20 November 2017 Print Companies

Koenig & Bauer and the age of the machine

Two hundred years after two friends started Koenig & Bauer, the press manufacturer has a renewed vision of the future.

Two hundred years ago two men moved into a vacated monastery and began making steam powered printing presses to produce newspapers. It was considered to be the first radical change in printing machinery since Gutenberg converted a wine press to print from his moveable type.

The pair were Andreas Bauer and Friedrich Koenig and the monastery was in Würzburg. The busts of the two entrepreneurial engineers have been outside the factory for many years and inside a replica of the press for the Times of London that made their name has been part of a small museum.

Now their names have been restored to the company they founded in 1817. KBA has once again become Koenig & Bauer.

It has been the culmination of several years spent reshaping the company. Numerous acquisitions, starting with gravure and web press manufacturer Albert-Frankenthal followed by East German sheetfed litho press producer Planeta, in the 1990s had left the business with 33 subsidiaries.

More importantly these have shifted the centre of balance from a company focused on newspapers and other types of printed publications to all manner of packaging applications. In addition it is the world’s largest producer of currency printing presses, thanks to another acquisition.

The company’s history is ever present in the vast plant close to the river Main that was called the New Factory when the company moved there in 1901. The company flirted with collapse in 1971, skirted disaster when sales 40% fell in a year in 2008 and reorganised for a final time in 2014 when the directors led by Claus Bolza-Schünemann and CFO Martin Dähn began to realign the business to focus on packaging.

“We were previously linked to the media industry, now we are well positioned for the future,” says the CEO. “We have 63% of the large format sheetfed litho market for packaging for example.”

The media focused operations that had once generated 90% of revenues now bring in less than 10%, newspaper presses bringing in only 2% of sales for example. Yet in 2016, KBA enjoyed the most profitable year in its 199-year history, says Dähn. “We restructured the business in 2014. We had to shed 1,500 jobs, organised into separate divisions with no cross subsidies and strong corporate governance.”

The transition is all but complete. “We have changed over the last few years,” says Bolza-Schuenemann. “We are now well positioned for the future.” Packaging of almost all shades is now the focus for the future, and one that the company believes to be immune from digital substitution and which is growing at 4% a year. As 70% of the business is in packaging, this will give the company an inherent growth rate of 2.8%. It is of course aiming for more than this – “We have a track record of growing market share,” says Dähn.

The company has split into distinct divisions which are self supporting. The days of cross subsidies are finished. “We have put in place a strong corporate governance,” he explains. This also explains the strength of the company’s share price: investors can see where the profits are coming from and there is no overhang of debt to manage. “We are in a position to push for growth.”

The drive towards more sophisticated packaging, online retail and the expansion of urbanisation in the developing countries and with it the increase in smaller households are all drivers of growth in packaging, even without the trend to use packaging as a marketing platform. “Other than newspapers, we don’t think that any of our businesses is threatened by digital,” Dähn adds.

“Packaging becomes much more important as a messenger with the loss of run of press advertising and reduction in the effectiveness of online advertising.”

The exception to the profitable expansion is the flexo press operation acquired from Cerutti. It has doubled market share from 3% to 6% but continues to lose money. A new management team has been installed and is delivering results though these are not yet public.

The glitch was not enough to deflect from the celebration of the 200th anniversary, the unveiling of a new corporate design nor the chance to show off the digital printing technology that is here for the longer term.

Analogue processes will continue to hold sway for the visible horizon, around 95% of markets served remain analogue, says the company. It has, however, been working on the future for years.

Unsurpsingly the thrust of the innovations revealed to guests in Würzburg is on packaging. An €8 million R&D demo centre on the site will house a flexo press, the new CorruCut corrugated board press and a RotaJet inkjet press. Each is a beast, the continuous feed inkjet press being substantially larger than any equivalent from the likes of Océ or Ricoh.

Koenig & Bauer has two targets for it: the book printing sector where being able to print on the same papers and at the same reel width as used on Timson or other offset presses is an important consideration; and the industrial sector where the RotaJet will target new markets: printing wood laminates for flooring to furniture and wallpapers.

The RotaJet is built for expansion, adding extra print heads will let users move from mono to colour printing or from a 770 mm wide web to one 2.25 metres wide. There is space to take additional dryers and the presence of a flying splicer indicates that this is meant for high volume production.

It is the world’s second largest inkjet press after the HP 1100S press for corrugated printing at 2.8m wide. This is also built by Koenig & Bauer with HP providing the printheads while the RotaJet has arrays of Fuji Samba printheads.

Alongside this machine in the factory, Koenig & Bauerr was showing its new machine for printing two-piece metal cans. It borrows heavily from technology used in other divisions, a cross fertilisation that may become a recurring theme for the business.

The RotaJet is the first press to be presented in the new dark grey livery with the name of the manufacturer illuminated and a vertical neon striped to show the status of the press. The new styling will be rolled out across the range between now and Drupa in three years’ time. This will include the hybrid offset/digital sheetfed Varijet press, aimed at carton production.

Two prototypes have been built and are in the company’s sheetfed factory in Dresden. The plan had been to demonstrate the press before the end of this year, a timetable that has slipped a little.

“We still have some homework to do because folding carton work is extremely quality demanding,” says Bolza-Schünemann. “The quality we reach today is not good enough for market. At the moment we want to avoid showing something to the market which is not ready to be sold. We can’t say whether it will be ready in three months or another six months – but we don’t want to keep the market waiting for six or seven years.”

Other investment has included new machine tools for the Würzburg factory producing side frames for sheetfed machines as well as those produced in the factory. Dresden now focuses on cylinder production, the company organising to make the most of capacity at each site.

There are no immediate plans for acquisitions, according to Bolza Schünemann, no folder-gluer producer to join the Iberica cutting and creasing platen business acquired last year for example. “A folder-gluer is a logical acquisition,” he explained. “But there are many around. Any acquisition has to make sense.”

Nor is it purely about the print technology. Growth will come from service as well as from press sales. “Our customers are not getting off the shelf solutions,” Bolza Schünemann says: “The solution has to be as innovative as the needs it and quality has to be outstanding and service must be impeccable.” It demonstrated how customers or engineers wearing a headset mounted cameras can locate and fix faults under remote guidance from the factory for example.

Service will be helped by greater integration and connectivity between pieces of equipment, leading both to information about production status and maintenance requirements to a central information system, sometimes with the print business, sometimes with the manufacturer.

This paves the way for automated workflows, perhaps even autonomous machines. The Koenig & Bauer solution for its sheetfed presses is a means of monitoring and operating a press using a tablet computer.

This is possibly the dream of Industry 4.0, but Bolza Schünemann is scathing about the idea he says was dreamed up by German civil servants.

“It came about some years ago when Angela Merkel spoke about the Internet of Things. It led to a 128pp memo to the German government about what it means. Reading it you would have no real clue about what the goal and the task would be.

“At Koenig & Bauer we have for many years connected machines with intelligent software. We constantly interchange data between prepress and post press. Every newspaper and sheetfed press is capable of this. It has been possible for many many years.

“We can look into what is happening inside our machines. We just didn’t need the government to give a name for it. However, there are many industries where interconnectivity between electrical and mechanical equipment is still not available, and it is essential for them to learn how to connect, but we are pretty well down that road.”

For the third century of a company founded in the same year a German engineer developed the world’s first bicycle, integration will be a watchword for the next few years.

The reorganisation has been completed, the redesign is in place. “Now we can push for growth,” says Bolza Schünemann. And, according to the company’s new slogan, whether the growth comes from analogue or digital printing “we’re on it”.

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Koenig & Bauer Factory

Koenig & Bauer Factory

As KBA once again becomes Koenig & Bauer, it has shifted its focus from printed publications to different aspects of packaging applications.

Explore more...

Koenig & Bauer enjoys benefits as packaging grows

Corporate revamp emphasises Koenig & Bauer shift to packaging as third century dawns

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CEO Claus Bolza-Schunemann

CEO Claus Bolza-Schunemann

As KBA once again becomes Koenig & Bauer, it has shifted its focus from printed publications to different aspects of packaging applications.

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Koenig & Bauer enjoys benefits as packaging grows

Corporate revamp emphasises Koenig & Bauer shift to packaging as third century dawns

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CFO Martin Dahn

CFO Martin Dahn

As KBA once again becomes Koenig & Bauer, it has shifted its focus from printed publications to different aspects of packaging applications.

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Koenig & Bauer enjoys benefits as packaging grows

Corporate revamp emphasises Koenig & Bauer shift to packaging as third century dawns

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New livery for the Koenig & Bauer presses

New livery for the Koenig & Bauer presses

As KBA once again becomes Koenig & Bauer, it has shifted its focus from printed publications to different aspects of packaging applications.

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Koenig & Bauer enjoys benefits as packaging grows

Corporate revamp emphasises Koenig & Bauer shift to packaging as third century dawns

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Guests are shown around the factory

Guests are shown around the factory

As KBA once again becomes Koenig & Bauer, it has shifted its focus from printed publications to different aspects of packaging applications.

Explore more...

Koenig & Bauer enjoys benefits as packaging grows

Corporate revamp emphasises Koenig & Bauer shift to packaging as third century dawns

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