Daily drupa

Red Sofa Interview Stefaan Vanhooren, President Agfa Graphics

“Print will certainly survive, and print may have even more applications in the future than in the past.”

1. Mr. Vanhooren, worldwide the graphic arts industry is undergoing big changing processes in term of market structure and in terms of technology. How does this affect the business of your company?

Like every other player in the graphic arts industry, Agfa Graphics will be faced with challenges in the years to come. The media landscape becomes more and more diverse. Mobile and e-media are taking position next to printed media. The ‘information consumer’ is approached in new and creative ways and cross-media communications are becoming part of our daily life. They add value to both the information consumer and the information provider, that print alone is not able to offer.

Notwithstanding these developments and knowing that printed media is challenged in many applications, I firmly believe that printed media still are, and will remain, an essential and powerful communication medium.

The graphic arts industry has a tradition of change. In the coming years the process of creating print will become more sustainable, with improved quality and higher productivity. Agfa Graphics is actively playing a key role in this respect with e.g. our next-generation digital offset plate making systems. The shift to digital media will also be substantially different in some parts of the world. The need for print is largely driven by gross domestic product (GDP) increase, as well as by growth in population and literacy rates. In addition, it needs to be pointed out that the kind of content and its value for the end-user will also determine to what extent printed media will be challenged by electronic or mobile media, and at which speed.

There is another part of our industry, however, that will be affected far less by the prominence of digital media: the so-called ‘industrial printing’ segment. With applications ranging from billboards, point of sales (POS), indoor and outdoor signage and displays over flexible packaging, labels, folding cartons to decoration, textiles and various other industrial information display applications, it is obvious that alternatives don't always exists. For many of these applications, it is evident that printing will maintain a strong position for the foreseeable future and the progress in printing technologies will open up new and even disruptive perspectives. We invest in this industry with our industrial inkjet printing solutions.

In essence we believe that print will certainly survive, and print may have even more applications in the future than in the past. I believe this is not only true in the growth markets for print, but also where we consider growth to be restrained and challenged today.

2. Agfa has started with a constructive and deep restructuring program very early. Today it seems that you are in a more comfortable position than your competitors. Can you give us a brief summary of the development of Agfa´s business in the past years?

I would rather say that Agfa Graphics has transformed from an analogue film company into a respected digital player with a truly global presence. Driven by our long-term strategy based on innovation, growth and cost leadership, we are on the one hand pragmatic from day to day yet consistently initiate structural changes. The first vital strategic decision was to cease the development and manufacturing of CtP equipment and to forge strategic partnerships instead with system technology leaders in the newspaper printing and commercial printing markets respectively. This has created room for strategic investments in workflow software for both commercial and newspaper printers, in plate technology mainly minimizing the use of processing chemistry for thermal and for violet plates, and the transformation of our manufacturing facilities to become a top innovative pre-press supplier with a truly global footprint. In addition, it enabled us to expand into industrial inkjet resulting in an attractive portfolio serving the growing sign and display segment.
Other strategic decisions, of which the value is apparent every day, were our joint venture in Greater China and ASEAN, our technology agreement with Technova in India and the acquisition of the single largest graphic supplier in North America (Pitman). These alliances were geared towards excellence in distribution in the growth markets and North America and they allow us to bring the right focus to the respective markets that are fundamentally different and unique in their kind.

4. How big is the share of each business area in relation to the whole business of Agfa Graphics?

Agfa Graphics is a solution provider to the commercial and offset-packaging pre-press, newspapers and sign and display printers. The solutions include equipment, consumables, software and (integration) services with a strong customer focus. Digital pre-press counts for two thirds of our business today.
On a world-scale Agfa Graphics is active in the domestic markets Europe and North America and in the growth markets that count for about one third of the total business.

5. In 2009 Agfa Graphics acquired the inkjet-manufacture Gandi Innovations. Today you offer large format Inkjet Solutions (:Jeti and :Anapurna) for a wide range of applications. How does this market develop in Europe?

With our acquisition of Gandi Innovations we broadened our assortment, specifically in wide-format printing. The :Jeti product line offered a perfect fit in our portfolio, in between the :Anapurna family, high-quality printers for the entry-level industrial printing market, and the high-end automated industrial solutions such as our :M-Press Tiger and Leopard. Thanks to the acquisition Agfa Graphics offers a very complete range industrial inkjet printers. It has considerably strengthened our presence in all segments of the wide-format printing market.
Meanwhile, most of the :Jeti product families have been integrated and complemented with Agfa Graphics know-how and technology, with an intense focus on UV-curable ink solutions. They are fully supported by our professional services teams and available worldwide. With the :Jeti 1224HDC and the :Jeti 3020 Titan, Agfa Graphics successfully put a new generation of proprietarily developed and manufactured mid-range segment printers in the market.

6. How many of the :Jeti and :Anapurna systems are already installed worldwide?

We have sold more than 1000 :Anapurna systems in the market! The installed base of our :Jeti product line consists both of engines that had been installed prior to the acquisition and of a number of new products that have been released since the acquisition one and a half year ago. In total Agfa Graphics has about 3000 wide-format engines in the market spanning entry-level four-color machines all the way to very wide-format high-speed roll-to-roll solutions, and we expect this to go up sharply. This obviously also reflects in growing ink volumes that are shipped out every day. All Agfa Graphics' new engines work with proprietary-made UV curable ink, which is supplied from our manufacturing site in Belgium.

7. Are you also active in the markets in Japan, Asia and India, the US or in Latin America? How are these markets developing in comparison to Europe?

We are very active indeed in all of these markets, not only through local sales organizations (like in Japan) and some well-established and strong local partners, but also with our local plate supply from our manufacturing sites in China, South Korea, the USA and Brazil.
Growth markets are a strong focus for us and we have been able to strengthen our activities and position considerably during the last years. The joint venture with Shenzen Brothers (Agfa Graphics Asia Ltd.) opens opportunities for a larger market presence in Greater China and the ASEAN Region. Latin America has traditionally been quite successful but recent investments in the local manufacturing site enable us to be present even more prominently. In India we have a technology agreement with Technova, which allows both of us to focus on the Indian market specifically.
The technological changes in the growth markets are happening at a very high rate, much faster than we ever saw in traditional markets. The introduction of CtP for example builds on years of experience in Europe and North America, so our presence over there has proved its high strategic value.
In North America the situation is completely different: thanks to the acquisition of Pitman, Agfa Graphics was able to strengthen its market position as a total solutions supplier with a wide variety of world class products.

9. Agfa Graphics offers two chemistry-free solutions: The :Amigo TS and the :Azura TS. In Germany a lot of customers switch and change their workflow to use this environment-friendly technology. Is this also a trend in the rest of Europe?

Most definitely! One of our favorites! The success of our environment-friendly Thermofuse plate technology is evident in all parts of Europe, be it that depending on the region one may be preferred over the other. Whereas :Azura TS is very successful in most countries, typically, in Germany, our :Amigo TS was received very well, which highlights the fact that the acceptance of our Thermofuse technology for more-demanding commercial printing applications is also increasing. But also outside Europe we are doing well. In Japan for example, :Azura TS is the top selling environment-friendly plate solution with over 300 installations and a 90% market share in chem-free plates.
It is our clear intention to launch next-generation products over the coming year that will allow for a gradual step-up to more and more demanding applications in terms of plate sizes and press conditions.

10. Lets talk about workflow management solutions. :Apogee is the successful modular solution from Agfa Graphics. Could you explain the long-term strategy you are following here?

Just from an economical perspective alone it is clear that our customers need to increase their production efficiency if they want to survive. We believe there is no way around automated workflows and processes that will be able to operate with the lowest possible level of manual intervention. Production efficiency will be the key word (which also leads to sustainability by the way) and Agfa Graphics is developing workflow management solutions accordingly, some of which improvements will be evident already at drupa 2012. As far as the future of the printing industry is concerned, we are in a good position to deliver solutions to a wide diversity of printing markets that will deal with the growing workflow and process complexity. We offer the required automation to customers, whether they are active in the newspaper and commercial printing markets or in the high-end industrial inkjet market. Customers will embrace digital storefront solutions, MIS/ERP connectivity and hybrid printing solutions. Both :Apogee (commercial) and :Arkitex (newspapers) are now in a position to streamline the work. This is where we believe Agfa Graphics can bring added value to our customers through integrated solutions and services rather than with products only.

11. Regarding the big cooperation trends in our industry, are you planning to cooperate with other companies as well?

It is obvious that we are looking into all possible options at all times. The cooperation with Thieme for our :M-Press line is a good example; our strong relation offers additional value to our customers, as well as to theirs. We are prepared to consider more partnerhips given we believe the cooperation will result in a win-win situation for both companies.

12. What in your opinion is the biggest challenge for Agfa Graphics in the future?

Basically, I think we have two major challenges ahead of us. The first challenge for Agfa Graphics will be to keep our leading position in serving the offset printing industry worldwide. The accelerating shift from west to east in terms of economic growth impacts our industry quite extensively and confronts us with new competition and new expectations. However, with our portfolio of products and services that are not only state-of-the-art, reliable and sustainable, yet also price-competitive, we are confident that we can truly bring added value to our customers in order to make them stay ahead.
Our second challenge undoubtedly lies in maintaining our position as one of the key suppliers of digital printing solutions for the ‘industrial printing’ segment of the graphic arts industry. Changes in technology happen very fast and highly influence customer expectations. We have the complete high-tech portfolio and the service in-house to deliver solutions that will excel from a quality, productivity and sustainability point of view. Our years of experience in the industry, gathering know-how in terms of quality and consistency throughout a production process, will help us make the difference.

13. It is quite early, but could you tell the readers something about the new developments visitors from all over the world can expect from Agfa Graphics at the drupa2012?

For the visitors at drupa 2012 it will be a challenge again to find a good balance between getting a truthful impression of where the graphic arts industry is heading and to discover the right solutions for their company and printing business – not only for today, but also for tomorrow and the day after. Agfa Graphics will present itself as a reliable solutions provider to diverse markets from commercial printing over the packaging and the newspaper segment to the sign and display business. We intend to bring a clear message concerning the position we will take and the products and services we will be able to provide as a future business partner for any company in these markets.
But it is quite early indeed, too early to unveil more specifics on the booth and the solutions shown. One thing is certain: our booth will be worth the visit.

14. What are your personal expectations regarding drupa 2012 and what do you expect for your company?

drupa2012 will be exciting again, I'm sure. It will show that the printing industry is alive and kicking indeed and there will be more innovations, both in technology and in applications, than ever. I am looking forward to meeting lots of customers from all over the world and to learning from their perspective where the industry and their business are heading. I am also looking forward to receiving feedback on our position and our value proposition in a world that is increasingly in search of well-designed and customized solutions. And of course, I hope to be able to assist our Agfa Graphics drupa “crew” in harvesting many sales leads and deals throughout the show.

15. Regarding the development of bigger trade shows in China and Asia, how would you rank the impact of drupa?

We should not underestimate local trade shows, whether big or small, in Asia and more specifically China. Print China for example is definitely on the rise. Nevertheless, I still believe drupa will maintain its pole position as the absolute number one technology trade show in our industry. At no other trade show today visitors are able to get such a complete picture of the future of the printing industry than at drupa. Its impact on the industry is therefore quite important and will remain so.

Mr. Vanhooren, many thanks for this interview.