Basically, we have been in the printing blankets business since 1946. Then in the late 1980s, we began transitioning ourselves, beginning with the release of our Graphica 9500 printing blanket product, and we established ourselves as the market leader with what is still the number three selling product. Then we became involved with making sleeves for the Heidelberg Sunday Press and we started asking ourselves, "What is our charter? What are we really doing?" So then we sat down and said, "We are really doing more than just blankets now, so maybe we should start expanding our horizons". So basically that’s where we realised we were becoming more involved with transfer media. We kind of adopted that as our charter, and that’s when we added the flexographic sleeve products from Rotec. Then we added the pressroom chemicals, so that all fits together and enables us to be right there where it all happens, with the ink, the fountain solution and the blankets all coming together.
How easy was it bringing all these new products on board?
It has been very good for us. What we’ve found is that when you’re going into the pressroom, it’s still about providing service. It’s more than just saying that we have all these products to sell, it’s all about how these products come together. We have a long way to go in terms of taking advantage of what pressroom chemicals can do for blankets and vice versa. It has also been good in the sense that we’re starting to learn about the interaction between different consumable products and being able to go in and provide assistance to people. We are starting to see some activity in that. I think what we are also seeing is that economically it makes sense to work in these terms. You can make two calls instead of just one by combining your sales forces.
With the consumables market so competitive, how does Day stay on top?
We still try and look at the value proposition, and I think that historically our print blanket surfaces are able to transfer the ink to paper better than any other in the industry, and we continue to develop new technology and invest heavily in research and development. The other part is we are the worldwide market share leaders. There is a little bit of momentum that creates, but I don’t think that sells products in itself. I think being the major supplier of sleeves has helped us at some of the bigger printers because if they have a sleeve press, sleeves become a significant part of what they are doing. So it is a combination of the technology, the service and having the right products. As a blanket manufacturer, we have more people out there on the ground, and most of our people have technical backgrounds. It is a dynamic process as paper changes and ink changes constantly. It does have an impact on the blankets.
How important is Australia and the Asia Pacific region to your business?
It’s very important. The Australian market is limited a little by its size, but when we look at where our opportunities lie, Australia is right up there. The way we are organised right now, Brent Stephen reports directly to me and he has responsibility for the whole Pacific Rim, except for Japan, and it has been a successful market for us. 50 per cent of our market and profit is from international operations, and while that does include Europe, the Pacific Rim has been a successful market for us. There is still market share there, and nobody really is well established in all these markets. It’s a key market and has been good for us.
Do you have a specific strategy for the region?
We are building a new facility in Malaysia for pressroom chemicals, and what we want to do is expand our capability to manufacture and export out of Malaysia into other areas, although we do have manufacturing in Australia. We’ve entered into blanket converting in Australia so we could get back to where we are taking a little more control of our destiny, and we’re also converting in Hong Kong. So we’re trying to build upon that. Generally, our strategy is to capture some market share in those areas.
Why did Baldwin’s bid to buy the Kompac system fall through?
Basically, Baldwin had some other situations going on. They were selling some of their other divisions and they didn’t have the time or inclination or the capability to do it. So we’re operating the business on a day-to-day basis right now. It’s a profitable part of our business, so we’re continuing with it. It is a great product.
Why then are you keen to sell it?
To be honest the biggest reason is, when we look at our charter, we’re looking at consumables, and you really sell those through a different channel. We talked to Baldwin and that was a good fit for them because that’s what they do, and it’s not so much what we do. If someone like Baldwin had the business, they could grow it faster than we can, even though we are out there every day making sales.
What are some of your company’s recent successes?
With pressroom chemicals, we have really entered the heatset market in the USA and UK in a big way. I think the technology we have developed in the US combined with what we are doing in the UK will allow us to leverage it into other markets where we are not currently as strong. We have a good base of business in Australia, and there aren’t as many heatset operations in some of the other countries, but we have the products now to grow those markets. We’ve also had some good successes with silicones globally. I think one of the successes is our recently signed deal with Heidelberg, which will see us become the sole licensee in 2004. That’s already established us in the eyes of people as a major player, and I think that will be successful. We also have some new products running that will be coming to Australia, especially for the web market where people have been looking for more durable blankets. AP