cooperation” with Gallus
At first sight, the statement from Heidelberg about “further intensifying its successful business partnership” suggested that the German graphics giant had exercised its option to buy all the remaining shares in Gallus Holdings AG. Not so. (Heidelberg has held a 30 percent stake in the Swiss family-owned company since 1999.) Apparently what Heidelberg really meant to say was that it would consolidate Gallus’ results into its accounts beginning with the 2002/2003 financial year. Gallus remains an affiliated company and does not expect any imminent changes to its management structure or a change in brand policy.
Bernhard Schreier, Heidelberg’s CEO, again confirmed the group’s interest in narrow web technology: “With a 6 to 8 percent growth, flexo printing represents a rapidly growing segment of the print media industry. By further intensifying our cooperation with Gallus, we will be able to benefit even more from the growing demand for labels and packaging.” He said the world market for flexo printing presses is generally estimated at approximately €800 million (one euro is worth slightly less than one US dollar), with Europe accounting for about €250 million. Gallus has 500 employees and claims a 30 percent share of the global label press market. Group sales are said to be worth around €120 million.
Any positive financial return from such investments is just what Heidelberg needs at present. In late October it sent shivers around the global printing world when it announced it would cut 2,200 jobs, including some in the US, and seek to make annual savings of €200 million. The decision was partly prompted by “unsatisfactory” half-year results, which saw sales slip 17 percent to €1.9 billion (roughly $2 billion) and a 20 percent drop in incoming orders for print machinery and prepress systems.