Agfa has struck a strategic alliance with Lucky Huaguang Graphics, one of China’s largest printing plate producers, and owned by the government. “The strategic alliance aims to allow both companies to grow their respective businesses by optimising their respective strengths in manufacturing, technology and distribution of graphic prepress products and services,” says the corporate statement.
There is little elaboration. The Chinese business will manufacture plates to Agfa’s specification and to be sold as Agfa products, though does not say whether these will be shipped beyond China. There will a joint venture to distribute graphics products in China. And the statement continues that the pair “plan to expand their cooperation in other areas in the future, allowing both companies to grow their business and brand presence internationally”.
Currently Lucky Huaguang has little distribution beyond China. It has participated in Drupa under the slogan “Just print lucky life” in Hall 4 among the concentration of major Chinese manufacturers. Despite cost advantages, Chinese plate producers have not been successful in shipping their products to Europe or the US. few have been able to demonstrate the consistency and quality and security of supply that European distributors require. This will have to change in order to make an impact in the developed markets and the know-how to achieve this consistency will benefit Huaguang as it expands beyond China’s borders.
For Agfa the appeal is two fold. It will provide the capacity needed to expand its business in China and in the future may provide a low cost way to scale production as well as cut cost of production and distribution to expanding markets in Asia.
Stefaan Vanhooren, president of Agfa Graphics, says: “Joining forces with Lucky HuaGuang Graphics will offer us a unique opportunity to grow our business and to restore our profitability. It is an important step in the further development of our strategy to offer our customers more choice.”
Agfa, like Kodak and Fujifilm, has struggled with price led competition in a slowing declining market and against steeply rising prices of aluminium. The Belgian company has also been edging towards higher market technology products and in graphic arts, towards inkjet technology.
Lucky Huaguang is the larger business with production capacity of 100 million square metres of offset plates, 1 million square metres of flexo plates as well as conventional and PCB films. Its offset plate product range is extensive including a chemistry-free negative working plate that it says has “very good compatibility to the Azura TS”. The company employs 3,000, 800 of whom are engineers.