EFI Doubles Down on Inkjet

Posted on by Dave Erlandson | No Comments »

Last week I was in Las Vegas, attending the EFI Connect Conference.  As usual there was plenty of gambling going on, but the conference offered additional insight on how EFI is continuing to make big bets on inkjet technology.

At Caslon and PODi the bulk of the market research and analysis we do is focused on the production digital printing market, specifically the document-based market, which includes applications such as direct mail, brochures, books, magazines, catalogs, manuals, business cards, etc.  In this view EFI stands out as the number one supplier of DFE’s and software (primarily MIS and workflow automation).   But thinking of EFI in this way is only half right.  The other half of their business is inkjet related.  In 2015, 50% of their revenue was attributed to their inkjet business. (Fiery and Productivity Software are delivering much better margins and account for approximately two thirds of the profits.)  The percentage of EFI’s revenue attributed to inkjet will rise in 2016 as their new acquisitions take effect.

EFI’s inkjet strategy appears to be to go after any large printing market other than production digital printing. EFI noted there are plenty of great inkjet products in the production digital printing market already and of course the manufacturers of these existing great products are their Fiery partners as well.  However all the other markets seem to be fair game.

EFI is a master at acquisitions and is using that method to expand their inkjet portfolio, the most recent being Matan and Reggiani.  Their industrial inkjet portfolio now consists of VUTEk and Matan super-wide and wide format, Reggiani textile, Jetrion label and packaging, and Cretaprint ceramic tile decoration industrial digital inkjet printers.  And they manufacture and sell the inks that go with the printers.

Not only do these markets provide opportunity for growth of printers and ink they also create additional opportunities for Fiery and Productivity Software.  DFE’s are needed for the new presses and each market has special needs for MIS and workflow automation that EFI can serve.  Each new inkjet market creates new opportunity for growth across the entire company.  And the ink business offers a nice growing revenue stream which is more like an annuity rather than new equipment sales.  It’s an attractive strategy.

Looking forward EFI noted that they see more opportunity for inkjet in the packaging market, which would go beyond labels to folding cartons, flexible packaging and corrugated.

One of EFI’s latest bets was the acquisition of Reggiani, an Italian company which provides printers and inks for the textile market. At the textiles1conference, one of the keynote speakers was Michele Riva, Director of Sales and Marketing for Reggiani.  According to Michele digital printing comprises 5% of a 50 billion square meter annual market, but that digital will certainly grow as new products provide advantages for short runs, shorter lead times and ability to streamline the manufacturing process eliminating steps such as steaming and washing. Plus digital printing is also more environmentally friendly.

 

There are a wide variety of textile applications including signage, fashion, sportswear, home, and automotive. Reggiani has a full range of products including plotters, industrial printers and single pass presses to serve these applications.  Single pass presses have been developed specifically as an alternative to analog presses.

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EFI has certainly grown their inkjet portfolio quickly.  They now print on a wide range of surfaces:  paper, vinyl, corrugated, textile, glass, plastic, aluminum composite, ceramic tile, and many other flexible and rigid substrates.  One sure bet seems to be that if there is a large printing market EFI will be there with inkjet.

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