“One successful customer, lures future customers”

Lois Lebegue, Oscar Planas and Bhalchandra Nikumb of Kodak in conversation with Noel D'cunha and Rushikesh Aravkar of PrintWeek India. The three musketeers at Kodak discuss inkjet and Nexpress, and share insights about a flexo press and the CTP market; plus new strategies that will put put Kodak back on track as a profitable, sustainable company.

28 Feb 2013 | By Noel D'Cunha & Rushikesh Aravkar

PrintWeek India (PWI): What is Kodak showing at PrintPack India 2013? 
Lois Lebegue (LL): Basically, most of the machines we are selling are already well-placed in the market. So if a customer is looking for specific features, we are taking them to the nearest demo-centres. We interact with the customer to understand their need and also offer them the chance to interact with our other customers. Only then we enter into the business aspects. Kodak is a brand, so if anybody comes to our stall, they would know about our offerings. We always say, let’s fine-tune your needs before talking about business propositions.

PWI: In India, many do not know Kodak is the pioneer of production inkjet systems and that your involvement dates back to the 1970s. First with Versamark, then the Prosper based on the Kodak Stream inkjet technology. You have a healthy number of Versamarks in India. Can you tell us about your Versamark success and how you’d build on the first Prosper 1000 installation?
LL: You are right that we are doing inkjet for the last 40 years. Within those 40 years, we have learned a lot by trying, succeeding and we have developed products that went from very slow to high to very efficient. You don’t improvise on inkjet technology you learn the hard way to become a strong leader in inkjet. We are enjoying 40 years of inkjet with thousands of installations around the world on which we leverage the new generation all the time.

PWI: Which direction is the market movement?
LL: Today what we see is that the market is moving towards two directions. One direction is hybrid printing where we can fix inkjet heads on packaging systems or offset presses or conveyor lines, and we imprint on a small section of something that has been already printed on a different printing technology, for instance, offset. This has been quite popular in Asia. Last year, in Asia we installed around 200 such systems. So, that’s a big success for applications of packaging, transpromo and mailers. If you look at Kodak overall, we are the only company in the world in this field that can do plates, workflow, CTP, proofing and every kind of digital print, electrophotography and inkjet - multiple form of inkjets, colour or mono, cut-sheet or roll-fed.

PWI: Now you have installed the first Prosper 1000.
LL: The other big successes we have are the Prosper models, which have been printing over 150mn sheets every month in Asia. These used to print books and collaterals. We are very careful where we install the press, as we want to install them only where the customer has a high volume to realise its potential. We continue to invest a lot of money in R&D, associations with several known brands to integrate our inkjet heads to their presses. 

PWI: What do you think about the traditional book printing segment in India?
LL: There are some small printers who are doing job-work of publishers and that will continue. Short-term volume printers are moving towards digital. But they are not doing this after discarding their offset presses; they are investing in digital to run the machine parallel to the offset presses.

PWI: How do you position a Prosper in the Indian market?
LL: It took us four years to explain the technology to the customer; the various features and possibilities of the Prosper. It was a case of solution selling and not box selling. The customer didn’t automatically migrate from web offset to inkjet. He first moved to sheetfed then tested our inkjet and finally moved to the hybrid machine.

PWI: Do you see a market for Prosper 5000 in India?
LL: The machine is already available in Asia and we are hopeful to find a demand for it very soon. However, before that, we need to get our first breakthrough. There is still lot of growth for traditional offset in India. Last year, the rupee devaluation did hamper the sales, but the market largely has been receptive. The positive literacy rate will have an impact on the industry including the advent of several new newspaper editions and magazine titles.

PWI: Kodak has announced the signing of four orders for its NexPress. How do you entice customers to invest?
LL: Customers have been coming to us after a careful scrutiny of the NexPress’ specifications. It facilitates the printers to offer several new applications using the press. You have the option of fifth station, security and several others. It is a heavy-duty production press that has lot more to offer than competing presses.

PWI: Is your business models based on a special finance or easy payment modules?
LL: We call that business development. We expose them to various applications using our technology. The reason to do this exercise is that it enables cross-pollination. Some adapt, others discard. 
Bhalchandra Nikumb: I believe NexPress is suitable for both commercial and the photo printing space. In photo printing, we are pretty strong. The customers believe that we will have a professional relationship and have a brand image in the market. We see synergy in this market. Some of the photo-printers are thinking about migrating to card printing and allied jobs. One successful customer, lures in several future customers 

PWI: What about the ROI?
LL: If you look at the digital press market in India, some of the printers would be printing less than 15,000 A3 sheets, while others have reached over a million A3 sheets. It all depends on what model they adopt – very short run or short run. Some of the people are using it for printing selected jobs only. The machine can serve both the segments.

PWI: What is project Galaxy?
LL: We are working on a project called Galaxy, where we are talking to schools for school photography and then create an album. Another category in this project is where we would be doing a wedding album. We are offering NexPress to those photographers who have been using silver halide printing. This would be a similar approach to that of Dscoop. We have started this with India and then we will move to other nations; it’s fascinating and exciting to see India leading the way.

PWI: You call Flexcel a path-breaking technology. Why have we seen very few installations in India in spite of the fact that the label industry is in the ascendancy?
BN: When you look at Flexcel technology, there are seven units in India. But when you look at the type of technology we have and when this machine sits at a service bureau, they start serving a number of printers.

PWI: Many label printers we met say that having pre-press in-house would be the best thing, but cost is an issue?
Oscar Planas (OP): Yes, it is an investment, because bringing pre-press in-house means investment in machinery, people, computing, processing of images and the like. But it would be an interesting investment because it will bring down the cost of production.

PWI: How so?
OP: The technology now supports management of colour, where you can take a five-colour image, separate it into four colours and make plates. Thus, instead of five plates, you need to make only four plates, thus reducing the production cost. That saving to the label printing is less mounting, ink, plate and mounting man hours. The technology adds to value but requires creativity on the label side. The volume of labels printers in India print is still very low to justify that kind of investment.
LL: Packaging is very important segment for Kodak. We can debate about how long newspapers will survive but packaging’s future need not be debated. You can’t give your kids a cereal wrapped in iPad. Will India become a superpower in packaging? We believe that a lot of big investments can be made in the country to create many big packaging powerhouses. We are serious about this segment but it will take time to grow.

PWI: Are there fewer number of Flexcel in China, too?
BN: Actually, India is leading in the number of Flexcel in trade-shops as compared to China. India is one of our cornerstones in Asia. Typically, you see that once a technology is accepted in one or two trade-shops, the trend picks up pace. It is accelerating right now in India and Indonesia. Once companies spot the trend, brand owners realise the potential this technology holds. China was very focused on gravure, but now we see a change.

PWI: Kodak seems to be struggling in the commercial CTP plate market in India in 2012. There is an obstacle you have to overcome. How do you think Kodak will overcome it in India?
BN: Yes, the overall market in 2012 was low. In thermal, we could maintain the market share. I  believe 2013 will be better, and that we will recover. We saw some good success in the newspaper space. In terms of plate consumption, we have been successful in sustaining the growth rate. Of course, we had some impact in plate consumption due to the anti-dumping duty, but the market is recovering from it.

PWI: We hear a lot about ‘a changing world’, disruptors emerging and making a mark in print industry. Is that a boon for the print industry? How is Kodak preparing to meet the challenge?
LL: Depends on what these disruptions are. Asia Pacific continues to grow, especially India, which has been growing in double digits. Segments like packaging and book publishing will see disruption from e-reading. It is clear that it is creating a new demand for print-on-demand. But we see it as an opportunity. The print industry should see this as a phoenix, and capitalise on it.

PWI: The threat of internet?
LL: A very big population is going to the internet, and a good share of those have been shopping, thus, creating more opportunities for packaging, direct mailers, labels, collaterals and what not. There are disruptions in the market, but people with a vision and the capacity will emerge. We expect to see new players coming in. We see new measures to fight counterfeiting by using variable barcodes on packaging. There is more and more application, and they require new technology and services.

PWI: Can you give us any other hints about Kodak’s plans for 2013?
LL: Our focus for 2013 is really to work with our team and channel partners to better understand their future. It’s really about being a resource, partner...to help the customer re-invent better applications. We will strive to help our customers build a better business. We have some solutions, for rest we have to partner. Several companies are busy selling one item at one price but they are not concerned to understand the customers need.

PWI: And finally, Kodak has said that the sale and licensing of its digital imaging patents for net proceeds of $527 million will put it back on track as a profitable, sustainable company. What have you based this premise on?
LL: The patents associated with the digital camera business is one part of it. Basically what we are doing is that we are getting extremely focused on commercial print, packaging and functional printing and solutions to enterprises. This redesigned product line is to emerge from the Chapter 11 filed in US. Part of it is to sell off the digital imaging patents, divisions of document scanners and the consumer paper and film. And that will be in the middle of this year. We have been able to do that through Chapter 11 protection in the USA, and we have been able to clean up the legacy cost. We have been doing this via exit financing and obviously securing USD 530mn from 10% of our portfolio of patents in digital imaging. We are here with new and fresh products and will work towards being the best partner of the printers to grow their business.

(Lois Lebegue is managing director for Asia Pacific Region at Eastman Kodak Company; Oscar Planas is managing director for INSEA cluster at Kodak (Thailand); and Bhalchandra Nikumb is managing director at Kodak India)