Guy Gecht’s Commandment to achieve one billion for EFI - The Noel D'Cunha Sunday Column

EFI’s USD 140mn investment in Italian textile ink and kit manufacturer Reggiani Macchine, and Israeli wide-format manufacturer Matan was completed on 1 July. Speaking to PrintWeek India on the last day of Pamex, chief executive of EFI, Guy Gecht predicts the business is on track – and all set to achieve the USD 1bn sales target by 2016. EFI has reported record revenue for Q3 of this year - USD 228.7m - a rise of 16% compared with Q3 of 2014 when sales were USD 197.7m. Gecht said, 

24 Dec 2015 | By Noel D'Cunha

Noel D’Cunha (ND): They say there are two types of companies in the world market today. Those who have been purchased by EFI, and those which EFI shall purchase. The past 16 months has seen some nifty acquisitions. Your view?
Guy Gecht: Every time we buy a company, there are more than 20 companies we look at before deciding to move or not to move forward. And of course, we do not say which these companies are, but announce the one that got through with the deal. ... Doing business is tough, the industry is tougher as the customers are demanding more and it's difficult to be a standalone company. Lot of companies have figured out it’s better to be with EFI, and get to more customers. They can be more successful and can have a much better reach.
ND: How is all this enhancing the EFI brand?
GG: From our perspective, we can reach out to only small companies such as these, who have the same passion for printing, as we have. They have a bit more functionality and resources that can help EFI to bring those resources to our customers. We believe that if a company can grow organically they also get the permission to acquire. If you are shrinking and cutting then you are not able to offset with acquisitions. But because we are growing more organically we think we can accelerate with these acquisitions.
ND: Does this explain your participation – and your presence - at Pamex?
GG: We are making big investment in our businesses in India. We have more products to bring into the market and more resources, and our presence at Pamex was two-fold. One: educate our customers about the investments we have done, know more about EFI; and second, pull the attention of our customer to the resources and products we showcased around the booth. The feedback has been really good.
ND: What is the key point to take away from EFI, as we come to the end of 2015?
GG: We like to play orphans – in other words, we try to make people more successful, our customers grow. We have realised that the only way for us to grow is to make our customers grow. There’s a tendency among the people to go on the defensive – to cut cost, cut spending, doing less, closing locations, making their customers to clean costs, but not find new opportunities. We try to break this defensive mood of the people.
ND: EFI’s USD140m investment in Italian textile ink and kit manufacturer Reggiani Macchine and Israeli wide-format manufacturer Matan, was completed on 1 July 2015. A new space for EFI?
GG: This year we have entered into a new and interesting area – the world of fabrics, with the acquisition of Reggiani. I think the combination of EFI and Reggiani is tremendous. It’s about soft signage. There’s a lot of decoration and signage opportunities outside the purview of fashion.
ND: Still bullish about Fiery?
GG: Digital printing is gaining a firm footing in the print business. We have seen unbelievable growth in the Fiery business – over 1.8mn installations worldwide. When a customer buys a Fiery, they never go back to something that is not as fast and as comprehensive or does not have a good colour management tool. We see it in our growth of our software, in the inkjet business – like the Vutek business. This is the year where we are seeing digital printing move towards an undeniable mainstream direction that gets us much better business.
ND: How much will the launch of a product like Xerox Freeflow affect EFI’s Fiery business?
GG: Let me tell you, we have three years of tremendous growth of the Fiery. We have actually outpaced the goals of the entire digital print industry. The reasons are: more and more of our partners and customers are buying Fiery. When someone buys a Fiery, very rarely has anyone moved to another front-end solution. And the reason is: if you are investing in digital printing, it makes no sense not to have the fastest, the best colour management, the best workflow, the most connected DFE. The Fiery becomes very relevant. The customers do their homework and they should, when they pick a Fiery against the alternatives.
ND: But Freeflow will also evolve over a period of time ...
GG: Of course. But for us, the DFE, the digital front-end, is what we do for a living. Xerox care about the customers, and they do that by providing happy solutions. When they sell the EFI solutions, they are successful. At EFI, DFE we are evolving so much faster than anything else. In fact, in the Xerox partnership, they are selling a lot more Fiery units today than they sold two or three years ago. Our partnership with Xerox is very strong, and they are doing more projects with us.
ND: Since both the front-end RIPs are developed in India, one in Bengaluru (EFI) and one in Chennai (Xerox), how do you assess the position of India in terms of software development for the print industry?
GG: See, at the end of the day, the print industry is not different from the other industries. You want to have the software and the best engineers in the industry and most passionate people, people committed to quality. So there will be more and more features, year after year. During the launch of the Apple iPhone 4, people were very happy with it. Of course, they would not be as happy, if two years later, it’s the same phone. They expect the Apple to come up with an iPhone 5, an iPhone 6 and so on. And the people want to know if they are doing it. The same truism applies for the printing industry. If someone is buying the EFI unit, they really want to know the company is committed to do the next one and the next one and continue to invest.

EFI is on track to achieve its USD one billion sales target by 2016

EFI has revealed the company plans to launch a new EFI Reggiani product at the “Drupa of textile”, ITMA

EFI acquired Shuttleworth

EFI acquired Reggiani Macchine and Matan and extends its share of the superwide-format display graphics market

EFI secured a multimillion-dollar deal, centred on its cloud-based MIS PrintSmith Vision, with global quick print franchise Snap Franchising

EFI growth driven by Fiery, Vutek and Jetrion

ND: So what is the cycle for EFI’s next big one?
GG: We do a lot of upgrades that are free to the customers, and it’s available on the web. The most popular application in the print industry is the Komaru workstation and that is free to all our EFI customers. When we do a new version, we put it into the web. We normally see something like 50,000 downloads in the first two days. There is 100,000 downloads in like 10 days. There is no application in the world, in our industry, that gets this kind of download numbers so quickly.
Another thing at EFI is that we develop a lot of education, free seminars, free webinars. You go online and you will learn a lot of things. EFI is investing and doing a lot in educating the customers in order to realise the full potential of the product. If you feel like learning something, even during midnight, you can do it.
ND: Talking about midnight learning, during the last Connect meet you called up Benny Landa in the middle of the night, and started a discussion. What’s the inside information on the Landa project?
GG: The partnership is fantastic. The Fiery we are building for Landa, who in turn is building an extremely fast high-quality digital press, has been very challenging. Right now I can only tell you that we have put in a very strong focused effort to build the Fiery. I am happy to share that every time Benny talks about the Fiery, he tells me how impressed he is with it. Once Benny Landa starts to shape the Nanographic digital presses, I think the end customers will be very happy with EFI and its combination.
ND: So EFI and Benny Landa are going to create their own type of magic at Drupa 2016?
GG: We will have a lot to show in our booth as well as our partners’ booth, including Landa's. Actually, it so happens that EFI and Landa are neighbours at Drupa. We are in the same hall. You are going to see a tremendous amount of Fiery at Landa’s booth and our booth.
ND: Since, you are a keen technology watcher, what kind of technology should the Indian visitor at Drupa hedge his bets on?
GG: There’s going to be a lot of noise at Drupa. There’s going to be lot of announcements. Many companies other than EFI are going to have new products and new launches. Customers will have choices, which is good. But the customers need to figure out on its practicability. They should look at which vendor is really investing? Who will you need in the near future? Also, look at who is thinking about the success of its customers?
ND: Your advice to the printing industry?
GG: Make sure you are advancing your business and make sure what is good for your business. The worst thing you can do is stand still. If you make no changes to your business, you are almost guaranteed that your business is going to be tougher and tougher by the day, until it will no longer survive. You have to move where the opportunities are and opportunities are always changing. Technology holds the key to let you move to new opportunities.
ND: When does EFI hit the one-billion dollar mark?
GG: I am committed to it, we are committed to it. We say that one option is we get there and the second is, there is no option.

A month ago on your Twitter timeline, a photo of a letter was posted. The letter was about your personally welcoming the 3000th employee to the EFI fold. Do you follow this for every employee to joins EFI?
That was a joke. At EFI, we all work very hard. Sometimes you need a little bit of humour. From the management perspective I want to make sure that we make fun of ourselves every time. We make movies about EFI employees every year. But on a serious note, it shows that at EFI we have 3000 employees. While all the companies are cutting staff strength, at EFI we are adding. That’s a remarkable achievement.

EFI was supposed to buy Xaar. What happened?
That was a rumour. Xaar is a wonderful company, but it’s core competence is printhead manufacturing. EFI’s strategy is not to buy printhead companies, but the best heads for its applications.

EFI will be opening an APAC demo centre in Shanghai next year. 
Shanghai is central to a lot of our customers, because China is our second largest market. It’s easier for customers in Japan or Korea to visit Shanghai which is a really big hub.

EFI in India 
India will grow tremendously, and at some point we may need a demo centre in India, too. Actually, India is the hub of development. We will be doing much more than what I can see today. The team in India, under the leadership of Sam Gulve, is much more involved with the local market, than say two or three years ago.