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Flexo plate production in times of crisis – part 2

25 May 2020
Uwe Stebani, General Manager Xeikon Prepress

In the first part we introduced the lessons of the corona crisis; part 2 examines whether digital printing offers solutions to these lessons. In some cases, the current crisis is seen as a trigger for further automation in the manufacture of print products [1]. We have also shown in the first part that in flexo plate production, a still very manual process, follows a highly digitized data flow in pre-press [2]. It is therefore obvious to assume that digital printing with its “direct-to-print” promise will be the winner in the competition between the different printing technologies. Does this mean that digital printing will survive the corona crisis almost undamaged? And therefore, after the crisis, digital printing will begin its triumphal march into packaging printing?

Table 1: Impact of the Corona crisis on the digital printer vendor revenue by application
Source: IT Strategies [3]


Let us first look at digital printing in the crisis. In a current study, IT Strategies estimates the effects of the crisis on the different applications and sales markets of digital printing [3]. The sales of digital printer vendors (printing machines and consumables such as toners and inkjet printing inks) in the specific applications are examined.

The table clearly shows that digital print providers have to expect a significant decline in sales in 2020, too. The print-on-demand book printing together with the printing of school books, as well as the classic transaction printing (invoices etc.) is seen as somewhat crisis-stable, while other applications suffer losses. This is not surprising, since the corona crisis is not a crisis in a market segment due to technological change or even disruptive innovations, but a sales crisis caused by an economy that is completely shut down for known reasons, be it in the industrial sector or in the service sector.

Another look at the table shows the expectation of a smaller slump in the packaging sector (highlighted in green). What is striking is the sharp decline in digital corrugated board printing, according to IT Strategies mainly due to expected low investment activity in 2020 in the comparatively very capital-intensive machine vendor business. As a result, digital printing cannot escape the general trend. This leaves the exciting question of what will happen after the end of the Corona crisis. Does digital printing offer solutions that are preferred to other technologies when investment activities return?

The current crisis will leave its mark on the printing industry, sometimes not as expected. Rumors in the market say that tissue product suppliers have decided not to print on toilet paper in order to match the current run on these products. Who knows whether this additional embellishment level will regain its old relevance in the future. Some commentators expect digital printing to become a crisis winner due to shorter supply chains and thus faster availability of printed products. Inventories could thus be kept at a lower level in order to minimize working capital problems in the event of a drop in sales. Conversely, when sales resume, the inventory could be replenished faster. However, these are not new advantages of digital printing, and so far this business model has failed due to the significantly higher costs of digitally printed packaging. Digital printing is based on proprietary technologies in the toner sector (liquid toner and dry toner), and on a system approach print-head/ink in the inkjet sector (with the known difficulties for third parties to get in between). Very high quality levels for print-heads, driver electronics and consumables add further cost to the system, leaving digitally printed products more expensive than conventionally printed ones at higher run lengths for the foreseeable future. Selling the advantages of digital printing to companies active in the FMCG sector often ends up with the marketing departments, as they easily accept higher prices for the advantage of fast design changes and shorter run lengths, e.g. for kick-off of marketing campaigns and regional test runs of product launches. In return, for the high volume applications, the print buyers set the prices, as packaging has to fit to specific requirements of the packed goods, and otherwise simply adds costs. However, it could be that in the future, security of supply will be assigned a higher priority. It is higher in digital printing due to the system-related higher digitalization and automation compared to conventional packaging printing.

Which solutions will flexo prepress operations offer here in the near future? We at Xeikon have some exciting news for you – STAY TUNED (and HEALTHY) for more to come soon…

References:
[1] Colin McMahon, How COVID-19 is Accelerating Industry 4.0; Keypoint Intelligence, published on April 9, 2020.
[2] Flexo plate making in times of crisis – part 1, published April 30th, 2020; thermoflexx.com.
[3] IT Strategies, The Evolving Impact of the Corona Virus Upon Digital Printing Print Provider and Equipment Provider Industry; I. T. Strategies, Inc., April 2020; www.it-strategies.com.