Xaar, Europe’s leading inkjet head manufacturer, is on course to broaden its market reach and to take its piezo technology in commercial print and other as yet untapped sectors.
However, the Huntingdon company has reported a drop in sales in 2014 after “the exceptional year of 2013”. Demand for ceramics printing, especially from China, had sent sales rocketing during 2013 pushing the company’s sales to £134.1 million. But the freeze in construction projects in China effectively stopped sales in their tracks leading to a revenue last year of £109.2 million.
But this is still 26% higher than in 2012, says incoming CEO Doug Edwards. “We have been victims of our own success. This year is going to be about stabilisation ready to start growing the company again in 2016.”
The company cut 20% of staff worldwide towards the end of last year when it became apparent that sales were not going to recover rapidly. It is now proposing to close its factory in Sweden, though consultation is to take place first. And production needed would be absorbed in Huntingdon where capacity was increased to accommodate future growth, but is currently under utilised.
If the ceramics sector will not be the engine for the next phase of growth, Edwards believes that direct to shape printing can be. A number of integrators has shown how inkjet heads can be included in filling and packing lines to replace printed labels, together with the cost of printing, storing and applying these.
He explains: “I have just come back from the US where I was speaking to big brands about the impact of direct to shape. They love the design freedom it can give them, they know the cost advantages but know also that the technology has to run 24/7. We are starting to convince them that it can.”
The company plans to grow its business in the US from the current 6-7% of turnover through linking with more OEM partners and by exploiting Edwards’ network of senior contacts across the industry in North America.
It launched the 1002 print head in 2013 and has implementations in label printing as well as versions for ceramics, where Xaar’s ability to work with viscous and abrasive fluids is a distinct USP. This functionality will provide the flexibility for direct to shape printing, potentially for 3D and can take the company into new areas.
It has just signed a letter of intent with a company which will create a print bar for another developer to integrate into a digital printing press or into a hybrid printing press, says Edwards.
Further ahead comes the introduction of Xaar’s P4 thin film print head technology. The company is showing prospective partners the first working prototypes of the 5400 printhead. This will be firing aqueous inks for use in commercial printing and textile applications. The availability of modular print bars will make the development task far easier for integrators building presses around the Xaar technology.
But it will take time. The company predicts that this will be a quiet year for sales while the Chinese construction industry catches breath and before demand for replacement heads kicks in. It is ramping up production of the 501 head for wide format graphics.
Edwards anticipates sales for this year will come in at £90 million, in line with the rate achieved in the latter half of last year. Growth will resume in 2016 he says.
The company is paying shareholders a final dividend of 6p a share, 9p for the year, up from 8p. It holds £47 million in cash and deposits, making it well placed to take advantage of opportunities that present themselves.
It is not looking to shed its independence. “I’m here to grow the business,” says Edwards. “We have the opportunity to partner with people. We are not the systems integrator like Domino Printing and we are not going in to the systems integration business. That is an expensive game.”
A full interview with Doug Edwards appears in Print Business magazine and online on 30 March 2015.
Direct to shape can become the next ceramics business for Xaar says new CEO Doug Edwards. The former Kodak board member joined the British company this year and anticipates a year of stabilisation while customers bring new applications to market.
