Joint ventures are a good strategy when two strong players try to make something new without one trying to buy the other. Instead it gives the opportunity for both companies to pool their expertise for mutual benefit. Joint ventures are not unknown in the Graphic Arts industry. In many cases they center around sales and service of products or between two different areas of business (hardware and software or products and services). Two established hardware manufacturers starting a joint venture for a new product platform is rather rare. Accordingly, it came as a surprise as Koenig & Bauer and Durst announced a joint venture in April 2019.
In an interview CEO, Robert Stabler gave an insight into the nature of the joint venture, the status and an outlook of things to come.
Robert Stabler, Courtesy of Koenig Bauer Durst
The focus of Koenig & Bauer Durst is packaging presses with full width imaging arrays for the packaging market. The company itself is a rather lean organization designing, planning and managing the products while R&D and manufacturing stays with the parent companies. Headquartered in Würzburg, Germany (where Koenig & Bauer is located as well) the company has 15 to 20 employees and is still scaling up.
The idea for the joint venture was born out of the product concept of the VariJET 106 – originally presented at drupa 2016. Initially Koenig & Bauer (at that time named KBA) announced the press concept with Xerox supplying the inkjet imaging unit, although there was no hardware shown at drupa. The press was to be presented live later that year. This did not materialize in 2016 however and after further delays Koenig & Bauer had to concede that the Xerox imaging unit did not meet the specs required. Koenig & Bauer, looking for a new partner, got in contact with Durst and after exploring several options decided for Durst as partner for the inkjet unit. Now the VariJET does feature a press base, including feeding, delivery and flood precoat & varnishing units from Koenig & Bauer and an inkjet imaging unit from Durst including prepress workflow. The joint venture is managing the development, with detailed R&D work and manufacturing of the press portions sourced out to the parent companies.
The joint venture is now in the process of identifying the best beta-site(s) for the VariJET 106. The first press is planned to be at a customer site early next year. It is also planned to show the press publicly at drupa 2021 in April next year.
The joint venture is not only about the VariJET however. Both companies integrated their existing post-print corrugated presses in the joint venture as well, which were developed in the respective companies beforehand. The Durst developed Delta SPC 130 became available earlier this year after successful trials. The Koenig & Bauer developed CorruJET 170 has just finished beta trials and became fully available now.
According to Stabler the rationale for the joint venture is simple: share the considerable development expense for high-end digital presses and draw from the strength of each partner company. Koenig & Bauer is bringing the packaging application know-how, market access and sheet transport knowledge to the table and Durst is providing the expertise in inks, inkjet imaging and workflow. A major argument for the cooperation was also a similar corporate culture, a common language and good understanding among the company leaders – which is crucial in a 50-50 joint venture.
As a small start-up company Koenig & Bauer Durst is relying on the channels of the parent companies for the first customer contact. In North America both parent companies will sell the joint venture presses, while in Europe typically either a Koenig & Bauer or Durst distributor will take on the corrugated products, depending which distributer is deemed better suitable in the respective country. The VariJET sales lies in the hand of the Koenig & Bauer team, as the company already has a strong market presence in folding carton print via their sheetfed offset presses. Sales focus is on North America and Western Europe, with the other regions following eventually.
For more in-depth sales talks specialists from the joint venture will join. Apart from the detailed technical knowledge they can calculate economic models for the prospects. Stabler sees the biggest leverage in a transformative sales process: starting with proving the economic advantage for short runs and then expand the opportunities: breaking down long runs, just-in-time, personalization,… He sees that the current crisis is propelling a change in business processes, especially for FMCG packaging.
Currently the joint venture markets three presses: The VariJET 106, Delta SPC 130 and CorruJET 170 in corrugated and folding carton. Stabler would not rule out moving into other packaging segments in the future, but rather sees the company focusing more on those two segments and gaining a strong market position in both.
There are some challenges ahead like the increasing number and competition among digital press providers for packaging markets. Leading the transformation process for converters is not easy as well, from adding the right sales consultants to keeping the whole process from package design to shipped product in mind, while considering changing demand patterns, government regulations and environmental considerations. In finishing the joint venture can leverage the Koenig & Bauer finishing portfolio e.g. in die cutters but will need to be up to date on additional solutions as well. For prepress the company relies on the Durst Workflow Plus. There are no aspirations to own the end-to-end workflow but the company offers consulting on how to best fit the press in the full workflow. While the integration into a wider production workflow for corrugated is usually less complicated, moving into folding carton means that the full production workflow is getting more complex as well.
Koenig & Bauer Durst adds some very interesting products to the roster of digital packaging printing solutions. Drupa 2020 would have been the ideal springboard to make the Joint venture better known. The company plans on exhibiting at drupa 2021. In the meantime, we hope to hear more about the joint venture and product developments.