10 September 2017 Digital Printing Technologies

Xaar holds to course in strategic business shift

The internal shift within Xaar towards a more customer-centric model is going hand in hand with its journey to lessen a dependence on ceramics. And it is working says CEO Doug Edwards.

Xaar, the UK’s major inkjet printhead manufacturer, is ready to ship the first 5601 printheads and developer kits to developers. Many are in textiles where speed, fluid handling and quality characteristics of the printhead make it an attractive proposition and alternative to Fuji Samba or Epson heads, according to Xaar CEO Doug Edwards.

Speaking about the Huntingdon company’s interim results, he describes a business that is rapidly building its packaging pillar, one of four on the path to a 2020 target of £220 million in revenue. This effort has compensated for continuing declines in the ceramics sector which has been the foundation of Xaar’s growth, but which in recent years has been falling as the market reaches saturation.

The strategy here is to protect the existing business and to build new customers by convincing them that the 2001 head’s ability to lay down thicker coatings and faster to address demand for textured finishes on ceramics. “The ceramics market is now 85% converted to digital with a lot of OEMs chasing fewer customers,” says Edwards. There are signs that perhaps the ceramics market may be bottoming out, though non ceramics revenue has increased 60%. Of this the graphics arts business rose 33% and the packaging and product decoration increased 54%.

It has returned to the graphics market with a bang, thanks to joint ventures with Ricoh and Xerox. A deal struck with one of China’s largest wide format graphics Oems in the country which has pledged to buy 90,000 1201 heads in the next two years. “It is the biggest ever deal in Xaar’s history,” he says. “The partnership with Xerox for the next bulk platform has delivered the first revenues from the 5501 head. We are pleased about that.”

This forms part of a three-pronged offering in textile printing: the 5601 for high speed single-pass printing, the 1201 scan head for Direct to Garment machines and the 5501 which plays in the middle. It adds up to an offering which competes with Epson at the lower end and with Kyocera and Fuji Samba at the higher volume end.

The 5601 is a close competitor to the Fujifilm Samba, but offers 30% more nozzles than the Samba. When announced at Drupa, Xaar delivered 60 in depth behind the scenes demonstrations. These companies are still on board having received early batches for the head to understand its characteristics, even if a manufacturing flaw affected print head life. The tendency to delaminate has been sorted and Xaar is ready to ship production ready print heads offering a 3pl droplet size.

After investing £30.6 million in its development, the design for the print head has been locked. “In future we can offer different sized nozzles,” says Edwards. “We can run with water-based inks and the 5601 will be strong player in the corrugated and flexible packaging industry.”

Other areas of package decoration are addressed by the acquisition of EPS. The subsidiary supplies bespoke solutions as part of custom designed packaging lines. Now it is hoping to repeat US success through making the products available in Europe.

Sales are accelerating which leaves Edwards optimistic even when 2017 interim sales are largely the same as a year ago, £44.0million compared to £44.5 million. Pretax profits were £7.9 million compared to £8.8 million. The 2016 figures were inflated by one off deals Edwards points out. “It means that the underlying earnings increased 90% and that has perhaps surprised a few people.”

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Thin film design locked

Thin film design locked

After three years development, Xaar's 5601 printhead is shipping to developers with all the engineering and designed locked in place. It will offer competition to Fuji's popular Samba printhead.

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