Cost-cutting forces Heidelberg to withdraw from PacPrint13

Heidelberg's dramatic global cost-saving initiative means the press maker will not exhibit at PacPrint13.

The withdrawal follows the German-owned giant's 'Focus 2012' efficiency drive, which targeted annual savings of about €180 million ($230 million) from the 2013/14 financial year.

The PacPrint decision was outlined in a memo sent by Heidelberg ANZ managing director Andy Vels Jensen to staff, partners and its top customers and leaked to ProPrint.

The machinery manufacturer, traditionally the premier exhibitor at any printing trade show, said it wasn't all bad news, and that it had 17 presses on back order for ANZ following Drupa 2012.

However, this was a far cry from the bumper years before the previous Düsseldorf exhibition; the local subsidiary took orders for almost 1,000 new printing units in the three years leading in to Drupa 2008.

At the 2012 fair, the German manufacturer filled its order book with leads from nearby countries in South-East Asia as well as Japan and China.

But in his letter, Vels Jensen said: "The bad news in our books is that the industry still hasn’t stabilised and for ANZ in particular, the industry remains in limbo despite a fairly healthy, albeit fragmented and uncertain, economy."

Despite a transformation drive over recent years that has seen the ANZ business grow consumable revenues by 35% alongside a 35% reduction in overheads, the local business was given a new, "non-negotiable savings target" by its German head office.

"It’s on this background that you will shortly learn of our decision to pull out of PacPrint 2013 in Melbourne," wrote Vels Jensen.

He called it "a very difficult decision" that was not taken lightly, but was a last resort against the other options to achieve the savings target.

"As you will know by now, we have had four very tough years since the record years of 2006-08 and we continue to operate in unstable and unpredictable market conditions.

"Despite the Australian dollar sitting at a record high and government providing capex incentives, many printers still haven’t made the decisions to invest in new technology; putting them two to three Drupa technologies behind," he said in the letter.

It is understood that Heidelberg technology will be present at the show via its partners.

Vels Jensen did not comment further when contacted by ProPrint.

PacPrint13 chairman Ian Martin, managing director of Ferag Australia, told ProPrint: "The decision by Heidelberg to not exhibit at PacPrint next year has been made by Heidelberg and GAMAA will not make comment on the choices of individual companies or the circumstances that have led to this decision.

"The decision, while disappointing, is not reflective of the show as a whole. More than 45% of the space at the show has already been booked and PacPrint will as always showcase the developments and trends in the industry as Drupa did this year. 

"To pin the success of the show on a single exhibitor is not feasible, nor valid," said Martin.

"PacPrint will be a great show expanded in 2013 by the co-location of Visual Impact Image Expo and we look forward to welcoming visitors of all print disciplines from around Australia and across the region," he added.

According to the PacPrint13 floor plan seen by ProPrint in late May, Heidelberg had reserved the show's third largest stand after Currie Group and the combined stand for Fujifilm and Fuji Xerox Australia.