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Epitome of digital predicts the future

22 September 2017

Konica Minolta Business Solutions India’s managing director Daisuke Mori and his colleagues Yoshinori Koide and Manish Gupta speak to Ramu Ramanathan about the company’s philosophy in India

km1 Daisuke Mori (l), Yoshinori Koide and Manish Gupta of Konical Minolta
Ramu Ramanathan (RR): How long have you been associated with Konica Minolta? 
Daisuke Mori (DM): I joined the company in 1992. So it has been 25 years at a single company with nine years in China, three years in Singapore, one in Indonesia and the rest of the years in Japan.
 
RR: The average tenure of the Japanese CEO in India is three years… 
DM: There is no such rule of an average tenure that Konica Minolta follows. India is a vast and growing economy and the tenure of three years is a short amount of time for any individual to hold a grasp on the print market in India. I was at Konica Minolta in Singapore before I came to Gurgaon, now Gurugram. Konica Minolta appoints the CEO based on the market situations and how a particular individual can act as a catalyst for the company’s business in the country.
 
RR: The best Konica Minolta device according to a recent PrintWeek India survey is Bizhub Press C1085 ... Please tell us about the manufacturing evolution of this device and what type of factory production is invested in it?
DM: Bizhub Press C1085 is the second generation machine in the mid-production segment. It is built upon the success of the previous generation machine which was well accepted. The product design is done by Konica Minolta in Japan whereas the manufacturing of the machine happens at the Konica Minolta factory in China. 
Yoshinori Koide (YK): Two years ago we came up with a dedicated research centre in Japan that is well equipped to test the machine under various environmental conditions through simulation. This enables us to understand the functioning of the machine under the weather conditions of various countries across the globe. This is apart from the bigger R&D centre that we have for the technical components of Bizhub Press C1085.
 
RR: Do you see Konica Minolta gaining a similar kind of footprint in the label and packaging segment of India in the next five to ten years? 
DM: We already have our presence in labels and packaging in a very small way with our Bizhub presses. Konica Minolta considers this as future growth potential segment and we have launched Bizhub Press c71CF for labels and Accurio Jet KM-1 for commercial and packaging.
YK: Currently all our machines carry a brand name – Bizhub. Going forward this brand name will be replaced with Accurio. All the software solutions will also fall under the umbrella of Accurio. The equipment for electrophotography will be called Accurio Press and Accurio Jet will be for inkjet technology. 
 
RR: How soon do you feel will we see the transition towards continuous inkjet? Especially for a market like India which is highly sensitive to the cost parameters in terms of the production as well the price of the unit…
YK: I don’t think there will be a complete transition from electrophotography to inkjet. There is a need for both these technologies. We started our journey with electrophotography which is a big market opportunity especially in India. There will be a crossing point between the two technologies but not the complete transition. Inkjet in India is at a very early stage whereas electrophotography has been here for much longer. We have been present in the electrophotography segment of India for the over past five years. 
 
RR: When do you think inkjet will make further inroads and get adopted on a larger scale than where it stands currently?
YK: By 2020. Inkjet will be more popular not only in India but also around the world. That’s where we believe the market is heading. The adoption of inkjet technology will happen slowly and gradually and it will gain momentum once the print jobs being done on traditional offset get shifted to inkjet. India is a high potential market and we are well aware of this fact. We are in the process of finding the right customer for Accurio Jet KM-1 in India and hopefully, we will see the first unit installed in the coming few months. 
 
RR: Who according to you fits the definition of a ‘right customer’ for Accurio Jet KM-1 in India? 
YK: For us, the ideal customer would be the one who is doing hybrid applications both in terms of conventional short runs and digital. The potential of the machine is highly dependent on the customer who will be using it. He may find a new application altogether with this machine or he may find a new demand in an area we cannot even imagine.
 
RR: Where do you see the barrier coming in? Cap cost (capitalised cost) or the OpEx (operational expenditure)?
YK: Both. Although I personally think the bigger barrier is the mentality of the customer who is going to invest in a new technology. It has always been the case wherein the first one to adopt the new technology encounters the challenging aspects related to it. Once the few machines get installed then they will act as a guidebook in terms of the configuration as well as the costs. It is our responsibility as a manufacturer to ensure that the first few customers are successful in adopting the new technology.
DM: When it comes to costs, India is the toughest market. The huge potential that it holds means that more manufacturers are fighting for the same space. Add to this the cost mentality and the negotiating powers of an Indian business person and it becomes a challenging market to cater to.
 
RR: Konica Minolta has pioneered the low to mid segment production segment with devices capable of producing on the 13x39 inch or banner printing with partners like HCL Technologies and KMI, and then Monotech, Systems who have built the customer base. What is Konica Minolta’s strategy for India? Are you looking at further expanding the base or are you looking at profits? 
DM: We are expanding our customer base and not just focussing on profits. The important thing for us is to provide customer satisfaction and enable the customers to grow their business. We intend to expand our base geographically across the whole country.
 
RR: What was it in the initial phase in 2008 that made Konica Minolta such a big brand? Was it the aggressive approach or additional USP of banner printing that provided this advantage?
YK: There were a few things that we did right. One, it was a good timing for us, since in 2008, the Indian customers were in need of digital printers with good input and Konica Minolta was able to provide such a product. Second, was the pricing of the product which was well accepted by the customers and the marketing strategies with which we were spot-on. Third, we chose the right partners in Monotech Systems, KMI Business Technologies, HCL Infosystems and TechNova Imaging Systems. We are not simply looking for our own success. Right from our partners to our customers everyone has to be successful. We have to be successful as a team. That is the Japanese way of doing things. We were relatively late in entering the digital space and yet we are the market leaders within a span of five years of operations. This is because all of us, including the partners and the customers, have been equally successful.
 
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Mori: "I don't think there will be a complete transition from electrophotography to inkjet"
RR: When you speak about your customers, how many of your customers were traditionally from the print segment and how many of them were new customers who were untapped and wanted to make a foray into printing? 
Manish Gupta (MG): About 50% of the customers that we have added every year are new customers. These are customers from various segments like graphic arts and photography and Konica Minolta has sold close to 50% of the machines on a yearly basis to first time digital users.
 
RR: What about the temperature reduction on these machines? Is it good for printing?
MG: The reduction in temperature has improved the media flexibility wherein some of the substrates which are plastic-based or vinyl-based can now be processed using digital technology. It adds to more options for our customers. Lesser temperature also means lesser use of electricity. 
 
RR: After capturing a majority of the market in the entry level and low-end segment, Konica Minolta focussed on the mid-market and replicated the selling model with the Bizhub Press C8000 and C1085. I recall the Bizhub Press C8000 was a big hit because it had a metal chassis which could withstand the duty cycle ... While the Bizhub Press C1085 which came as an upgrade of the Bizhub Press C8000 is a very dependable workhorse ... Why did the further upgraded Bizhub Press C1100 not encounter the same success? Was it because of a compromise on some of the parameters? 
YK: We don’t see Bizhub Press C1100 as unsuccessful and have sold a fairly good number of machines in India. Bizhub Press C8000 is the first generation machine with metal chassis. Its upgrade Bizhub Press C1085 and then C1100 belong to the same family of machines. Both of them had metal chassis. The difference between the two, apart from the speed, is the change in fusing method. Bizhub Press C8000 was utilising dual fuser. After the feedback from our customers and some R&D at our end we changed the dual fuser to single fuser. This led to an increase in the speed and productivity. In terms of applications both Bizhub Press C1085 with 85ppm speed and C1100 with 100ppm speed are the same.
 
RR: Initially, the high volume market in India shifted to Bizhub Press C1100 for its lowest cost click. Was this a case of clever pricing? Or smart selling?
MG: We approached our customers with the view of making the business viable with Bizhub Press C1100 and chalked out the model of return on investment without any ambiguity. I think that was our basic strategy.  We tried to understand the processes of our customers and made an assessment of the volume of printed jobs that could be shifted to Bizhub Press C1100. The customer could continue to print the large runs on offset whereas the short runs could be shifted to digital. Apart from that we also suggested the kind of applications that can be added to the existing runs thus enabling our customer to provide more value to his customer as well as find new customers for the digital printing jobs. 
 
RR: Konica Minolta penetrated the photo segment with great success. What is the market feedback from the photo album segment for Bizhub Press C70hc series? Has it worked as well as the Bizhub Press C71hc? Also, if you could tell us about the high-chroma series in terms of what it does and its capabilities…
MG: High-chroma, as the name suggests, increases the chromatic range of the toners. This means an extended gamut that is closer to sRGB than that of conventional CMYK toners. The cyan and magenta toners are similar to light cyan and light magenta and that increases the CMYK gamut. Colours can be printed virtually as they are displayed for example on a calibrated monitor. The printing process continues to remain CMYK but the results will be close to sRGB. Photo printing is one of the applications that utilises traditional sRGB process and this had been identified by us when we had begun our operations in India. In terms of the series of machines, Bizhub Press C71hc is an improvement over C70hc with new toner and improved productivity on the engine as well as the improved processing capabilities. The feel of toner and the height of lamination visible on the printed photos have reduced in Bizhub Press C71hc. 
 
RR: What would be the number in terms of the machines sold for both Bizhub Press C70hc and C71hc?
MG: We have stopped the sale and production of Bizhub Press C70hc. Regarding Bizhub Press C71hc, we have sold around 125 devices in 2016 and it continues to remain our most acceptable machine.
 
RR: Bizhub C71cf is a replica of the C71hc, except that the label press is fitted with a winder re-winder at each end. In terms of cost, there’s a huge difference, almost five times. Given the fact that it’s an entry level kit, do you think that kind of pricing the Bizhub Press C71cf can have the same success that Bizhub Press C71hc has received?
MG: Bizhub Press C71cf still uses electrophotography. We have tied up with Miyakoshi which is a known name in the industry for providing accessories and parts of the machine that can be integrated into the machine. In terms of pricing, instead of the capital cost we are working on the ROI (return on investment) concept wherein the customers are able to make money on per square inch of labels. We compute in terms of the running metre lengths which is how the label industry also calculates. 
 
RR: Why has it been handed over to Insight Communications for the East and West India markets?
YK: Labels is a new segment for both Insight Communications and for us. Insight Communications has partnered with Screen for high volume printing and was looking for someone in the short run segment. This is where Bizhub Press C71cf comes into the picture as an entry level label press. It completes Insight Communications’ portfolio of entry level to high-end machines.
 
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Koide (l) and Gupta

RR: Accurio Jet KM-1 made a splash at Drupa 2016. My colleagues have shown me the print samples. How do you rate the samples in comparison to the FujiFilm 720 and Landa which have Samba inkjet heads from Fujifilm?

MG: On the technology front, except for the fact that Komori is the co-developer of Accurio Jet KM-1, majority of the technology process including the inkjet print heads are manufactured in-house by Konica Minolta. The device incorporates a first of its kind patented UV ink that remains in a semi liquid state before the printing process. This gets converted to liquid state and then gets transferred during the printing process. It allows immediate curing and greater post-press durability. This is the additional benefit as compared to Fujifilm 720 and Landa. The choice of substrates and media capability is higher in Accurio Jet KM-1. 
 
RR: What is the future go-to-market philosophy of Konica Minolta vis-a-vis click charges? How low is low? 
YK: So far we have been catering to the customer’s demands in terms of click charges and it has been consistently reducing. It has to stop someday as we cannot keep it reducing forever. Unless, the new GST regime makes some difference. Currently, we are unaware of how it changes anything and whether the cost of print will increase or decrease. It could also be that the introduction of new technology will bring about a change in the use of type of materials and that could lead to a change in costs by further reducing it. But with the current technology and the current machine, I don’t see the cost going down any further. 
 
RR: What is the present status of the Konica Minolta channel partners and who is handling which product in which territory? Moreover what value will each channel partner bring to the table?
DM: We have three partners for the production printing business in India and all the partners have their strengths. TechNova Imaging Systems as a channel partner functions at a pan India level for graphic arts product and is very good at selling to commercial printers. It is more aware of the strengths and the functioning of its customers due to greater accessibility and these very customers are the future users of digital technology. KMI Business Technologies has its forte in the print shop segment and HCL Infosystems is a big giant with government print shops.   
YK: We choose to partner with those companies that are able to provide a uniqueness to address various customer segments and help us reach out to as many customers as possible. Konica Minolta doesn’t have much access to the label industry and hence Insight Communications is our channel partner for East and West India markets for the label segment since they are already handling equipment related to label industry and is equally eager to gain a foothold in the label segment which is new for them. 
 
RR: What’s the update on MGI? 
YK: We are pretty satisfied with the number of MGI equipment that we have sold. In the last financial year, we sold five MGI devices which are more than our competitor in the country. MGI is even capable of doing spot-foiling digitally which is an added advantage. The capex for MGI is higher because of its capabilities, experience and hence the reluctance that it encounters in the offset space. The digital photo segment has completely accepted the machine since every page and document is a variable which is not the case with offset. In offset space, the digital machines also compete with the traditional offset-like processes and it is in a way a similar challenge as what we have for offset vs digital.
 
RR: Konica Minolta and EFI? What is status about the hardware and software integration? Is the partnership on / off?
DM: EFI is one of the most trusted partners of Konica Minolta and together we enjoy a healthy relationship. The customer’s requirement will define which platform gets integrated into the machine. It’s a choice that is given to the customer whether to opt for the Konica Minolta platform or if he has had experience with the EFI Fiery platform he could opt for it. Now the customer will even have the choice to opt for Creo platform from Kodak. 
 
RR: What are your expectations in the next 12 months from the Indian market?
DM: We have had significant growth since foundation of the company in 6 years ago and we are planning the same double digit growth for this year as well. That is a bare minimum. Other than that, with regards to Konica Minolta as a group, we are now more focussed towards workflow solutions as well and don’t just want to remain the hardware provider. 
YK: Besides new hardware, we are also introducing the complete workflow software. We have tied up with an Ahmedabad- based firm for providing web-to-print solutions to our customers. We are also coming up with cloud-based colour management solution which is called Accurio Cloud Eye through which the customer will be able to simulate same colour at multiple devices and print sites. Then there is job management software that we will come up with and Management Information System (MIS) for shopfloor management.
 
RR: Final question. How do you unwind? What do you do when you are not working?
DM: I like to travel across the globe. I would love to visit places in India like Shimla and Darjeeling. I also watch a lot of films. The Indian films that I have seen are 3 Idiots and Bahubaali, but I admire the Japanese master Hayao Miyazaki and have seen all of his animation films.
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