We have written
in earlier years about the inevitable consolidation of the offset
press manufacturers and particularly about the leading international
manufacturers of high speed web offset presses. As we wrote after the
last drupa in July 2008, “The top two manufacturers in the
70,000-plus-cph markets are manroland and KBA and our estimates put
manroland ahead of KBA by about US$ 300 million in this category.
Together they currently command almost 60% of the market and the
other five players share the balance 40%with Goss, perhaps the sales
leader of this group in these type of presses. With most of these
manufacturers hovering between US$ 250 to 325 million in sales of
70,000 cph plus presses, will all five survive in their present
structure on their own?”
In the ensuing years the downturn of
the newspaper market in Europe, North America and Japan has continued
while new developments such as tablets (iPads) have just been around
for less than two years. Some parts of our forecast of consolidation
have already come true with Shanghai Electric acquiring Goss
International in 2010. In the meanwhile with intermittent
interventions by the German government, unsuccessful consolidation
discussions have taken place between almost all of the European
offset press suppliers: Heidelberg, KBA, manroland, Solna and Wifag.
Although unsuccessful thus far, one can reasonably expect some
consolidation of the European press manufacturers coming out of the
insolvency filing of manroland on 25 November 2011.
The state of the Indian web offset
manufacturers
Too often the Indian machinery
manufacturers think that they are immune from what is happening in
the rest of the world or even in the Indian economy. This is partly a
function of their relatively small size whereby they can subsist even
lean years when sales plummet to half as they did in the 2008-09
financial year. Nevertheless it is safe to say that over the past
decade the Indian web offset manufacturers led by Manugraph and The
Printers House have grown into a R600 crore (US$ 125 million)
industry. This has happened on the back of increased editions,
pagination, circulations and particularly the rapid rise of 4-colour
pages of the Indian dailies. Although our newspaper industry can be
safely expected to continue to grow in the next decade, it would be
foolish to ignore the possibility and need for increased
consolidation among the publishers and ultimately some consolidation
by the more than 20 local web offset press manufacturers.
Another factor that has kept many of
the Indian web-offset press manufacturers alive has been the
increased expenditure by the government and by the economy as a whole
on education. A good percentage of the web presses bought in recent
years are producing educational books. Moreover, as exports of
presses have fallen, domestic consumption has taken up the slack.
This is true even for organised
manufacturer-exporters such as Manugraph and The Printers House. Both
companies have turned their attention on the emerging markets in
Asia, Africa, and Latin America and to some extent the Middle East.
While one enjoys a good market share in Russia, the other does well
in China. Manugraph has, notably, begun the sales of Chinese
manufactured converting equipment to the local board packaging
industry. Manugraph of course has also taken on the big players by
launching and installing its 4 x1 presses in two newspapers which is
the first real challenge to the European and Japanese manufacturers
from an emerging economy web-offset manufacturer in the 70,000 cph
segment.
While both the newspaper and the book
printing market will remain healthy in India and the outlook is not
gloomy for its web press manufacturers, they will nevertheless also
be compelled to think about consolidation. Many of them have not been
able to professionalise their companies and they can expect
generational issues to impact them as much as they are being impacted
by the increased costs of raw materials, engineering inputs and
extremely competitive markets at home and abroad.
— Naresh Khanna
editor@ippgroup.in
No comments:
Post a Comment