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No doubt, a year of drama the like of which we just lived through had never ravaged the graphic arts industry before. Manufacturers and service providers are equally affected on a global scale, be it in India, Japan or the US. Declines in sales of as much as 40 percent, reduced demand for printed matter and dumping prices rule the market.
“Improved business conditions, if any, will lead to better profitability at best in the second half of 1010.”
Heidelberger Druckmaschinen AG
Order of the Day: Shrinking of Capacities
The press manufacturers were especially hit hard. Rigorous and immediate cost containment posed a daunting challenge. For companies with a global footprint, it will always be accompanied by a great deal of upheaval. Heidelberger Druckmaschinen AG is not alone undergoing such catharsis, having had to cut staff since 2008.
As their spokesman commented: “Our aggregate order backlog over the first half of the current financial year between April and September sank by 42 percent as compared to the prior year. In early October 2009, we came to an understanding with worker representatives as regards a realignment of mutual concerns and interests and a social plan for the German locations. At the end of March 2011, we will have reduced our headcount by 4,000.”
According to their press release, capacity utilisation at manroland was a paltry 50 percent in 2009, which is of course unsustainable for any length of time. Says Thomas Hauser, director for Corporate Marketing and Communications at manroland: “The solution cannot be a cut in capacity by half, that wouldn’t make sense. Instead, we will ramp down our business activities to 70 to 80 percent of the 2007 numbers”.
“Our capacity utilisation rate hovered around 50 percent in 2009. As for production rates, we will have to come to terms with the newly targeted capacity and bridge the gap with reduced work hours”.
Thomas Hauser, manroland AG
KBA also was severely impacted by the market’s collapse. Klaus Schmidt, director of Marketing and Corporate Communications, anticipates a heavily shrunk market on the heels of the crisis. “KBA has relatively quickly adapted by retrenching in terms of capacity to the tune of some 20 to 25 percent for conventional printing technology in the face of a smaller market expected to be with us over the medium term.”
“Conventional printing technology worldwide is unlikely to return to the halcyon days of 2005 and 2006, even after surmounting the current economic crisis, instead stabilising at a roughly 20 percent lower level”.
Klaus Schmidt, KBA
