Perfect storm capsizes Manroland
Monday, November 28, 2011
It is surely inconceivable that Manroland will not continue in some form. Surely???
That said, up until Friday it seemed inconceivable that this bastion of the German equipment engineering industry with a history stretching back more than 160 years would be allowed to fall into insolvency.
It just shows what brutal times we live in. As someone put it this morning when discussing this head-shaking outcome: "this is pure capitalism".
Friday's events caused me to re-read some blogs from
2009 and 2010, when speculation about some sort of mega-merger among the German
press manufacturers reached a fever pitch. Since then, Heidelberg has received
state aid which allowed the world's largest press manufacturer to keep its head
above water and restructure. And KBA reshaped off its own back under former CEO
Helge Hansen, while gaining from its activities in niche markets. Shares in both companies jumped on the Manroland news.
Manroland looked the most vulnerable of the three, especially after majority stakeholder Allianz wrote off its investment. But I think most people expected that some sort of deal would be concocted for the greater benefit of 'Germany plc'. A bit like when Heidelberg bought Linotype-Hell back in the 1990s. Instead, we have Manroland's 6,000 employees contemplating a not very merry Christmas.
The press manufacturers are experiencing a perfect storm: the financial crisis reduced demand for print and resulted in the failure of many printing companies. It also made it nigh on impossible for those customers who did want to reinvest to find the necessary finance. The shift to online media means massive structural change among the customer base too, in particular newspapers, and no doubt with more to come - an example being Communisis saying it plans to migrate all its 'heavy metal' litho printing over to high-speed digital inkjet. And 21st century litho presses are so very fast, and so very efficient that one new press can replace as many as three old ones. It's ironic that Manroland is the biggest corporate failure in Germany since Arcandor went bust two year ago - a collapse that had massive ramifications for continental printers of its huge catalogue.
It's impossible to predict what will happen next, but as Manroland is the market leader in web offset presses worldwide one can imagine that this part of the business is the most saleable, even though the market for new web press installs is stagnant. The servicing and repair business alone for the installed base must be substantial.
Sheetfed, where Manroland is in fourth place behind Heidelberg, KBA and Komori (according to the latest info from KBA) is a much more problematic proposition. One can only begin to imagine the tensions between the Augsburg and Offenbach camps at Manroland today.