Manroland Web and Goss announced completing their merger transaction this week, continuing the long-term consolidation in the industry that had already seen the brands of Harris, Marinoni, Cottrell, Faber & Schleicher, Plamag, Baker Perkins, Sheridan, Hoe, Walter Scott, Miehle, Dexter and Hantscho merge into these remaining two competitors. I may have forgotten a few more names.
Having spent my entire time in the printing industry with these two companies (including the former Heidelberg web business that today constitutes a big part of Goss), and having been involved in some of the previous efforts to consolidate and adjust to changing markets, I felt a bit of a full circle completion when I read the long announced news. (As a side effect I will probably post even less frequently than in the last few years.)
Having spent my entire time in the printing industry with these two companies (including the former Heidelberg web business that today constitutes a big part of Goss), and having been involved in some of the previous efforts to consolidate and adjust to changing markets, I felt a bit of a full circle completion when I read the long announced news. (As a side effect I will probably post even less frequently than in the last few years.)
No wonder print is dead: newspaper dresses are out of fashion....
A scan from the anniversary book
Goss - 100 years (1885 -1985)
A scan from the anniversary book
Goss - 100 years (1885 -1985)
After decades of fierce competition, plus bitterly fought legal battles over dumping and intellectual property, the shareholders have concluded that this consolidation is the right step forward. Long gone of course are memories of billion dollar revenues in a mature but cyclical market which is now seen as in steady decline. Goss owner AIP pegs Goss at $210 million revenue while MR owner Possehl reports sales of Euro 235 million for 2017. With the new equipment market probably around $250 - $300 million and a handful of competitors like KBA, Komori, Manugraph etc. still active, it is obvious that the aftermarket business generated by the combined company's large installed base of newspaper and commercial presses will be central for the future.
While the two companies are pretty close in terms of revenue, the publicly available headcount numbers differ quite a lot, with AIP providing approximately 600 employees for Goss vs 1248 employees reported by Possehl for Manroland. It should be noted that the Goss numbers most probably include Contiweb which will not be part of the transaction, while the MR numbers include some operations which have been outsourced at Goss. Friday's press release talks about more than a 1,000 employees combined, obviously leaving some room for further consolidation as the company will surely rationalize its remaining global footprint. With Augsburg and Durham being the remaining production sites it is not difficult to see the next consolidation scenario.
Congratulations to Bert Schoonderbeek and his team who have successfully managed the Contiweb business for many years, whether being part of Heidelberg Web or Goss, and hopefully now have an opportunity to position the stand-alone company for its next phase.
Over the years all press manufacturers offered every conceivable variation of cut-off, web width, inker configuration and folder capability, allowing printers to choose equipment that promised a marginal productivity advantage for any given business investment scenario. While most productivity improvements were evolutional, gapless printing resulted in large step function productivity gains and became the dominant technology in high-volume heatset, especially in the 2-around markets in the Americas. Those who can appreciate the complexity of printing and folding at speeds of over 50 km/h will understand the engineering effort necessary to provide the support for this type of equipment, even if it just means addressing obsolescence issues, let alone the development of new technologies. It is already becoming apparent that the current business volume does not support much new development, with the 96-page/64-page short grain gapless presses being the last major productivity innovation. And that was ten years ago. Newspapers have not seen anything new since 4x1 hit the market in its gapless and mini-gap variations.
Let's hope that the management will have a lucky hand providing competent technical support for the wide range of products still in the market as well as an adequate product portfolio for the remaining new equipment customers, while pursuing the unavoidable product rationalization process which will go beyond the obvious M-600 vs Rotoman model debates and will include control systems, folder and drive concepts.
Maybe the lack of innovation and potential limitation of product choice will not matter as printers continue their own consolidation process, with the German market also following the long-term trend in the US and Europe. Consolidation often results in internal redeployment of equipment rather than new equipment orders. And newspapers may just be happy to extend the life of their machines through rebuilds and reconfigurations. Not a great outlook for any equipment manufacturer, but probably a good reason to merge and focus on the aftermarket.
Good luck to the new company!
While the two companies are pretty close in terms of revenue, the publicly available headcount numbers differ quite a lot, with AIP providing approximately 600 employees for Goss vs 1248 employees reported by Possehl for Manroland. It should be noted that the Goss numbers most probably include Contiweb which will not be part of the transaction, while the MR numbers include some operations which have been outsourced at Goss. Friday's press release talks about more than a 1,000 employees combined, obviously leaving some room for further consolidation as the company will surely rationalize its remaining global footprint. With Augsburg and Durham being the remaining production sites it is not difficult to see the next consolidation scenario.
Congratulations to Bert Schoonderbeek and his team who have successfully managed the Contiweb business for many years, whether being part of Heidelberg Web or Goss, and hopefully now have an opportunity to position the stand-alone company for its next phase.
Over the years all press manufacturers offered every conceivable variation of cut-off, web width, inker configuration and folder capability, allowing printers to choose equipment that promised a marginal productivity advantage for any given business investment scenario. While most productivity improvements were evolutional, gapless printing resulted in large step function productivity gains and became the dominant technology in high-volume heatset, especially in the 2-around markets in the Americas. Those who can appreciate the complexity of printing and folding at speeds of over 50 km/h will understand the engineering effort necessary to provide the support for this type of equipment, even if it just means addressing obsolescence issues, let alone the development of new technologies. It is already becoming apparent that the current business volume does not support much new development, with the 96-page/64-page short grain gapless presses being the last major productivity innovation. And that was ten years ago. Newspapers have not seen anything new since 4x1 hit the market in its gapless and mini-gap variations.
Let's hope that the management will have a lucky hand providing competent technical support for the wide range of products still in the market as well as an adequate product portfolio for the remaining new equipment customers, while pursuing the unavoidable product rationalization process which will go beyond the obvious M-600 vs Rotoman model debates and will include control systems, folder and drive concepts.
Maybe the lack of innovation and potential limitation of product choice will not matter as printers continue their own consolidation process, with the German market also following the long-term trend in the US and Europe. Consolidation often results in internal redeployment of equipment rather than new equipment orders. And newspapers may just be happy to extend the life of their machines through rebuilds and reconfigurations. Not a great outlook for any equipment manufacturer, but probably a good reason to merge and focus on the aftermarket.
Good luck to the new company!
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