delivered, particularly if it is of some scale. Sheetfed presses have been a bank manager’s favourite, but don’t shy away from asking for a loan to buy a late-model digital press.

"Banks do have reservations even when the documents are presented correctly," says Jaimone Kuruvilla of Nector Prints. The company recently installed a Heidelberge CPtronic large-size machine and  Kuruvilla says, "getting finance was tough."

There was no such problem with Khushru Patel of Jak Printers. "Yes, financial institutions offer support after verifying a company’s worth. Once they believe in you, they believe in everything."

Generally, digital kit has not done well on the used circuit because of the enormous technology shifts and resulting price drops, but some financial institutions are becoming more broadminded. "Yes, I think banks and finance companies have now started offering reasonable support for secondhand digital machines," says Kirit Faldu of Positive Point.
 
Presses – the pick of the lot
According to the pressXchange survey, there’s an upsurge in used sales relative to the overall market, but the main interest has been in presses. "Offset as basic; but we are specialists in hybrid presses, combining offset with flexo, rotogravure and digital," says Kloppers. He adds: "These are big-ticket items and the difference between a used refurbished press and a new one can differ but is approximately 50-75%."

Lamb agrees and says, "It’s offset and post-press." But Lamb warns of traps for the uninitiated. "Engineers reports are provided for all machines imported into India. For a pre-inspection report there are very few experts on all facets of the industry so these are difficult to obtain. It is worthwhile dealing with an experienced, established dealer either in India or Europe."

It’s a known fact that, unlike cars, presses do not come with owner’s logbook. Hence, it would be a good idea to contact the original vendor’s service department to find out the item’s history, wherever possible.

As for post-sales access to service and parts, Morgan points to the survey’s recommendations and suggests ensuring post-sales access to service and parts, and try to get a warranty with the sale. And he reiterates the condition and test trial factors. "Check the condition and run a test... twice!."
 
In conclusion
Morgan summarises the survey, which should read as good news for the Indian printers and players in the used machinery segment. He says, "More printing companies will start up in India and more printing companies will close down elsewhere. There will be a big boost to sale of pre-owned machines. The future in India looks healthy, the future globally is uncertain." 

He concludes on a lighter note, saying: Without new sales, late model hi-tech re-marketed equipment will be hard to come by. PressXchange.com can help and it’s free."


Figure 1a


Figure 1b



Figure 1c


Figure 2


The number crunch

• 64% of used kit that have been sold are sheetfed presses
• 74.2% dealers said their sales come from India
• 76.3% dealers expect sales to increase in the next 12 months
• 57.7% dealers sold machines directly to Indian printers
• 75% dealers said India is medium or high on their priority list
• 70% global printers said they would purchase a Heidelberg kit
• 80% Indian printers said they would source their machines from an overseas seller
• 91% printers said they would need a test trial before purchase