Pushing hard into the consumables market may be the best decision MAN Ferrostaal Australia managing director Markus Haefeli has taken. For just as a strategy is in place to deal with dramatic change in the local marketplace, the fundamentals of the company’s equipment-orientated business have been changed. In January, German transport and engineering giant MAN sold 70 per cent of the global agency business to Abu Dhabi’s state-owned International Petroleum Investment Company. Then less than a month later comes the announcement that pressmaker manroland – which builds the newspaper and commercial web presses in use at most of Australia’s largest print sites – and MAN Ferrostaal will end their longstanding worldwide agency agreement in September. Some change was to be expected: manroland had placed a delegate, Dietmar Zütt into the Australian office in 2007 following the press maker’s spin-off as an independent company. Then a partnership between the two, manroland Web Services Australia, was set up to strengthen support for newspaper and commercial web customers in the area. These components, including a team of 17 specialists under managing director Graham Wickham, may be expected to become the nucleus of the press maker’s direct presence. For the time being, the announcement on February 9 suggests it’s “business as usual” ... but it cannot of course, be so. A statement says the company will focus on markets where it has a track record of success “such as packaging ... as well as prepress and print finishing.” And with the sense of perhaps having said too much already, there is no further comment. In the newspaper segment, MAN Ferrostaal Australia had been looking for a replacement for the much smaller Manugraph DGM single-width agency – lost to Brendon Whitley’s NZ-headquartered Webco. Replacing the manroland agency, with its substantial sheetfed component – showcased by a new MANF showroom in Melbourne – as well as newspaper and heatset press, and the ppi Media systems offerings, would be a much bigger ask. And would IPIC want that? The UAE company says it looks for long-term investments in petrochemical and related industries operating mainly in oil processing, petrochemicals, pipelines, power stations and energy-intensive industries – all sectors, it says, in which MAN Ferrostaal excels. A statement says IPIC can support MAN Ferrostaal “over the long term” in its strategic development, and believes its UAE base will be an attraction to German and European companies which want to establish themselves in the Middle East and North Africa, as well as a bridge to the Gulf region. No mention of the mature industry sector of ink on paper here. In Australia, with a raft of new consumables, agencies including prepress giant Kodak – and the search on for a new single-width press player – Markus Haefeli had been hopeful of a good year. He spoke in January to GXpress of the enormous change in the local web commercial sector in recent months, which has dealt an additional challenge to a supply industry already struggling as a result of the devalued dollar and tough financial conditions. Haefeli cites the impact of the Rural/Fairfax merger, plans by publishers ACP and Fairfax to build their own heatset print facilities, the expected move into gravure by Michael Hannan’s IPMG, and PMP’s “coming to terms” with the loss of major contracts as indicative of “really serious major change” in the web industry. “This has all happened within six or seven months and it’s phenomenal,” he says. And he says change in the sheetfed segment has been even more extreme, with 70 per cent of the sheetfed market now owned by private equity: “All the old entrepreneurs are gone, the people who started the businesses and had a gut feeling for what was going on, have just been expelled.” Change was inevitable, Haefeli looking at a market environment – customers, suppliers, macro and micro economic factors – which has moved to a completely new space ... “and we’re still sitting over here. “If we don’t move into this new environment, we’re going to be sitting there in a year’s time wondering what’s going on, and our business will have gone. If you don’t think about it, don’t adapt to those extreme changes, you’ll have serious problems in a year’s time.” Having identified the problem, the question was how to work with the concepts. With no major projects cancelled, but a lot on hold, the cites the would-be customer who vows he’ll be ordering, “just as soon as the dollar reaches 0.55 against the Euro.” “What do you do with that information,” he says. “Do you say I’ll just sit and drink more beer until it hits 0.55, or do you understand that that’s the new world order and try to find a solution for the customer ... to understand what he’s really trying to tell you.” One solution has been to form MAN Ferrostaal Finance to “put things into place that facilitate our customers to do business. “If you want to buy a press from me, I’ll bring finance partners to the table, making it no longer the customer’s problem,” he says. The ‘can do’ approach to dealmaking and a new consumables division are part of Haefeli’s response to change since he was appointed in mid-2007. Joining a company which had become “quite introverted”, he has moved the focus to sales, working on relationships with customers and suppliers. The sales team has been more than tripled, with the consumables business creating what Haefeli says is the broadest offering of blue-chip products to the newspaper and heatset segments. A $500,000 investment has delivered a fully-operational showroom to the Melbourne sheetfed market, and there are plans for a similar upgrade in Sydney. “We’re still working on the correct mix, but a lot of the focus has been on doing the small things right,” he says. Selling consumables is a pragmatic reaction to the cyclical nature of the machinery business which has been the company’s core activity. Printers and publishers may not be ready to invest in a new manroland press, MBO folder or Hunkeler finishing line, but are nonetheless in the market for plates, chemicals and other consumables. After a global search, Ben Hartman was recruited from Heidelberg South Africa to run the division, joining the company in time for DRUPA. Two products – Lüscher CTP and the Hostmann Steinberg inks MANF sells directly and under its Exxel own brand – were part of Haefeli’s purview during the six years (to March 2006) he served as managing director of Ferag Australia. And most recently, a strategic partnership with Kodak has placed the jewel in the company’s prepress crown, with the whole of Kodak’s graphic arts offering including equipment, software, plates and chemistry available. And as the global imaging giant reorganises its distribution channels, former local Kodak GCG marketing manager Ross Gilberthorpe has moved to a similar role with MAN Ferrostaal. Relationships with Böttcher and Servicom deliver rollers and blankets to the mix, and as exclusive partner for Mosca, there’s strapping equipment, wire and other consumables. “All of this means we are big enough to put together packages – in some cases this can mean the platesetter, the press, the postpress equipment, all of the consumables, service and spare parts – and we can finance the whole deal,” he says. “And we are one of very few companies (perhaps the only one in the newspaper and web sector) which can do this.” Following the change which has seen Indian single-width press maker Manugraph switch its Australian sales representation to Webco – which has been selling the DGM line, now owned by Manugraph – Haefeli had been actively looking for a competitive replacement, probably from the USA, “while seeking advice from manroland,” he told us at the time. Emphasising the importance of the single-width market, “not only to sell the ‘iron and steel’, but also to sell consumables,” has suddenly become understatement. Haefeli says the company’s internal strategy would not be complete without it – “let’s face it, a lot of these sites are owned by Fairfax” – but he is unable to comment further following the announcement about manroland. What now of the building momentum which led Haefeli to believe that 2009 might indeed be a good year? “There’s so much gloom about that we expect the start of the year be very tough, but after PacPrint09 things will start coming back,” he says. In the light of changed circumstances, the investment in people and facilities – and effort put into raising its image, “what we do and how we do it” – becomes critically important.