Print optimism grows
It has been a pretty quiet period after Drupa. And despite talk of the print armageddon, one has seen action in the pre-owned segment , which constitutes 90% share in India
21 May 2013 | By PrintWeek India
Print optimism grows
Manufacturer
Venugopal Menon, Bobst
The pre-owned market is attractive, and there are three main reasons for this. These are: lower investment can still procure good reliable equipment; many times the machine manufacturers can support in terms of spares and service for machine as old as 25 years; if someone wants a support or a backup machine, a pre-owned becomes an option.
There are two ways in which Bobst pre- owned comes into the market. One is through the dealer network with the machines in ‘as is’ condition; and the other through Bobst Direct, which are machines normally sold, fully revised and painted with warranty.
Bobst has sold more than 100 units in India. This year saw a slight dip in demand for post-press machinery as far as folding carton is concerned. Overall though, 2012 did not see as much movement as was seen in 2010 and 2011.
Yes, besides the weak rupee, easy availability of a good machine and a slowish market, one other reason for lower pre-owned sales has been that a good used machine was not availaible in the last few months as many packaging companies in Europe held their machines and did not look at trading it with new machines. But this trend is always temporary and we expect the market will be steady in 2013.
The price of the pre-owned machine depends upon the generation of the model and condition of the machine. When Bobst sells a pre-owned machine it is always with warranty and the machines are fully refurbished and painted. Our customers get full peace of mind when he gets such a machine. The price of such machines will always demand more premium than when bought ‘as is’.
It is always better to buy a machine which is still in production and has been well-maintained. The buyer can always check with the seller if the machine was maintained by a freelancer or the machine manufacturer themselves.
Does old machinery hamper productivity and quality? As far as Bobst post-press machines are concerned, I would not say the quality is hampered but yes, productivity is definitely hampered and customers have to be prepared for a productivity that is short by 30-50% when compared to new machines.
Imposing strictures on import of old machinery is a very sensitive subject. I am not sure why the Indian graphic art manufacturers are supporting it since many of the machines like sheetfed offset, automatic post-press machine for packaging, special finishing machines are not made in India yet.
For a growing market like India the buyers need to have the flexibility to import both new or pre-owned machines depending upon their production requirements, budget and business needs and I am sure that our printing fraternity is prudent enough to make the right choice befitting their business needs.
I cannot comment about the rise or fall of pre-owned market, but I feel the demand will be steady for such machines and should be more or less what it has been in the last five years for the coming years.
MANUFACTURER
Natasha Tandon, Manroland
The basic philosophy behind investment in pre-owned equipment is faster ROI for the printer due to the lower cost of acquisition of equipment. In addition, the easy availability of new generation machines, faster delivery times of the press, good print quality, higher automation available are some of the driving forces for growing and price sensitive markets like India. For new entrants, such equipment offer a lower risk proposition.
The price sensitivity of the pre-owned press buyer drives this huge market segment. Thus price is a critical factor while negotiating pre-owned equipment combined with other factors such as age and health of the press, number of impressions to date etc.
In 2012, Manroland has performed well in pre-owned segment. We have installed more than 75 pre-owned machines this year, which included six-colour plus configurations with single and double coaters. These presses are capable of producing value-added print effects that are in high demand in the packaging market. The UV presses offer another important differentiator for a printing company when catering to FMCGs.
A key factor instrumental in our success has been our after-sales support. We offer complete solutions to customers sourcing pre-owned equipment directly from Manroland such as: inspection, dismantling, installation and after sales service and spare parts support.
Additionally, being the original manufacturer we can also provide the complete service and spare part history of the press to the customer, thus making the deal more transparent.
We foresee an upsurge in demand for pre-owned printing presses, especially six-colour plus coater presses, both conventional and UV in the 3B format especially for the carton manufacturers.
There is a sentiment that pre-owned machinery hampers quality and productivity. However, with a methodical evaluation and inspection of the press, thorough analysis of the press service history and installation through certified company engineers, exhaustive and regular maintenance checks, customers can ensure the success of their investment into pre-owned equipment.
While the new equipment market in Europe has indeed slowed down in the last years resulting in lesser trade possibilities, the recession has also created a fleet of bankrupt printing companies in Europe. This has created an alternative input and sourcing channel for such pre-owned equipment into markets such as India.
We are in agreement with the stand of the Indian government to ban the import of pre-owned equipment older than five years into the country. The import of so called junk machinery hurts the productivity and efficiency of the print market, with an unhealthy competition to offer lower print costs. Several unorganised players have entered the market with very old equipment and have significantly affected the print margins offered currently. As they are able to keep the initial capital expenditure on the pre-owned equipment low, they can offer better prices than a printer who has invested in new equipment and needs to focus on a healthy ROI. A partial ban on equipment beyond a certain age limit would bring in a healthy change in the printing equipment market.
Manroland is positive about the demand for pre-owned equipment in India, as the printing industry is still growing especially in the packaging and book printing segment. We foresee a double digit growth in this sector in the next decade with greater focus on value-added presses with features such as inline coating, UV and cold foiling.
Representative for Komori
Sangam Khanna, director (Komori division), Insight Communication & Print Solutions India
Komori as a principal does not supply used machines, globally. Yes, we do install the pre-owned machines but not the ones which are very old. However, the main reason why pre-owned market exists is because of the capital cost of new kit.
We do not feel that the number of used machines will go down as the break-even on used machines is going to get tougher because new technologies will make it it difficult for the used machine buyers difficult to compete with machine customers.
But if you have to buy a used machine, get it inspected by an authorised service centre in India. Collect all the manuals and importantly the inspection certificate.
Talking about old machinery, my fear is that India has become a global junk market for used machines. Unfortunately, it may take a pre-owned machine owner to get into losses and start bleeding, for a change to take place.
My argument is simple. Why do printers sell their old machines? The answer is because they have a problem of performance. If all was honky dory, why would they sell. They have a problem and they sell the problem. We as Indian buyers buy their problems.
My view on banning import of old equipment is simple. Quality and productivity of old machines are there for everyone to see when an unproductive units close down.
If India has to outperform countries like China, then several steps must be taken. Issues which will be the deciding factors of growth are - technology changes, market trends, reduction in duty, better interest rates, better funding schemes, tax benefits and availability of power at rates.
Refurbishing machines are not an answer. We are expecting an old horse to run a race.
Representative for GUK
P Sajith, managing partner, Welbound Worldwide
Welbound has installed a number of Guk folding machines, in the recent past. Apart from these we also install Wohlenberg book-binding machines from the German manufacturer. But we do not directly sell pre-owned machinery, but enter into the picture only after the machine has reached the shop-floor where we provide services for installation, training and support.
The only feasible reason that is driving the pre-owned market according to me seems to be the cost of investment, thus providing quick returns. But it could be detrimental if the printer does not scale-up, once the returns are achieved.
From a sales perspective, 2012 was as good as 2011. But for the range of products supported by Welbound, like Guk, it is difficult to source the right configuration from the available pre-owned machines put on sale. We only handle post-press machines. Again the demand will be driven by availability of the right configuration. Globally there is a good demand for machines with specific configurations and hence you see a negligible amount of them being sold in the Indian market.
In terms of services, we offer training through our subsidiary, Welbound Technical Services (WTS), to both maintenance and operational teams for these pre-owned machines – which is something that has offered a new perspective to the printing press owner. Here the emphasis is on the quality of the end product demanded by his customers.
Our advise to the used machine buyer is to see the kit in operation before signing on the dotted line. Test runs and product samples will determine the factors to ensure a good deal. Further, get it dismantled and packed by professionals. And the installation has to happen at the hands of professionals.
Along with the cost investment, the operational costs are equally important. Efficiency of the machines and automation levels would decide the productivity, costs and quality of the printing company. This means that there will be a need of new or young machines.
That said, old machinery fails to match the efficiency of new ones, for sure.
Printer-Dealer
Asgar Sanchawala, managing director, Progressive
I entered the pre-owned market when I bought my first four-colour Komori Sprint 425 from a Mumbai-based dealer. I went through the entire import and custom process, which I found was not very difficult.
Then I went and imported my second machine, a Heidelberg MOV from UK on my own. I helped a few of my colleagues and friends to import their machines. That gave me the confidence of importing machine, which eventually became my business too.
I have installed more than 100 machines in India.
Cost of the machine is the major driver of pre-owned machinery. Old machines are available at a quarter of the price of a new machine. Speed of the new machine, which may be 35% faster than the older machines, does not necessarily compensate the cost difference of the machines. We import pre-owned machine, which are not more than 20 years old.
There is a demand for quick multi-colour jobs, which is bringing in a number of pre-owned machines into the country. Post-press machinery is certainly high on demand.
We do not offers services like refurbishing, inspection, overhauling or warranties on products. But the machines I import for my clients are self inspected, which are loaded in the containers by us. We import only the best tested machine from the European countries. We avoid machines from Asian countries.
There is no doubt that machines which are very old hamper productivity by 35% and quality by 20%. That said, I am not in favour of government’s proposed ban. Can government ban petrol because petrol is not produced in India?
We see a trends of newer machines coming into India. Demand for pre-owned machines not older than 10-12 years will grow by 25%.
Dealer
Lalit Goyal, Graphics Impex Services
We specialise in post-press equipment and the future seems upbeat. However, last year, recorded a slowdown in comparison to the trends in previous years. Let us hope that coming years hold better times.
The main reason driving the sales of pre-owed kit is the cost differential between new and used kits. ROI (return of investment) seems far off on new kit whereas used kit’s ROI seems practical and manageable. The economic slowdown in the European market has also given an indirect thrust to the used machinery market, as more and more of quality kits are now available in market at much lower and affordable prices.
Clients now want to have younger kits installed which means lot more money is required. In our case (post-press machines where amount is not normally big), I still think 80% of the buyers use their own cash flow. But whenever needed, we provide required paper work so they can get finance on the machines. Banks and NBFCs are all happy to finance these machines. In fact, they are very keen to finance any amount depending upon financial credentials of the buyer.
Customers often ignore the expertise of the seller as well as the installation support he can provide, and that’s where things can go wrong with used kits. With used kits it is not possible to give any warranties and it will be illogical to expect one. What we guarantee instead is a good running machine. If anything is missing or required to make the machines functional, is provided free-of-cost.
Considering that packaging will come in a big way in India, the industry is bound to grow. Literacy level is rising and so is need for printed material.
The proposal of ban on imported equipment, if accepted, will be a backward step. Only handful printers can afford new imported kits. All over the world machines are used that are made in either Germany or Japan. So, it is imperative that the factor is considered before putting any kind of ban else the industry would be hard hit.
Dealer
Daniel Rodriguez, PanPac
We started PanPac LLC in the year 2005 and we have sold in excess of 1,200 print units in these past seven years. We sell into 35 countries. We install and warranty machines in USA and Canada.
Availability of high quality equipment due to plant consolidations make late model used machines a cost-effective alternative to new. Tighter availability of credit globally is slowing new equipment sales, while driving up used equipment activity.
PanPac activity in India has been robust in 2012 and we are expecting continued sales growth in 2013 and forward. In 2012 PanPac customers in India included Pragati of Hydrabad, Lovely Offset in Sivakasi, Printmann in Mumbai, as well as dealer and company transactions.
We expect similar activity for 2013 with late model UV presses coming into India. We are the official dealers for AMS UV Systems which are made in USA.
There is considerable “pent-up demand” for post press equipment in India as a result of rapid expansion on the print production side, especially in packaging. As an example, PanPac provided a Swiss-made Bobst 102 CER die-cutting system, with stripping and blanking for high end tobacco packaging applications to JC Graphics in Andhra Pradesh.
Older equipment with less automation can hamper productivity in an age of super quick turnarounds. However, a refurbished machine from PanPac will provide a cost/productivity benefit consistent with a new machine.
PanPac Engineers LLC offer a full suite of engineering services including dry ice cleaning, rebuild and restoration, turnkey installation and training, parts and service. PanPac Engineers LLC is the official service provider for Mitsubishi Heavy Industries America Inc. We also have a 40,000 square foot facility where we store repossessed equipment for major American banks.
“A knowledgeable customer is our best customer”. PanPac provides expert equipment audits and appraisals and works with our customers throughout every acquisition, refurbishment project and logistical requirement.
Ban on import of used machinery is a big concern for PanPac, as the Indian market is an essential component in our strategic plan for growth.
If trends continue, we expect a significant shortfall in used equipment supply, particularly in Asia. I think, Asia will have tight competition with EU and US printers for high quality used equipment and digital assets in the next five years.
Printer-Dealer
Ashish Patel, Shri Export Import LLC,USA.
We are in printing packaging since 1965. We have been importing used machines since 1990 for our own work. Technically we are sound in any kind of used printing packaging machinery with 25 years of experience in importing machines. Still the used machinery market is not organised. That drove us in to used machinery market. We just don’t sell the machine. We give full service to our clients from selection of the machine to commercial production. Until our sold machine starts commercial production, we treat it as our own machine and put an effort to see that it operates efficiently.
Printing is a competitive market and very few people can afford to buy a brand new machine. But that’s not the only reason. Re-sale value of brand new machine has come down to the extent of 25 to 50%; due to the recession in Europe and USA very good well-maintained machines are available at almost 50% of the new machine price.
In 2012, we sold more than 60 machines, a record number for us, and still there is a very huge demand. We do expect good volume in 2013 and expecting to double our volume.
Yes, it’s true that post-press machines are in great demand. Last year, 50% of our sales were post-press machine. There are lots of spare printing capacity available but post-press is always in short supply.
There are two kinds of clientele in the market. One for whom price factor is a major concern and others who give the specification and if the machine fulfils their specifications, they don’t ask for price. For such clients test prints and third party inspection are crucial.
Yes, we do offer services like inspection, overhauling, and warranties on products. It’s our strength.
It is important for the pre-owned machine buyer to select the right dealer. Then check history of machine, take print tests and third party inspections.
I do not agree that only old machinery hampers productivity and quality. I have seen many brand new machines which are not even producing as good as 20-year old machines. See basic technology is same from many years.
There’s a move to ban import of used machinery. But there are hardly any good four-colour machine manufacturers in India. Personally, I feel, the Indian market demand is huge and they are not capable of catering to the Indian market. So we don’t have any other option except to import it. In the event government bans import of used printing machinery it will have a negative impact on the print market.
Dealer
Badri Kumar Singh of Somya Graphics
Cost has ensured the refurbished kit is a convenient prospect for Indian printers. For us, most inquiries are for Heidelberg presses, followed by Komori and Adast.
Most of the printers prefer to purchase from the local seller. An overseas seller takes advance and if he does not supply the machine you can do nothing. In our trade, the advance is refundable if machine is not up to expectation. But if the printer does not take delivery of machine after the machine is checked and verified by a mechanic (as per specs), then the advance is non-refundable.
It is true that most of the printers want to test-trial the machine before making a purchase. However, in my opinion it is not required. We never give a trial of used machines since they are in very good condition and up to the mark. In our business, engineers inspect the machine and only after inspecting do they give a report to the printer or buyer. Even operator can inspect the machine and can take responsibility to install the machine. The growth in printing and packaging will further accentuate the used-machinery market.
Dealer
Sanjiv Rawal of Peerless Pack
Since its inception in 1985, Pearless has installed over 2,500 machines which include binding, printing and finishing machines. So, we are selling at a rate of one machine per week.
The driving force for sales in pre-owned market is the availability of stock for inspection at importer’s and exporter’s site. In addition, the supply gets executed in lesser time than ordering new equipment where the cost is high and huge financial planning is required to execute the business plan.
The year 2013 will remain as steadfast as 2012, if not better.
In case of pre-owned machinery, price factor is significant but re-branding with upgrades and introducing alternative low cost brands which offer higher value have taken the lead. The margins for pre-owned machine suppliers are steady if there is win-win situation for buyer and seller.
The principle of ‘old machinery delivering average quality and high profit’ is no more a talk of the industry. The buyers are fine tuning there orders to suit market needs while dealers selling otherwise are at losing their market.
A geographical shift is observed in production centres, currently print production is being sourced from Asia. Besides this, nobody in industry has been able to forecast an up-turn in developed as well as the developing countries.
Dealer
Vikas Walia, Euro Bizlink
Since 2007, Euro Bizlink has been in the used machinery market. We are Czech Republic-based traders of used machinery, selling and buying from all over the world. We regularly export machines to India.In addition, we offer services like inspection, overhauling etc.
In 2012, we saw a good number of pre-owned machinery coming to India. We are expecting 40% growth for our business.
The recent downturn in the European market has seen lesser number of machinery put up on sale. However, European printers have started taking up jobs for lesser price and getting back in business.
As per my observation, price is the prime factor driving the pre-owned market. In the pre-owned market, it is necessary to look for a genuine dealer to ensure a good deal.
For the secondhand market to thrive there needs to be a healthy new machine sales market. As a rule, printers trade out older presses for new ones. The problem is that the new equipment market has not been upbeat in the European market. As a result, the availability of used machine is an issue.
It is impossible to survive in Indian market with expensive brand new machinery as already there is less capital available for investment and profit margins are shrinking. So pre-owned machinery is the only option at least for the new entrants.
The pre-owned market in India will grow. However there is change in the demand, printers are looking for younger machines manufactured after 2000.
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