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	A Seybold Reprint Volume 2, Number 7 July 1, 2002 ISSN: 1533-9211 Prepared at the request of Xeikon International

The Latest Word

Status Report on Xeikon International

By Kurt K. Wolf

Poised for success with proven products

The new Xeikon International has regained its balance through its acquisition by the Punch Group, of Belgium. In May, the firm moved to its new headquarters in Lier and, with new management and slimmed-down product line, is coming back on course for success. A new partnership model is being introduced that brings Xeikon closer to its customers and encourages greater involvement by its business partners.

We visited the new management while it was still in the old building in Mortsel. The production equipment was in the process of being trucked to Lier, seven kilometers away. A sense of positive energy was evident in the attitudes of the managers who had invited us in. Joost De Graeve has brought a breath of fresh air to Xeikon. He’s responsible for graphic systems at Punch, and in that role he splits his time between Strobbe Graphics and Xeikon. We were also able to meet with Jan Van Daele, Xeikon’s then interim CEO, as well as Dirk Van Thillo (director of marketing), Ben Devis (director of partner relationships) and Luc van Steyvoort (sales manager for Germany, Switzerland, Austria and Eastern Europe).

The move to the new building in Lier, already planned by the old Xeikon, is having a positive effect on the working climate. Everyone can literally leave the memories of last year’s difficulties behind them. On June 4, after our visit, the administrative offices made the move. A reception for all of Xeikon’s business partners was scheduled for June 26–27 in the spacious new factory and home office.

Proven products. One reason for the company’s optimism is the fact that it is entering the marketplace with tested roll-fed printers, about 2,200 of which have been shipped since 1993. (Half of them—roughly 1,400—are still in active use.) At the same time, the monochrome Nipson operation has been spun off and the sheet-fed CPS 320 D has been discontinued. Since Xeikon has managed to preserve its relationships with suppliers, production of new machines will be able to resume at the new site in June.

The following products remain in the product line:

DCP 320 D. This is the 32cm-wide duplex printer that prints on papers from 60 to 130 g/m² at 130 A4 images per minute. It will print at 70 A4 images per minute on papers up to 250 g/m².
DCP 500 D. This is the 50cm-wide duplex printer. It, too, prints at 130 A4 images per minute on papers from 60 to 130 g/m², but it can reach 100 A4 images per minute on papers up to 250 g/m². It is the only digital press currently available that prints in B2 format, a unique feature that is very valuable in some markets.
DCP 320 S. This is a single-sided label-printing machine, printing CMYK plus white as a fifth color.
DCP 500 SP. This is a 50cm-wide machine optimized for packaging. It prints CMYK, one-sided, on paper up to 300 g/m².
UCOAT. New in 2001, this is a coating unit that can be placed inline behind the printer.
Intellistream. This is the front-end system developed by Agfa. It supports variable-data printing at full machine speed.

Poised for success. With this set of products, Xeikon is clearly positioned in the area of high-performance roll-fed printing. It has only recently begun to see competition in this market. The products are well established, with speeds of 100 or 130 A4 images per minute. The quality of Xeikon’s output is likewise well established, and Xeikon offers the additional unique feature of being able to print to almost any desired length.

According to the company’s calculations, a DCP 500 D that produces more than 80,000 impressions per month is already above break-even. But Xeikon is aware of many customers that print 300,000 or 400,000 per month. The machines being built today are robust enough to handle this volume, and more, without difficulty.

New business model. The company is quick to admit that errors were made in the past, and it has mulled over various ways to make things better in the future.

The company will stick with indirect sales through business partners. But a new partnership model has been developed under which all partners get the machines at the same price. They then get a rebate based on actual sales figures. Partners in the EU will be given list prices, as the EU requires, but they will calculate the actual selling price themselves based on the differing services they offer for installation, training and support. In any case, no one will get exclusivity, so the competition among the various suppliers will keep prices moderate.

Direct sale of toner. Another change is that Xeikon users will be able to order their toner, OPC drums and replacement parts directly from the Xeikon Web site. The toner price will vary, based on purchases in the preceding six months, dropping rapidly with rising usage to a maximum reduction of 35 percent. Users in the EU will get free shipping. Outside the EU, consumables will be imported by service partners, who will pass their import-related costs on to the customer. This arrangement lets Xeikon produce toner as cheaply as possible in its own factory while ensuring that future price reductions are passed along in full to the users. The service partners get a commission to compensate for the loss in margin on sales of consumables.

To make maintenance as inexpensive as possible, Xeikon users can, following consultation with the service partner, take on responsibility for their own preventive maintenance. They can send employees for training and can order replacement parts directly. But they can still call on their service partner in case of an acute problem.

Experienced business partners. Even before it took over Xeikon, Punch had said it favored continuing to work with Xeikon’s direct-sales partners. Xeikon is now talking over its new business arrangement with all of its previous business partners, and it expects to be able to continue doing business with most of them. In Europe, this is the case with SCS Schwarz in Germany, AM Digital in Switzerland, and Artaker Repro in Vienna.

MAN Roland has also expressed its interest in continuing its relationship with Xeikon, but Xeikon would prefer to deal directly with the MAN Roland subsidiary in each of the European countries. The matter is still being discussed. The same kind of relationship is being sought with IBM.

For the U.S. market, Xeikon and business partner Primesource previously operated a joint venture, Canopy, as the sales and support operation for Xeikon products. It was liquidated prior to the sale to Punch. The employees transferred to Xeikon’s U.S. subsidiary, which currently employs about 65 people on the color side and 35 people on the black-and-white (Nipson) side. The Nipson people will leave Xeikon as part of the Nipson spin-off. The resulting office space will be occupied by employees of Strobbe Systems USA (also owned by Punch), which is currently located just two miles away.

Joost Verbrugge picked as new CEO. In the months following Xeikon’s bankruptcy, Jan Van Daele took over the position of interim CEO. As Van Daele had previously served as R&D director within Xeikon, he was well-suited to assume the role of CEO during the transitional period and to focus on identifying the core activities for the future.

On June 7, the board of directors of Punch International appointed Joost Verbrugge as new CEO of Xeikon International. Verbrugge had been CEO of Barconet until the end of last year, when the company was acquired by American-based Scientific Atlanta. Prior to that, he was the president of Barco Asia. In that position, he acquired a lot of experience abroad, which will be directly applicable to Xeikon.

Van Daele will make a career change and move to another company.

Off to a good start. Xeikon International’s management has good reason to be hopeful about the future. The firm is lean, has a new production facility that suits its manufacturing better and has good products with a well-defined market. With hundreds of satisfied users, and with business partners who have had years to learn the advantages of their printing systems, Xeikon’s management can turn its full attention to building and marketing its machines.