This article first appeared in Future Print on June 12th, 2019
Recently, I, Marcus Timson, talked to Paddy O’Hara of IIJ about his view of inkjet and how he sees it developing. IIJ is a business that has grown into a leader in the world of industrial inkjet development and in this interview Paddy gives his view and some examples of how IIJ are developing solutions to niche problems by using inkjet as an enabling technology.
Has Inkjet in new markets really taken off or has it stalled?
We are seeing the normal hype curve scenario where initially, people believe everything is possible and their imagination has not met the technical reality. Take, for example, high-pressure laminates. The reality is that the tech is more difficult and expensive than previously imagined. So decor hasn’t quite taken off in a mainstream way.
Our business model is much more about solving niche problems that add value and this for IIJ offers excellent potential.
Take, for example, edge banding. The technology design is the same as 2.4 metre flooring and it is a good business for companies like us. Edge banding itself is the finish applied to the side of furnishings. Doesn’t sound huge, but it’s a significant market for us. Also, window blinds and more are printable in digital. Whether eventually high-pressure laminate will go to inkjet is really a cost-driven thing. I’m not convinced that it’s imminent.
Why has Inkjet and one of its core value propositions (of being economical with short runs) not really taken off more quickly?
Because the analogue guys have not just sat on their hands. They have responded both to the threat of Inkjet and also made their models and tech more compelling for shorter runs.
Therefore, really small volumes have become even smaller as analogue has become a lot better. Labels, for example is a success story, but comparably, the cost of inkjet ink and tech is quite high so there is a trade-off between the two.
I guess we (the Inkjet world) have two choices. There is a race to the bottom which doesn’t help anyone or a different way to value add where Inkjet does not come into conflict with analogue but rather complements or does something completely unique.
Give us an example of this?
We have established a really good stream of business with our work with covert track and trace. You cannot do this on analogue. Some of it is for anti counterfeit, but another example is cross trading. Whiskey sold to Latvia sells at a lower rate relative to the local economy. It is less to this market than say UAE which is far higher. The whiskey producer doesn’t want the cheaper product being sold in places where it shouldn’t be for a price that’s too low or too high. By adding track and trace they (the producers) can counteract this.
On tobacco tax and duty stamps everyone has to have a unique code. You get a situation where you can get copies made easily. So we have made a solution where the ink is invisible.
Cost wise for labels if you are going to get a solution onto an actual press – you find a way to solve the customers’ problems or give them some value add to increase their business.
We are good at finding niche problems that we can solve and we tend to be the first in the market. However, if we only focus on this it isn’t easy to just have a ‘one-off.’
But, we are also making sure wherever there is a problem that we solve, we can also then sell this onto multiple clients so we get the cost of the R&D back. If you do it as a consultancy business then it just won’t fly. But if you do it first with one customer in a way that allows it to be resold, that first customer gets the benefit of a lower cost solution.
Imagine single line packaging track and trace with new ink and high speed and it takes you 18 months to solve it all. If we charge all of our customers for the time spent on the R &D then this print device would be astronomical and not commercially viable. In itself, this might work for a large corporate client, but for us, at IIJ, we find larger organisations are not usually the ones that come to us first. One of the problems is that when people find us they have already bought something that doesn’t quite suit their needs and unfortunately their budgets are already reduced.
So companies often buy the wrong product?
Yes. Buying a stock product sometimes doesn’t work out. If a customer can go to one of our competitors for an off the shelf product, there is a question as to why they would come to us in the first instance. They like us as we are very responsive and expert but they have to have that engagement with the others in order to find us.
One of the problems we find in the US is that we are not a large organisation. So a labeling company will choose not to select us at the start as we are not Fujifilm or Screen. They get worried about our size. That is why we are closely working with KM Business Solutions, so we can use their sales channel to sell our products alongside theirs and this is where we will both win we think.
For years we ran into people who would buy an Indigo even if it isn’t quite right for the job. We don’t have the ability to compete here – there are always people who only want to buy from large brands as this provides them with some kind of comfort.
People tend to come to us when they cannot solve the problem elsewhere. And we are the solution providers, not the box shifters.
Has digital print been guilty of developing the wrong products?
Yes, sometimes this does occur as per the prior question. For textile, the original entry for inkjet was small scanning dye-sub products. This meant lots of small entrepreneurial companies popping up and resulted in high ink sales. These new inks were lower in environmental impact. Then the big suppliers said we want the single pass tech, and the inkjet industry dutifully obliged. So now the same ink tech that damaged the environment in the first place is back. Unfortunately, this also killed off many small innovative companies. So what was a lucrative market for inkjet machinery producers, having thousands of machines with a small amount of heads now is a low amount of machines with many heads, which actually doesn’t make sense.
So it isn’t a digital textile revolution?
We don’t need the word revolution really as it is evolution. We see companies adding Inkjet. Not using it as a replacement. When analogue people try new analogue tech it is not about revolution. It is not a case of either or and rather a hybrid idea where you mix and add.
Is industry 4.0 a reality and is Inkjet a part of it?
If you do everything in one big plant it is not good for business in the future. The world of manufacturing is digitising albeit at a slow pace.
Furniture is printed on gravure in large centralised printers. If you can get this decoration to take place further down the supply chain, then it is a lot smaller and can be distributed around the world. It’s about less stock, less travel and it’s better for economics and the environment. Same with packaging printers – why not push the ability to customise further down the supply chain and closer to the consumer? This will be something that changes in the future.
At the moment there are also a lot of big companies in control of the markets. In Ceramics, inkjet was an enabler, now, the big guys have squeezed the market. I think we’ve seen distorted market forces where the legacy companies twist the market to suit the traditional status quo.
What is the biggest barrier to growth?
It is a combination of factors really. It is a significant investment, so customers want references, and you can’t do this as inkjet is new so this is a real problem. Purely, in replacement terms, inkjet cost is high and this is a barrier. Previously, it was productivity, speed, and reliability but now we are solving this.
If I look back over 20 odd years of Inkjet, it was only 10 years ago you couldn’t rely on the tech, but now that it works, the customer tends to have more issues with the ripping time on the software etc.
Now, much of the tech has improved, it is now becoming a commercial and communication challenge.
Inkjet is a production technology, not a marketing one. And this is a challenge as marketing guys love the potential but production people are obviously motivated by other factors.
Inkjet in packaging will have a big future and the shelf appeal of a product is enhanced with versioning and personalisation. But production guys couldn’t care less as all they want to know is how much money?! How much will it cost?! For egg box decoration it will always be a ‘price compared’ application. I’m afraid there is a lack of imagination. Marketing guys love it, production guys want the best price.
Is Ink still the main technical problem and/or challenge?
Ink can be an issue but ultimately it is all about ink and that’s where the money should be made. Inkjet inks are difficult to formulate. There is a lot of innovation to get the inks to do what people want. If you take the analogy of pharmaceutical R&D, the cost of the pharmaceuticals comes from the R&D costs not the ingredients. I think it is the same in inkjet inks because the R&D costs are so high. There is some very clever chemistry but again it comes down to the cost – water-based inks for flexo are around 3-4 euros per litre and for an inkjet version you are looking at 10 times this.
Is this down to an ignorance gap?
Yes indeed. Much of the time, customers fall into the trap of running an entire like for like production comparison. However, for wallpaper we could show and prove that inkjet at speed is still possible, and for labels, you can do this too. The crossover is clearly there so you can do these calculations and getting in front of customers and having these discussions is actually now possible.
I was talking to other manufacturers in our industry. We agreed that the first sale can take years. When they get the machine on site, they can see what is possible and the potential. It’s amazing how quickly sceptics become converts. But they will not tell their friends about it as they want to keep this advantage to themselves.
Inkjet is an enabling tech and has a great future, just not a revolutionary one and I think we should be happy enough with that.