Dobruška / On the 10th March 2005 Grafitec became part of the KBA group. Four months from acquisition we met with KBA's President Albrecht Bolza-Schünemann and KBA-Grafitec Managing Director Jens Junker to ask how the "inclusion of Dobruška in the KBA family" is going in practice.

Albrecht Bolza-Schünemann: At the start of our cooperation we made some changes in management. We brought a number of specialists from the plant in Radebeul to Dobruška. Changes concerned, above all, operative planning of production, technology and controlling. We worked hard to ensure that Grafitec became part of KBA marketing and trade and it was presented as such in April at the exhibition in Poznan and in May in Brno. Printing machines from Dobruška have become part of the large family of KBA sheet-fed presses. I think the Performa machines look great in the new design.

Jens Junker:  We made changes in the distribution network and found a solution for the existing network of Grafitec sales representatives. Some dealers became part of the KBA network on relevant markets. In some commercial territories the original organisation continues and dealers from both Grafitec and KBA operate. For example, in the Czech Republic the company Kloc sells machines from KBA as before and machines from Dobruška are sold direct. This concerns different segments of the market. The Rapidas fromRadebeul are more sophisticated machines with a higher level of automation, whilst Performas fromGrafitec are standard machines for commercial printing. 

Albrecht Bolza-Schünemann: The distribution networks of KBA and Grafitec are mutually complimentary. Selling large gravure rotary machines, newspaper rotary presses, web offset printing machines and sheet-fed machines for printing packaging is a different matter to small-format sheet-fed printing machines.  We have found a solution for each market. In the USA, for example, the distributor Grafitec America became part of our company KBA North America. Most of the sales and service people came over to our company.

What are the commercial results of the company for the first half of this year? Can you give us any figures?

Jens Junker: We wouldn't want to publish any exact figures, but I can state that we are quite optimistic about sales results. The machines produced this year and others to be produced by the end of the year are already sold to a large extent. In comparison with 2004 there will be a further growth in returns. In the first half-year the trade fairs in Poznaň and Brno had a huge effect on the amount of orders. The original forecast of sales on the Czech market has been fulfilled in terms of crowns. Sales on the Polish market are also exceeding expectations.

What are the differences in demand between the SRB2 and SRA2 formats?

Jens Junker: The growth in interest in the Performa 74 machine is becoming a permanent trend. The demand for SRA2 format machines was also greater than we planned, so we had to also increase production of Performa 66 printing machines. In SRA2 format orders for four and two-colour machines predominate. The greatest share of revenue is in SRB2 format, where interest in four, five and six-colour machines predominates.

How far did you get in the first few months in plans for further technical development of Performa printing machines?

Jens Junker: When, after four months, I review the plan for the acquisition of Grafitec by the KBA group we are actually more satisfied that we decided to go ahead with the acquisition of Grafitec than at the start of considerations, when we carried out short tests and investigations designed to give us more detailed information on the technical level of Grafitec printing machines. The construction of the machines is based on a very sound technical concept. This is particularly the case for the SRB2 format developed for the Drupa 2004 trade fair. The concept is very similar to KBA printing machines using cylinders with double diameter. We made other tests and were convinced that it was a quality machine that needed no principle changes.

After acquiring Grafitec you declared that you would reinforce investment in Dobruška. How has this objective worked in practice?

Albrecht Bolza-Schünemann: The most important investment this year went into renovating and modification of the existing production area. The first investment is intended to increase capacity of machine production of the main components of printing machines. This is only the first phase. Further investment will follow step by step. Investment brings the people who live here more perspectives.

Jens Junker: I stated the actual enumeration of investment in a letter to staff prior to the company holiday. We start with reconstruction of the roof of the assembly hall. We've concluded a contract for supply of a five-axis machining centre for production of cylinders. A plano grinder has been put into operation and in September we will install a hole grinder. By the end of the year we will have bought a machine for tool setting and new source for the plasmator equipment.

When you analysed the strong and weak sides of Grafitec before the acquisition and after declaration of the acquisition, what were your conclusions?

Jens Junker: Immediately after taking over the function of managing director I announced that the strong sides of the company included qualified staff and a very long tradition of development and machine production. First it was textile machines and then offset printing machines from 1956. The company employees are from a technically focused generation binding its future to printing machines. Staff at Dobruška have an advanced knowledge of printing machines and have good enough qualifications to be involved in their development and production.  Another advantage of Grafitec that I've become acquainted with in recent months is the level of service support that the company provides, not only on the Czech market. I've spoken with a range of customers who informed me that Grafitec service is first class and the best in the Czech Republic.  A weak side of the company is the fact that it hasn't been able to invest as much as it has needed to during recent years. We are now working on an investment program that brings new technology for production of parts at a modern level.

What do you say to the fears that following the entry of KBA into Grafitec there will be a rise in the price of printing machines from Dobruška?

Jens Junker: We know that prices are created by the market. Price levels are not set by decisions of the management, but by the overall state of the competitive environment. We offer a price that is in a very good parity to machine performance. When I compare our prices with the competition, we offer customers quality machines at a very good price.

In the interview for Svět tisku after the acquisition of Grafitec the KBA Marketing Director Klaus Schmidt emphasised the big difference between KBA and Grafitec in productivity per employee. How quickly do you want to move in getting productivity up to KBA levels?

Albrecht Bolza-Schünemann: Productivity at Grafitec is lower, but on the other hand we take into account the reasons why it is such. Productivity at KBA and Grafitec cannot be compared in a 1:1 ratio, since the structure of production is still different.      

Jens Junker: Production automation is at a lower level at Grafitec. In terms of units of production there are many more conventional machines in Dobruška than at KBA.

Albrecht Bolza-Schünemann: When we acquired Planet at Radebeul fourteen years ago, productivity there was lower than on the East German railways. But as the company grew economically it production was increased. Most important is economic growth. The situation atPlanet dramatically improved each year. We proceed in steps. Nobody can expect a growth of 100 % from year to year. This year we are looking at a growth of 30 to 40 %. In terms of the development of Grafitec in the KBA group I am very optimistic.

Have you kept the same number of employees?

Jens Junker: Yes. We are expecting more people out of school to take up positions in September. The structure of employees will of course change along with changes in production technology. The need for people in mechanical production will reduce, but we'll need more people for assembling and servicing printing machines.

How is the process of integration of Grafitec into the KBA group proceeding?

Albrecht Bolza-Schünemann: This is the fourth time I've been at Grafitec this year. Our philosophy is that when a unit being included into the KBA Group needs certain decisions made on the financial, production or other aspect of integration, we must accept them.   

Jens Junker: Every week we have several people from Radebeul on working trips toDobruška and people from Grafitec travel to KBA. The integration of both organisations continues.

-gk-