Waiting to Invest: In 40" Sheetfeds, Hesitation Tempers Keen Interest

Prospective press buyers may be running busy plants but they're wary about the economy. The bottom line for now: concern shows and commitment slows.

By Debora Toth, Project Editor -- graphic arts online, 2/1/2001

While sheetfed print production remains robust, many printing managers-cautiously watching the eroding economy and fluctuating interest rates-have begun to quell their enthusiasm about purchasing new press units, including the 40" machine. Although press manufacturers are far from having a dismal season, many report that their sales of 40" sheetfeds, the mainstay of the equipment market, are weaker than in years past.

Supporting this finding is a Marketscan study produced in October by NPES The Association for Suppliers of Printing, Publishing and Converting Technologies. According to the study, sheetfed offset press unit shipments were very strong in 1999, with unit sales up 30% over the previous year and revenues up nearly 20%. The reasons given: a continuing robust economy in 1999, very strong advertising conditions, a healthy process color printing arena, and a press life cycle conducive to replacements.

However, a number of market watchers believe that when total figures are in for 2000, revenues for sheetfed presses will have declined by about 10% compared to 1999, a situation mainly attributable to buyer concerns about a softening economy. On the other hand, the report states, continuing development of further press production efficiencies, tempered by a weakening economic environment, will lead to a moderating of this decline this year, to between 2% and 4%.

Busy, but hesitant

"Sheetfed printers are generating plenty of business," reports John Dowey, vice president of Speedmaster marketing for Heidelberg USA. "But today they're not that quick to reinvest in new equipment. We had quite a good month in December and we've seen that printers are looking to maximize their investment. But whereas they used to spend lavishly for every bell and whistle on a Speedmaster, now they're not getting all the features. It's almost like automation a la carte: printers are looking for ways to spend their money ever more effectively."

There are some bright spots, however. Dowey says that Heidelberg is on schedule to install its very first 10-color straight (nonperfecting) 40 Speedmaster 102 this summer. "The printer taking delivery, which doesn't want to be identified yet, is a real market leader," says Dowey. "This press will definitely help it to differentiate itself."

Interest rates rise and fall

As in other areas of the economy, printers are keenly watching interest rate hikes and decreases, which have a major impact on large sheetfed press orders.

"The market certainly quieted down in the fall," remarks Martin Petersen, Akiyama's marketing and product manager. "I think it was because of higher interest rates and printers' concerns over the economy. But now that there's been a reduction in interest rates, confidence levels may rise and we could see a resurgence in sales."

Adds Jerry Manzi, director of sales in the central region for MAN Roland, "The 40 sheetfed press market will always be strong because it's so big. I think that printers simply exhaled a little bit last quarter. And now that the Fed has lowered interest rates, we see a strong year ahead."

Not feeling the pinch

Some manufacturers are not feeling the effects of a slowdown. "Since the Graph Expo show in October, we've been picking up a substantial number of new sheetfed press accounts for our 41 Rapida 105, particularly in the commercial segment," says Bob McKinney, KBA's director of marketing.

He adds, "Some of these new 41 press installations include Acme Printing Company [Des Moines, Iowa], Eva-Tone Inc. [Clearwater, Fla.], MacDonald & Evans [Braintree, Mass.], Merrill/Daniels [Everett, Mass.], and Spectra Print Corporation [Stevens Point, Wis.].

"We were very pleased with the show and found that the attendees led to new business. We were concerned when the Fed raised interest rates but so far it has not materialized into a slowdown for our company's sales at all."

Buyers take advantage

Some printers are taking advantage of their newfound leverage to make better deals. Rapid Impressions, a Broadview, Ill. commercial printer, was planning to purchase a 28 sheetfed press to replace an older six-color 26 machine. But after talking to a number of manufacturers, vice president Jim Kosowski found that Rapid Impressions could purchase a 40 Roland 700 from MAN Roland with good financial terms.

"Our niche is short-run color for associations and ad agencies in the Chicago area," says Kosowski. "We were looking for another half-size press because our workload could support it. However, to produce short-run jobs--typically 5,000 to 15,000 sheets--we needed a new automated press because the old one was almost completely manual. We knew we needed to lower our operating costs and increase our throughput."

The 21-employee shop took delivery of the Roland 700 in September 2000. Within four weeks, the press was fully operational. In addition to the new Roland 700, Rapid Impressions operates a two-color Heidelberg, a four-color Quickmaster DI, and a two-color Quickmaster.

"Our new 700 is twice as big and runs twice as fast as our older half-size press," says Kosowski. "Now we have the opportunity to produce longer-run jobs. The machine has opened new markets for us. We knew we eventually wanted to get a 40 press; with luck and good timing, we got it sooner than planned."

Adding two presses

A few years ago, BOPI (Bloomington Offset Process Inc.), a sheetfed and web commercial printer located in Bloomington, Ill., wanted to move up from a half-size press to a full 40 model. Thus, it replaced a 15-year-old 28 sheetfed with a six-color Roland 700 with coater.

"We installed a six-color Roland 700 perfector in June 1998," says Tom Mercier, president of BOPI. "But our sales force was marketing our four-, five-, and six-color capabilities, which meant that the perfector press was overbooked. The older half-size couldn't handle the volume."

Nor could the 28 machine handle the rising quality levels offered at BOPI. The 100-employee firm prides itself on high-quality coffee table books and ad agency pieces utilizing frequency modulated screening, Pantone Hexachrome, and stochastic screening.

BPOI recently added a new Roland 700, gaining, in the purchase, the machine's ability to print on 40-point board. This capability makes production of packaging jobs a real possibility.

"Quality, versatility, added capacity--we got all that and then some," says Mercier. "But the real advantage that we gained from the new press was its speed. We cut makeready in half and doubled our running speed, especially if we factor in the coating step. Today our two Roland 700s produce two-thirds of our business."

Gaining automation

Not everybody is buying a 40 press to upgrade from a half-size format; many are replacing older machines, simply because they're less automated. Cohber Press, a 157-employee high-end commercial printer located in Rochester, N.Y., found itself with the need to replace a 10-year-old 40 six-color.

"A combination of factors led to our decision to install an eight-color Heidelberg Speedmaster 102 CD equipped with CoCure in October 2000," says Eric Webber, president of Cohber Press. "While the six-color model we had was a classic, we had outgrown it. We needed the automation, flexibility, and additional units to expand our high-end general commercial work in the Northeast. The 102 CD gives us the flexibility to print packaging work as well."

Cohber Press, which prides itself on being a progressive printer, was one of the first to install computer-to-plate (CTP) production in 1996 and adopted aqueous coating earlier than most printers. "We feel that CoCure [a hybrid, on-press UV curing system from Grafix North America] will be as big as aqueous coating," says Webber. "We've been testing and working with it, and now we're one of a few printers that offer the process. The benefit of CoCure is that jobs go through the press quickly. It reduces cycle and drying time, and the sheets are coming off dry."

In addition to its new 102 CD press, Cohber Press operates a stable of Heidelberg presses, including a nearly new 40 10-color perfector, a six-color 40 CD with coater, and a Speedmaster 72 six-color with coater.

Looking for an edge

Known as the largest commercial printer in Madison, Wis., Straus Printing Co., an 85-employee, $14 million firm, decided it needed a new press with more automation than its three- and five-year old 26 and 40 presses. In December 1999, Straus installed a six-color 40 Model 3F press from Mitsubishi.

"We wanted to upgrade our technology," says Mike Elliott, vice president of sales and marketing for Straus. "In our marketplace, we're seen as leaders; for example, we installed CTP six years ago. We also do a lot of testing to achieve consistency and quality in our press jobs. One of our competitors had purchased a used press, so we were looking for a new machine that would become our workhorse."

Straus, established in 1920, serves corporate, retail, industrial, and agency customers, producing communication materials, annual reports, catalogs, and brochures, as well as text pages and covers for books, all produced on its sheetfed presses and seven-unit, half-size heatset web press.

"For our agency work, we print jobs with lots of heavy coverage," says Elliott, "and the new Mitsubishi press really delivers: it lays down a smooth coat and its Delta dampening system helps us control hickeys."

Like Cohber Press, Straus had its new machine equipped with the CoCure system, one of only a few dozen in the country. "We print a lot of book covers that need to be coated, so we've always offered in-line UV and aqueous coating," says Elliott. "But this new CoCure technology is excellent. It provides a heavier coating and has given our company a whole new dimension. We plan to add a second CoCure system soon."

Already, the 3F press has taken on half of the plant's total workload, plus its capabilities have allowed Straus Printing to take on new work. "Amazingly, we've transferred a lot of our 26 work to the new 40 Mitsubishi because of its efficiencies," says Elliott. "The primary reason is makeready: it takes half the time and half the amount of stock. Also, because it can lay down heavy ink coverage, we put some jobs on the press that really aren't otherwise suited to the 40 format."

Finally, Elliott adds, by having this combination of press sizes and capabilities, jobs can be quoted several ways since different customers want a good price, quick turnaround, or heavy coverage.

Meeting design challenges

As graphic designers continue to create unique and multicolored projects, printers find themselves needing to keep up. Many are turning to additional press units for specialized colors and coatings. One such printer is MacDonald & Evans, a commercial printer.

"When I was considering buying a new press, I didn't want to run short of printing units," says Frank Piazza, president of MacDonald & Evans. "An eight-color 40 press was a must. It would allow us to produce more work."

Piazza chose an eight-color KBA Rapida 105.

"I thought the press would improve our productivity and help us increase our business," he says, "but it has done a lot more than that. It has opened new markets for us and boosted our bottom line by 20% in one year. It also gives us the ability to print on a variety of stock; we can easily print from 50-lb. offset up to 32-point board."

The firm's clientele, which is mainly located in the Northeast, includes the high-tech industry, business consumable firms, producers of fine art reproductions, and advertising agencies.

To maintain its competitive edge, the Massachusetts printer sought a 40 press with automation. "Makeready time is unbelievably fast on the Rapida 105," says Piazza. "An operator can make changes right from the console. For example, if we have ghosting, we can fix the problem at the console. If we want to change the inking system, the operator can change it at the console. And if we want to experiment with a job when it's on press, we can tweak the adjustments at the console."

Business for MacDonald & Evans remains healthy. Piazza predicts that his firm will grow from 15% to 20% this year. To maintain his plant's productivity and growth rate, Piazza says, the company will be adding another eight-color Rapida 105 during the year.

Two-color model

Servicing another area of the 40 sheetfed market is Sakurai U.S.A., which markets a 40 two-color perfector press.

"This press model fills a niche not being served by any other manufacturer," says Mike Grego, Sakurai's service manager. "We find that it is perfect for the book market, which needs an automated, fully convertible one-over-one press. While this particular market segment is shrinking when it comes to expansion, our press is being used to replace older, existing equipment that is not automated."

Meanwhile, at Akiyama, plans are underway this year to add new electronics to the Bestech 40, which is similar to its J Print press. "We're adding a Windows NT platform to our computer console," explains Martin Petersen. "We'll be able to develop a closed-loop system and transfer the ink key information directly to the press."