Heidelberg sells Print Media Academy building

Update on Heidelberg’s liquidity program

Heidelberg Print Media Academy Photo Radosław Drożdżewski (Zwiadowca21)
Heidelberg Print Media Academy Photo Radosław Drożdżewski (Zwiadowca21)

Heidelberg has sold the Print Media Academy building across the street from the town’s central station. Although the glass and steel structure was somewhat symbolic – it may ultimately be seen as a re-enactment of a heavy metal fantasy that went awry as the demand for sheetfed offset presses declined over the past two decades. It is reported that the building is sold to a Luxembourg-based investment company for a low double-digit million Euro sum. The erstwhile owners will continue to lease some office space in a building in a prime location that must have been expensive to build and maintain.

Commenting on the PMA sale, CEO Rainer Hundsdörfer said, “For us, the sale of PMA is the next logical step on our schedule. We are aware that the sale has a signal effect: However, we will remain closely connected to the city as well as the region in the future. At the same time, we are convinced that the change of ownership will open up new, diverse perspectives for the city and the local people.”

The 12-story PMA building is one of the tallest buildings in the university city. It had a company-owned Michelin starred restaurant on the top floor and a bar on the ground floor. Both have since been sold and are open to the public. The building was seen as the centerpiece of a larger project to include research and development and a showroom for its presses. Its inauguration in 2000 coincided with its 150th anniversary.

However, the offset press industry’s decline in the developed countries had already begun, as publicly proclaimed by Heidelberg CEO Hartmut Mehdorn. His successor, Bernhard Schreier, soon launched the company’s joint venture with Kodak to build a digital press followed by its factory building in Qingpu just outside Shanghai in 2005. Heidelberg eventually left the digital press joint venture for Kodak to go it alone. Ironically, in the PMA building’s subterranean auditorium, Gerold Linzbach announced the tie-up with Fuji Dimatix to build the now stillborn Heidelberg B1 digital inkjet press.

The 13-metre high ‘S-Printing Horse’ sculpture in front of the PMA building in Heidelberg weighs 90 ton and was designed by artist Jürgen Goertz Photo Nikolai Karaneschev, Panoramio
The 13-meter high ‘S-Printing Horse’ sculpture in front of the PMA building in Heidelberg weighs 90 ton and was designed by artist Jürgen Goertz – Photo Nikolai Karaneschev, Panoramio

The PMA building with a long rising escalator in an atrium and its upended verticality with heavy metal cylinders combine several metaphors of scale in a modern glass ‘transparent’ frame. However, its association with ‘Academy’ was always tenuous and unclear. It did not refer to the city’s excellent university. The 13-meter high three-legged horse sculpture in steel was the only cultural reference. As a modern re-incarnation or vision for German technology, or communication and culture, the building was a failure. The new owners will require great imagination to introduce some softness, purpose, and viability to the structure.

The Heidelberg liquidity program in the pandemic year

Heidelberg had previously sold its head office building and research and development building within walking distance of the PMA tower. Before Christmas 2020, the company announced the sale of around 130,000 square meters at its leading manufacturing site just outside the Heidelberg in Wiesloch/Walldorf to European developer VGP, who will create a modern industrial park there. The purchase price of this parcel was said to be in the mid-double-digit million-euro range.

Heidelberg’s Wiesloch/Walldorf site covers an area of 840,000 square meters, and the December sale of a parcel was only the first part of the company’s real estate divestment. An additional 270,000 square meters is available in the planned site and structure optimization. Even in December, one suspected that the PMA building, which is about 17.3 kilometers from the factory, could easily be the next on the block.

Chemical and Gallus Group – sale and return

In the first half of December 2020, Heidelberg sold its BluePrint Products NV and Hi-Tech Chemicals BV, including its Belgian production site for printing chemicals to DC Druck Chemie GmbH (Druck Chemie), a subsidiary of Langley Holdings PLC, UK. Langley Holdings is an international engineering group that produces capital goods for a wide range of industries worldwide and is also the owner of Manroland Sheetfed. Heidelberg received a purchase price of approximately 20.5 million Euros (about Rs 183 crore).

Meanwhile, on 29 January 2021, Heidelberg announced that its sale of the Gallus Group to Benpac had fallen through. The five sites of the Gallus Group and around 430 employees will remain with Heidelberg and perhaps require cash resources. It was a deal that was supposed to net Heidelberg approximately Euro 120 million. Overall, the company’s restructuring seems like a day to day process in which raising cash by divesting non-focus businesses may be a prerequisite to streamlining more resources.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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