Heidelberg (Heidelberger Druckmaschinen AG) has reached a further milestone in its planned site and structural optimization measures. The sale of an area of around 130,000 square meters to the VGP Group will create a new, modern industrial and commercial park at the Wiesloch/Walldorf site. Most pilgrims know, but the Heidelberg Wiesloch factory is about 17.3 kilometers from the perhaps extravagant Heidelberg Print Media Academy glass and steel building, which is across the plaza in front of the Heidelberg central train station.
It seems from the press release dated 23 December 2020 that the sale of the 130,000 square meters is only the first past of the company’s real estate divestment. Heidelberg’s Wiesloch/Walldorf site covers a total area of around 840,000 square meters. Of this, about 270,000 square meters are ‘to be newly marketed in the course of the planned site and structure optimization.’ At present, almost 5,000 employees work at the Heidelberg Wiesloch/Walldorf site.
A corresponding purchase agreement was signed on 23 December 2020 with VGP, a family-run European developer, operator, and owner of high-quality logistics and commercial properties. The company has a fully integrated business model and many years of experience along the entire value chain, from land acquisition and development to asset and property management. Heidelberg achieves a purchase price in the mid-double-digit million-euro range on this deal.
“By using space more efficiently, we will save considerable costs at Heidelberg in the future. In addition, we will use the funds this frees up to strengthen our liquidity in times of the Covid-19 pandemic and to press ahead with strategic investments for the future on the path of our digital transformation,” said Rainer Hundsdörfer, CEO of Heidelberg. “In VGP, we have found an experienced real estate developer as a partner who will market the space at the Wiesloch/Walldorf site in a future-proof manner in close coordination with the municipalities and Heidelberg.”
Jan van Geet, chairman of the Management Board of VGP, is also very pleased about the acquisition of the site, “We are very pleased that we have succeeded in acquiring this unique site. In close and trusting cooperation with the seller Heidelberger Druckmaschinen AG, the municipalities, and the city of Heidelberg, we were able to realize the acquisition very quickly. We plan to realign the site strategically and develop a modern industrial and commercial park here for long-term tenants from a variety of sectors. In this way, we want to make a sustainable contribution to the creation of new jobs and the economic development of the region.” Van Geet adds, “Sustainability and energy efficiency are key parameters for the properties developed by VGP. These aspects will also play a central role in developing the VGP Park in Wiesloch/Walldorf.”
The VGP Group currently operates 31 parks in Germany. In Europe, the family-owned company based in Antwerp, Belgium, now operates 76 parks in twelve countries. The partnership with VGP is the first step in this project.
Heidelberg’s restructuring plan gathers pace – our view
Heidelberg’s restructuring plan was never easy, even before the Covid-19 pandemic, because sheetfed offset sales are not nearly commensurate with the three prominent German and two leading Japanese manufacturers’ capacity in total. As we reported in our article on all five manufacturers’ viability, Heidelberg had 11,437 employees in Q3 of FY 2019-20. Although its turnover was much higher than the other manufacturers, this level of human resource seems unsustainable.
However, the company has made enormous strides in restructuring this year. Each of these public steps has been reported by us. These steps include the divestment of Gallus to a Swiss group, the divestment of its chemicals business, stopping the development of its B1 inkjet press, the building of a new plant in cooperation and joint venture with its anchor investor MasterWork in Tianjin in China, and the early payback of some of its debt.
Rainer Hundsdörfer, the CEO of Heidelberg, keeps talking about the company’s restructuring plan and its liquidity, which means that he wants to trim the debt and streamline the company. Every indication, including Heidelberg openly talking about China as its biggest market and its expansion in terms of capacity and technology, seems to be a significant part of this challenging restructuring plan. As an industry observer, one can only say Hundsdörfer appears to have the guts and understanding required. One hopes that he can restore the company to health even as his closest four competitors are also feeling the pain that the pandemic has only brought closer and into sharper relief.