23 July 2020 Business

Heidelberg continues realignment with sale of Gallus

After 20 years involvement with Gallus, Heidelberg is selling the rollfed label press business to a Swiss packaging group.

Heidelberg has sold the Gallus label press business, raising €120 million to continue its transformation. The sale leaves Heidelberg as a sheetfed only company that it insists remains in label printing using sheetfed litho technology, for glue applied labels and the growing In Mould Label sector.

The deal was announced after European stock markets closed on Wednesday and on the eve of the company’s annual general meeting that takes place today. It is part of what Heidelberg calls a systematic pursuit of the company’s realignment “while facing up to the challenging situation created by Covid-19”.

Heidberg CEO Rainer Hundsdörfer, told the company's annual general meeting last week: "This sale, the completion of which is still subject to some conditions precedent and which our Supervisory Board still has to approve, shows that we are serious about focusing on our core business. We significantly strengthen our liquidity and our equity - this helps us especially in times of Corona.:

Heidelberg took a first 30% share in Gallus in 1999 at the time when it owned newspaper and heatset web presses. The share was increased in 2014 to 100% ownership. As a result of this transaction Ferdinand Reusch, Gallus owner, acquired 9% of the shares and became the largest shareholder in Heidelberg. Today Ferd Reusch AG owns 7.6% of Heidelberg's shares.

The deal means that for the second time Heidelberg has sold an inkjet label development. In 2014 it sold the Linoprint based business. Now it is selling the Labelfire, an inkjet press using Fujifilm Dimatix printhead mounted on a Gallus ECS340 frame and using Heidelberg workflow, colour management and press control technology to knit the two parts of the business.

“We are selling our narrow web rotary and rotary flexographic printing activities to focus more closely on innovative solutions for the entire printed sheet value chain,” says Heidelberg CEO Rainer Hundsdörfer.

The buyer is Swiss company Benpac which supplies print lines for aerosol cans and for both plastic and metal tubes. These are bespoke manufacturing lines often supplied to the manufacturers of the products inside the packaging.

Benpac becomes owner of two Gallus businesses in St Gallen and another in Langgöns in Germany; Heidelberg Web Carton Converting and Menschick Trockensysteme. In all these employ 430.

The two companies will continue to cooperate after the transfer of ownership. “Heidelberg will continue to manage the sales and service of the callus portfolio in close cooperation after the takeover,” says a joint statement. Heidelberg will also continue to supply the imaging unit and associated consumables for the Labelfire press.

Hundsdörfer adds: “We will be retaining our in house digital expertise and, by collaborating with Benpac on the Gallus Labelfire, we will also be making further progress with the digitisation of conventional presses. At the same time, we will remain a major supplier on the growing label market with our sheetfed offset presses.”

There is little overlap between sheetfed litho and flexo and narrow web label printing. Even the largest packaging groups keep their label and carton operations separate and only very few commercial printers have shifted into label production.

In the company’s annual report this year, Heidelberg calls labels a “promising market segment” valued at 7% of the total printing industry, with 30% of this accounted for by digital printing. “Above average growth rates are anticipated” for digitally printed labels it adds elsewhere.

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Heidelberg is continuing its relationship with Gallus, handling sales and support for the machines, including the Labelfire. A Gallus press is also at the heart of the €5 million clean room development to produce printed electronics, an opportunity that is reckoned to be worth $20.7 billion by 2025.

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