Rainer Hundsdorfer: Ecology, economy are interdependent
Rainer Hundsdorfer, CEO, Heidelberg in conversation with PrintWeek
07 Feb 2022 | By PrintWeek Team
PrintWeek (PW): Tough 18 months. Your learnings from 2021...
Rainer Hundsdorfer (RH): Despite all the challenges, Heidelberg 2021 can be summed up as a good year. We made progress in many areas: We have stabilised financially. We are benefiting strongly from the recovery in our core business. We are establishing new growth areas. Here, we are only at the beginning of an enormous growth spurt through new innovative offerings, for example, in e-mobility.
PW: How has your company and factory sites responded to the challenges of the Covid era? Anything on the ideas front? Any new research or innovation?
RH: The past year has shown how strongly we are positioned and what we can achieve. We were always close to our customers, whether in sales, service, in our print media centres worldwide, at trade shows or digitally. We have focused all our energy on serving our customers and winning new ones.
We have maintained our research and development performance at a high level, even during the crisis. This is the only way to realise trend-setting product innovations such as the Speedmaster CX 104. And our success proves us right. Accordingly, we will also consistently expand our capacities in China for China, but also for the surrounding Asian markets.
We are confident not only for the current fiscal year, but also increasingly optimistic for the years to come. Subject to solid economic development, we see good potential for a continuation of the profitable upward trend.
RH: The basis for this, following the successful implementation of the measures for realignment, is above all the consistent use of our market and technology leadership: we are focusing on our core business to align the company in a lean, agile and customer-oriented manner. In our restructuring, we have oriented ourselves away from a pure product focus to the entire process chains at customers end-to-end both for commercial printing and, of course, even more so for packaging printing. In doing so, we think through our customers’ entire process chain under optimised conditions. Together with our partners, Heidelberg is the only supplier to offer this solution scenario. This also enables us to generate further impetus for growth. We have consistently divested or spun off areas that no longer fit our portfolio.
PW: The pandemic has impacted India’s prospects to become a USD 5-trillion economy by FY25. However, has the last quarter numbers reposed faith in the Indian market?
RH: The current economic situation globally is volatile as the pandemic is throwing new challenges with new variants. In order to achieve a USD 5-trillion target by 2025 the Indian economy needs to grow approximately by 13% year-on-year. Challenging, but not impossible.
While all economic recovery indicators head north, we must wait and watch the situation closely as it develops due to unprecedented disruptions primarily due to new variant Omicron and global logistics and supply chain disruptions.
The main focus is that India needs to be an integral part of the global value chain. We have a strong belief that more developments are on its way in the coming years. The growth rate should be sustainable with minimum 9-10% year-on-year for the next decade and you have more than 50% young population to support that. More concentration towards digital transformation with a deep focus on sustainability and renewed energy.
Heidelberg Wiesloch Walldorf Factory
PW: What’s Heidelberg’s perspective?
RH: From Heidelberg’s point of view, we have great confidence in the Indian market. India is one of the promising markets of the future and has the potential to catch up with China, the largest print market. At present, India is still at the beginning of this development.
PW: Brands (FMCG and non-FMCG) are seeking more and more from print and packaging. As a global manufacturing brand, how can our industry cater to the new normal of - gaining speed; more flexibility; profit-centric approach; and lower carbon footprint?
RH: Our customers are benefiting greatly from the digitisation of the industry. The Smart Print Shop with end-to-end digital processes is now a reality. In the meantime, we also offer our customers autonomous end-to-end print production, that is, right down to the brochure placed on the pallet. This makes it possible to significantly increase overall equipment effectiveness in print stores and thus profitability. Our customers also benefit from our digital subscription offers, which use our data expertise and even artificial intelligence to massively increase efficiency on the customer side.
Last but not least, we have just launched “Heidelberg Plus,” the new gateway to the Heidelberg Ecosystem, to which customers can gain access with a single login and thus access all digital offerings from Heidelberg.
PW: How should print adopt marketing strategies that promote the print brand beyond the function of product or service. One school of thought is, the key is to do more than just meet consumers’ immediate needs. What is your view?
RH: Printed media will continue to play an important role in the communications mix in the future. They stand for individuality, authenticity, sustainability and the value of information. Packaging enriches and facilitates our everyday lives in a wide variety of facets. The production companies behind it are smart, digitally networked and highly profitable. The working environments are modern, the tasks exciting and varied. The industry and its employees have a wide range of prospects.
PW: 77% of Indian consumers are actively engaging with sustainability. These consumers will invest time and money in companies that try to do good. Three sustainable actions you have undertaken in the past year that you can share with us?
RH: We are stepping up our sustainability management activities. Against the backdrop of the global challenges of climate change, Heidelberg has committed itself to climate neutrality by 2030 as part of its sustainability strategy. To this end, the company has established an Environmental Social Governance (ESG) committee, which is responsible for the strategy as well as the definition, implementation, and monitoring of measures.
To achieve this goal, Heidelberg has already defined several measures and begun implementing them. The initial focus is on increasing energy efficiency at all production and sales sites and supplying them with green energy. This is already significantly reducing CO2 emissions. The company will compensate for the remaining, unavoidable emissions by means of emission certificates. Heidelberg then aims to achieve complete climate neutrality for its sites without certificates by 2040 at the latest.
With regard to the portfolio, Heidelberg develops environmentally friendly and reliable products for all phases of their life cycle, that is, in terms of production, operation, and disposal or recycling. Compared with 1990, Heidelberg has reduced the energy required for the printed sheet by 40%. The company has geared the operation of its products to sustainability in terms of waste, energy consumption, and emissions so that customers can produce their print products in line with the motto “think economically, print ecologically”. As early as 2012, Heidelberg was the first press manufacturer to calculate CO2 emissions during the manufacture of its presses (cradle-to-gate) and make them climate-neutral at the customer’s request.
One of our goals is to help our customers achieve climate neutrality over the next ten years - be it with print products or even in the entire print shop.
PW: Is there a Green Gap between what our industry talks about; and the rest of society? For example, the industry uses terms like “biodegradable” and “circular economy”. How can we bridge the knowledge gap?
RH: We have been committed to sustainability in the manufacture of print products for many years. By joining the international healthy printing initiative, Heidelberg is underlining this comprehensive commitment to environmentally friendly products and technologies. Healthy and sustainable printing is increasingly becoming a competitive advantage. Demand for safe and recyclable print products is growing, particularly in packaging printing. As a leading partner to the folding carton industry, Heidelberg supports the holistic approach of the healthy printing initiative.
This offers a platform along the value chain for exchange and cooperation about healthy printing and improved recyclability. Recyclability makes an important contribution to an efficient circular economy and thus strengthens the competitiveness of the printing and, in particular, the packaging industry.
Overall, Heidelberg understands sustainability management holistically and takes into account all aspects such as climate and environmental protection with regard to the manufacture and operation of its products and social criteria. Ecology, economy, and social responsibility go hand in hand.
Heidelberg Print Media Centre Wiesloch
PW: Any lessons you can share from a customer that have been resilient or innovative (and flourished) during the past 18 months?
RH: The Speedmaster CS 92 in particular is being used successfully by commercial and packaging printers in Asia and India. This sheetfed offset press is the right answer to the needs of a print market in which print runs are getting shorter and job changes are becoming more frequent. Thanks to their investment in sheetfed offset technology from Heidelberg, print shops are boosting productivity and cutting production costs. More customers are placing their trust in the Speedmaster CS 92 (newly launched Speedmaster CX 92 at China Print in Jun’ 2021) built at the Shanghai plant in China. The figures bear this out: Heidelberg India has sold and installed a total of 63 printing units of this series throughout the country in the last six years.
RH: The following three examples demonstrate this trend.
Indian print shop Rahul Print o Pack based in New Delhi, is successfully producing on two new Speedmaster CS 92 presses from Heidelberg. The company commissioned the first press in 2018, at the same time as a Suprasetter 106 CTP system. Around 14 months later, Rahul Print o Pack had printed 64-million sheets.
Replika Press in New Delhi, one of India’s largest print shops, currently produces on three Speedmaster CS 92 presses. The latest fourth press is our newly launched Speedmaster CX 92 press, commissioned in October 2021. One of the company’s main focuses is on book production, with over 16,000 titles produced annually at three sites. Production capacity is sufficient for 50,000 hardcover and 1,50,000 softcover books per day. The customers are well-known publishing houses from Germany, the Czech Republic, France, Norway, Sweden, New Zealand, Russia, the USA, the United Kingdom, the African continent and Brazil.
Since August 2020s, Navi-Mumbai-based packaging printer Rukson Packaging has been producing on a Speedmaster CS 92-5+L. It is a press with five printing units and a coating unit, “the ideal press for packaging and pharmaceutical jobs” as Gobind Panjabi, the owner of the company, says.
PW: Your plans for 2022?
RH: Heidelberg has achieved the financial turnaround. Thanks to already significant improvements in results and the ability to generate substantial cash flows. This is a very good basis for the planned future growth.
By successfully completing our homework and focusing our business, Heidelberg will become more profitable in the future. The basis for this is a significantly lower break-even point, which will continue to fall, and our ability to profit more strongly from the recovering markets.
We are and will remain a reliable partner for our customers – both for the commercial sector and for packaging printing, where we continue to grow with new products and solutions. We are increasingly turning our attention to the growth market of India and helping our customers there to be successful.
In addition, we will grow profitably in our core markets in the future, particularly in packaging printing, and digital business models.
In addition, we will increasingly focus on the topic of sustainability, that is, ESG, and thus on the criteria: environment, social and governance. Accordingly, we will significantly adapt our sustainability strategy and define clear, comprehensible targets against which we will also be measured. Ecology and economy are not contradictory, but rather interdependent.
PW: One outrageous prediction for the year to come...
RH: We are leaving the pandemic and its consequences behind us worldwide. We are using the accelerated change to drive our industry forward. We see the crisis as an opportunity.