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Industry Roundtable: The Wide-Format Forecast

(October 2010) posted on Thu Oct 14, 2010

Taking stock of 2010, and preparing your business for 2011 and beyond.

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Greene: Great question. There are a lot of pitfalls when it comes to these deals. It is so important that the companies involved get together and actually continue to do what each does well and not be in too much of a hurry to integrate and look for cost efficiencies. For Océ and Canon, the product lines fit together very well, it will be very interesting to see where they go with future products and the technologies that both companies bring to the table. One thing that’s clear to me is that, as a result of its recent activities as well as its own product and market development, Agfa has really stepped up its game in terms of competing across the segments of the UV-curable inkjet market. They are in just about every segment of that market now, with a big sales force to push it and very strong fulfillment capabilities to back it up.

Chesterman: The graphic-arts community is constantly evolving and the mergers between companies such as the ones you have named are indicative of this. Take Canon and Océ for instance: Océ traditionally manufactures wide-format systems, and Canon, production presses, although they do have a wide-format division as well. With mergers like this, we are experiencing a blurring of lines. Eventually distinguishing businesses by their output, e.g., “wide format,” or “narrow-format,” may become increasingly difficult.

Boer: The M&A deals will likely bring wider accessibility and product improvements in terms of reliability, ease-of-use – things that benefit from big corporation process. What it may not bring is faster innovation. Typically, acquisitions are not accretive, so revenues go down while debt payments to acquire the business must be paid and integration into the new entity occurs. But in the end, more predictable and reliable products will come to market. The fear, of course, is that with fewer competitors, pricing might go up. Given that wide-format graphics printing is a fairly mature print market with many potential, emerging non-US competitors like Grapo, SwissQ, Sun LLC, and others, it’s unlikely the newly merged companies will be able to pass on price increases.

Question: UV continues to make in¬roads into the rollfed side of the market. Approximately one-sixth of all rollfed models in our latest rollfed printer survey indicated UV technology – a nice slice of that pie. Will that group get even larger in 2011?