Esko Majors On Packaging As Print Margins Squeezed

Esko-Graphics is to focus on the packaging market to offer what it described as value-adding services that combine hardware and software products with a growing selection of customer services.

Esko-Graphics is to focus on the packaging market to offer what it described as value-adding services that combine hardware and software products with a growing selection of customer services and consultancy.

In the commercial printing sector, the company said it would concentrate on Scope workflow software, on smaller format CTP devices for polyester and violet plates and on Espresso, the company's four-up computer-to-UV-plate (CTUP) system.

The company added that changing the strategy for commercial printing would create a number of redundancies in several areas of the company, mostly related to violet CTP.

In total, up to 15 per cent of Esko-Graphics' total workforce may be affected.

"When asked by customers for advice on what strategy they should adopt, we have a straightforward answer - understand the drivers of your business, make clear choices, build innovative extensions to your existing strengths and help your customers reduce costs and create value," said Kim Graven-Nielsen, president and chief executive officer of Esko-Graphics.

"We follow exactly the same principles for Esko-Graphics.

We see the rapidly changing market dynamics in the graphics industry and have evaluated the feedback from the many people visiting us at Drupa 2004.

We now make the choices that will best serve the interests of our company and its customers and that will keep Esko-Graphics at the forefront of the industry," he added.

The company's packaging activities currently account for over 60 per cent of its revenues.

Sales are growing strong in all regions and have increased by 11 per cent.

Esko said the products it introduced at Drupa have been well received by customers and prospects and further growth was expected for the rest of the year.

"Packaging is our major flagship today.

We have earned an industry reference position with unique value-adding solutions and with many products that are leaders in their respective segments", commented Rene Delbar, the company's senior vice president for marketing.

The company claimed that its CDI platesetters image over 90 per cent of the digital flexo plates used worldwide and that more than 1,700 Kongsberg sample making and digital conversion tables are installed in 50 countries.

"The Packaging market is a healthy and growing business environment, attracting many new customers.

We have decided to put more focus and resources towards this booming part of our activities, to grow and expand it even further," concluded Delbar.

Distribution and service to the packaging markets will continue through Esko-Graphics' direct sales organisation, as well as through qualified resellers around the world.

The company said its commercial printing market is served by many suppliers and shows little or no overall industry growth.

Graven-Nielsen said: "Fierce competition leads to price pressure and low margins.

It becomes very difficult for us and for many other offset CTP suppliers to maintain a sustainable business in this segment".

Despite more attention and endorsements for violet CTP from the industry, the market development so far has been constrained by the limited availability of plates, he added.

"Considering both those elements, we have decided to stop further investments into our Platedriver violet CTP product line and to direct our efforts towards growth areas where we have a strong product position," continued Graven Nielsen.

Esko-Graphics' will refocus its distribution organisation for commercial printing towards its expanding OEM and reseller channels, carrying the DPX, Platedriver Compact, Dotmate CTF and Eskoscan product lines.

Scope workflow software will remain an important part of Esko-Graphics' offering to the commercial printing market said the company.

The company will continue to offer customer services for the installed base of all hardware and software products, directly or through distribution partners.

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