Edition 40 / December 2014

“Gallus & Heidelberg” interview with Stefan Heiniger/COO Label Business and Klaus Bachstein/CEO Gallus Group

1. The acquisition of Gallus by Heidelberger Druckmaschinen AG was completed in July. What does this mean for Gallus and its customers?

Klaus Bachstein:
To start with, I should point out that Heidelberg owned a 30 percent stake in Gallus since 1999 and was therefore already proportionately represented on its Board of Directors, the most senior managing body of Gallus. Heidelberg invested considerable effort in this involvement from the outset, as shown by the presence of two Heidelberg Board Members on the Gallus Board of Directors throughout the entire duration. As such, erstwhile minority shareholder, partner and now outright owner Heidelberg was already thoroughly involved in developing and pursuing all lines of strategy at Gallus. This explains why the acquisition does not signal any change to the fundamental direction of the company. Gallus will maintain the focus on label printers as its main target group in line with its chief expertise in bringing “success and security for the labelprinter”.

The same applies to the business Gallus has built up since 2006 in folding cartons by supplying inline presses and die cutters for the manufacturing of cardboard products.

The Gallus image and brand will remain unaltered. All that has changed under the new ownership is a change of status from “a partner of Heidelberg” to “a member of the Heidelberg Group”.

Stefan Heiniger:
Our customers have not experienced any difference in our communications and support as a result of the change in ownership, and they retain the same customer service representative for sales and service. We place great value on ensuring continuity in our relationships with customers. The specialised business of label printing and our customers’ strong focus on applications call for special expertise from the development and implementation stages right through to sales and service. Our customers want advisors who fully appreciate the demands of their work, talk their language and can act as a sounding board for ideas. This requires a sustained fascination with the sector and their relevant specialisation.

2. What was the reason for a complete take-over by Heidelberg and what benefits are to be expected?

Klaus Bachstein:
The strategic advantage for Heidelberg and its customers lies in the complementary expansion of its portfolio to include the packaging segments of labelling and folding cartons covered by Gallus. Gallus focuses entirely on the development and manufacturing of inline printing machines and thus complements the predominant expertise at Heidelberg in sheetfed technology in both these market segments. Any Heidelberg customers looking for inline solutions for manufacturing labels or folding cartons can tap into Gallus technology.

Conversely, Gallus and its customers stand to benefit from even easier access to the key skills and technologies of the Heidelberg Group and its partners. This fact emerged and remains very apparent in the development of offset printing units and their integration in Gallus inline presses, and it will only become even more evident as the digitisation of the printing industry progresses. Access to expertise and skills in the design of digital printing units and workflows and their integration into customer-ready solutions represent a sizeable challenge for medium-sized companies like Gallus. In future, competitiveness and market leadership in the printing press sector will require a global presence and multiple usage of promising technology across related fields. This is a strategy Gallus can only pursue with a suitable partner and competent allies. Being part of a leading company in the graphic services industry whose core business serves very similar requirements and can therefore be tackled together – using the appropriate concentration of resources in defined development projects – offers a huge advantage in this context.

Stefan Heiniger:
The Gallus DCS 340, which was unveiled at the “Gallus Innovation Days” in September 2014 as the newest generation of digital printing press for producing labels straight from the roll to the finished product, emphasises this point. It only took the engineers at Heidelberg and Gallus something like twelve months to develop a new solution that uses inkjet heads from their technology partner Fujifilm and heralds a new era in the label market. As well as the printing unit concept, its other key features are the workflow design, development, provision of the software required and its integration into the Gallus printing press, and development of just the right inks to suit the inkjet heads. This complete solution offers a clear differentiation and greater customer benefit over the existing market solutions. Gallus injects its market expertise, understanding of applications on the label market, the machine base and mastery of register-accurate web feed for all relevant substrates encountered in the label industry. It’s a unique combination.

Having Gallus on board in the Heidelberg Group reinforces our motto of “success and security for the labelprinter”.

3. Will the customers notice any difference?

Stefan Heiniger:
As I stated at the outset, the Gallus image and brand will remain unaltered, and customers will retain their existing advisors.

At the same time, our membership in the Heidelberg Group now offers us the chance to benefit from the global market coverage that Heidelberg offers. So we are examining the potential for further improving our customer provision around the world, above all in respect of the service we offer, and particularly in terms of establishing our service expertise in digital printing presses. 

4. One more question with regard to the digital market: Will the new Gallus DCS 340 digital inline converting system be a Heidelberg machine, and where will it be manufactured?

Stefan Heiniger:
Klaus Bachstein already spoke about the multiple usage of technology and its significance for business profitability. The Gallus DCS 340 is the first joint development project between the Heidelberg Group and its technology partner Fujifilm to enter the market. It is a product for label printers. Gallus is the member of the Heidelberg Group responsible for reel printing and supplying the markets for label printing and folding carton printing with reel solutions. So the Gallus DCS 340 is a Gallus machine and will remain the responsibility of Gallus as far as any further development, sales and after-sales service go. We will continue to draw upon the resources at Heidelberg for the further development of the key inkjet printing unit, workflow software and ink development. After all, Heidelberg will be using the same technology for its key markets, and drupa 2016 promises to form a further milestone in this respect. This is what we mean when we talk about multiple usage. So it is only logical that the inkjet printing module should be manufactured at the Heidelberg plant in Wiesloch. The support units and all the Gallus DCS 340 modules will be constructed in the St. Gallen plant that Gallus operates in Switzerland.

5.  What is your own take on the acquisition?

Klaus Bachstein:
Gallus becoming part of Heidelberg reinforces our motto “success and security for the labelprinter”, and Heidelberg is a strong brand that stands for solutions expertise in the rapidly changing graphic industry. Above all, in the quest to forge the right partnerships to break into the digital label printing market and to cover the ensuing demand for customer support in all related questions (e.g. “How can I produce a ready-die-cut label?”, “How does the workflow function, and who can help me with it?”, etc.), the technological skills of partners Fujifilm and Heidelberg coupled with the expertise that Gallus can offer in terms of applications and market knowledge make a very good match.

Furthermore, the high level of continuity in the existing interpersonal relationships between Gallus and its customers and the ongoing involvement of the former majority owner at Gallus and new Heidelberg anchor shareholder, Ferdinand Rüesch, in his operative role as Gallus key account manager are quite evident. All this is taken as a sign that the announcements made by Heidelberg and Gallus that the latter will continue to function as a separate unit on the market will still apply after the acquisition.

Following a period of initial uncertainty in some divisions of the Gallus workforce in response to the acquisition by Heidelberg – the questions regarding job security, possible changes and future prospects that inevitably arise from any acquisition – these worries have subsided relatively quickly as the prospects generated by joining the Heidelberg Group are moving to the fore in talks with employees. In particular, the joint project in digital printing has brought together wide sections of the Gallus and Heidelberg workforce, and the combined project team is proud to have achieved the first milestone by successfully presenting the Gallus DCS 340 to more than 700 customers at the “Gallus Innovation Days 2014”. We are now turning our full attention to its market launch set to coincide with Labelexpo 2015 in Brussels, which will involve making a few more improvements to the product.

So, at Gallus we are very content with the state of play and look confidently towards the future. Ultimately, our mission remains unaltered by the change in ownership, namely, to help our customers reap ongoing benefits that they are happy to reward us for.

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