Bridging the gap between digital & offset printing

Converting Today: How have customers in the packaging and converting sector reacted to the launch of the JETvarnish 3D?

16th Jan 2013

Converting Today catches up with Kevin Abergel, director of marketing at MGI. The digital press and finishing manufacturer, which recently made its foray into packaging converting with the launch of its JETvarnish 3D spot coating machine, talks about the company’s plans in the sector

Converting Today: How have customers in the packaging and converting sector reacted to the launch of the JETvarnish 3D?

Kevin Abergel: The response has been overwhelming, especially from the packaging and converting sector. The reaction all starts when people walk by the machine and see what is coming out at the other end.

What is great is that the first thing people do when they walk by the exit stacker of the machine is stop, take a closer look, and reach out and touch the 3D varnished sheet. This happens every single time, and that tells me everything I need to know about whether or not this machine will have an impact on the future of print and packaging.

Imagine just how potent a printed sheet or packaging becomes in terms of marketing and impulse buying when the first thing people want to do is reach out and touch your product; it elicits an emotional response that cannot be communicated through vision alone.

It’s tactile; people want to interact with the product, and for once it’s not an iPad or a gadget: it’s a printed sheet. I strongly believe that this is exactly what the industry needed, something to make print interesting again.

What speaks to me is that this reaction is not from just printers; it’s from print buyers, the luxury brands, but more importantly, we are experiencing this reaction from average people who do not come from our industry. We are getting this response from the general public.

CT: What types of businesses are you seeing the greatest levels of interest from?

KA: We are seeing, first and foremost, an interest from the manufacturers, those who physically print and finish the end-products, which is to be expected.

What we have been seeing with the new machine, however, is that now print buyers, – meaning the companies and brands who we all know well – are also creating a buzz around the machine, and telling their subcontracted print and packaging partners to come get a closer look at it.

Their reaction was positive, as their first impression was on the actual quality of the finished product, closely followed by the question: “Who has one of these machines that we can contract work to?” As a manufacturer, we couldn’t be happier to hear this, as you would imagine.

The fact that we added our ARC sheet-to-sheet registration system means that we can now register accurately to digital printed sheets, so that is a major market opportunity that we are now actively targeting.

Because our digital UV spot coater, that can do variable data, has no screens, no plates, virtually no setup, and is open to both the short and long run market, it seems evident that our solution is destined to attract printers who have both digital and/or offset print technologies in their production chain.

CT: When will we see the first installations of the JETvarnish 3D machine; and which countries do you expect to be the first to adopt?

KA: The version of the JETvarnish that came out in 2008, the one that only does ‘flat’ spot UV, can be found in more than 40 countries with an installed base of more than 120 units.

The new model, the one that was previewed at Drupa 2012 and released commercially mid-November of 2012, already has a production queue of 25 units that have been sold.

Over the course of the last months of 2012, we have been busy installing the JETvarnish 3D on an international basis. Our installation schedule has us very busy, with several installations per week over the next few months.

CT: How important is the packaging sector to MGI? Do you see it as a growth area for the business, and if so, in what way?

 

KA: We see the packaging sector as a stabilising force in the printing industry. It is not as affected by economic market conditions as the graphic arts industry is. It is well known that when times are bad, one of the first budgets that gets cut back is marketing, which directly affects commercial printers, who in turn, print fewer brochures, flyers, posters, and at lower and lower costs to survive.

Packaging is different, as the market is less affected by market conditions, the digitalisation of media and reduced budgets. Whereas graphic arts is traditionally associated with the marketing budget, packaging is in the production budget, so whatever you buy, chances are it will come in one form of packaging or another, even if you buy it online.

So as long as commerce is there, and companies are making products, those products will need to be packaged, and that acts to stabilise the printing industry.

We realised early on that we had a product in the JETvarnish 3D that could potentially address both market segments in a significant way. The proof is that more than a third of our JETvarnish 3D prospects come exclusively from the packaging sector, a statistic that we cannot ignore.

CT: Was it a concerted move by MGI to target companies in the packaging segment?

KA: We did Emballage this year as a market test to see if the JETvarnish 3D would gain any traction with the packaging sector. The tremendously positive reception we received from both the manufacturers and the print buyers confirmed our suspicions that the JETvarnish 3D indeed had its place in the packaging and converting world. We aim to continue our efforts to establish ourselves in this market.

CT: Emballage is a relatively new show for MGI. How successful was it for you and what trends did you notice over the show?

KA: We had already participated in Emballage in 2008 and 2010, and actually won the Oscar de L’Emballage in 2008 for the original JETvarnish as the best new production machine.

So while we had been received positively by the press and the associations, those shows never translated into many end-user sales. Perhaps we were a little bit ahead of our time; the packaging and converting industry was maybe not yet ready to accept digital as a viable alternative to traditional processes.

Whatever the reason, things have changed dramatically since Emballage 2010. The key buzzwords that I retained from my conversations during this year’s tradeshow were short run, on-demand, personalisation, eco-friendly and added value.

CT: What was the value of exhibiting at such a show?

KA: As earlier, for us Emballage served as a market test to gauge the reaction from industry professionals. What is also important to remember is that digital 3D raised varnish is new on the market. It’s not something print buyers ask for on a regular basis, so we know that there is a lot of work ahead that consists of educating the market on what is now possible with new technologies.

Benny Landa did the same with Indigo for years before digital printing caught on mainstream. So we used Emballage as a springboard to get the word out there that “Hey: 3D raised varnish exists, it’s not very expensive, you can do both short runs and long runs, have variable data, and it could be a good move for you if you’re looking to differentiate yourself”.

CT: How is business at the moment? What challenges do you see your customers facing in what still is a very challenging business environment?

KA: I think that the two are directly linked. Printers today – and this is unfortunate – have switched from competing with one another on quality, which is good, to competing with one another on price, which is bad. This means that the main weapon that printers have today to stay competitive is to erode their margins to the point that they are making very little profit, and effectively leading to the banalisation of print.

What our customers purchase when they choose an MGI machine is the ability to differentiate themselves from their competitors. They are looking to offer something that is so uniquely different, that the products they are putting to market yield a high – sometimes very high – margin for their business.

The JETvarnish, for example, yields an average of 80-90% profit margin per job, and that speaks to the customers. Not only are we aiming to increase our customer profit margins, but we also want to make print exciting again, and that appeals to the brand owners.

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