Silent World of Esko-Graphics, The

Print Action, Apr 2005 by Tribute, Andrew

The developments at Creo, and the eventual planned acquisition of that company by Kodak, preoccupied much of the graphic arts media for the past few months. While this was going on another manufacturer of Computer-To-Plate (CTP) devices was quietly repositioning itself with some very drastic moves. While this column is about the repositioning of Esko-Graphics, a link can be drawn from this company's decisions to what happened with Creo.

The rationale for writing this column comes from a very significant decision made by Esko-Graphics to withdraw entirely from the manufacturing and distribution of its PlateDriver line of visible-light CTP engines. The PlateDriver line of 4-, 6- and 8-page-format engines was once the cornerstone of Esko-Graphics' business strategy. Within just two short years of the substaintial merger that created this company, suddenly this major area of the company's business is being withdrawn. This is the first time that I had seen a major player in this industry make such a significant change in strategy without being forced into it. My curiousity left me wanting to look into this story to assess why Esko-Graphics would do such a thing.

In my search, I found that the offset CTP market for commercial printers is changing incredibly quickly, which is why the link with Creo can be made. Creo found that to succeed in selling CTP into the commercial and newspaper marketplace, it was necessary to be in control of plate distribution channels. In building up its plate business, Creo ultimtely changed the business dynamics of the industry by forcing a descrease in the profit margins to be made by supplying CTP devices. This effect resulted from pushing lower plate prices to support selling its CTP engines at a very low profit.

Short on consumables

Esko-Graphics found that without a consumables business to generate ongoing revenues, selling high-performance CTP engines hardly covered its costs. The company assumed that this situation was likely to continue, as the distribution of CTP is becoming more and more of a completely consumable-driven business that is under the control of The Big Three players: Agfa, Fujifilm and Kodak.

Esko-Graphics also recently announced that it will not be bringing its Espresso conventional-plate CTP system to market. This again reflects the market situation of needing consumables in the high-end platesetter business. Esko-Graphics sees that the window of opportunity for conventional-plate imaging has almost closed up in the past year. The company clearly feels that bringing Espresso to market, and any subsequent follow-up family of products, is not a solid business investment. Instead the company has decided to invest in areas where it can consolidate its market-leading positions.

For Esko-Graphics, consolidating a market lead means getting deeper into what it refers to as the pre-production area of the packaging market. The company believes it is the leading supplier of hardware and software solutions for this market. In one segment of this market, the company is a dominant supplier of CTP devices for flexo plates. Esko-Graphics claims that 90 per cent of all digital flexo plates are imaged on its GDI flexo prodcution units. And of course the packaging and label market is one of the only areas of printing that shows promise for significant growth. In fact, packaging is an area that all of the major CTP suppliers are chasing after.

Big on software

This industry generally overlooks the fact that Esko-Graphics is a major software company. At drupa 2004, the world's largest printing exhibition held once every four years, one of the highlights for many journalists was Esko-Graphics' Scope workflow. Scope is without a doubt the most complete workflow solution for packaging, and is also a competitive workflow for commercial printing.

Scope's viability in the markeplace was given credence in mid-March when Agfa and Esko-Graphics announced that they had entered into a reseller agreement which allows Agfa to sell DeskPack and Plato products to the packaging market in the United Kingdom. A similar agreement has been reached in Spain. The deal allows Agfa to add file creation applications to its prepress portfolio for packaging printers. Esko-Graphics' DeskPack range of plugins for Adobe Illustrator and Adobe Photoshop and the Plato step&repeat/ nesting system, lets Agfa offer a complete workflow solution - from file creation through production.

It is the manner in which Scope extends outside the normal area of the packaging workflow through its range of interfaces and plug-ins. It is also fully JDF-enabled. With these tools, Scope is able to reach back into the creative areas for both graphic design and the structure design of packaging. Because of this, the workflow extends even further back, moving beyond the designer and into the hands of the brand owner. This reach can be seen in the way it links downstream into the distribution of the finished packaged product, where planning of the delivery pallets, and positioning of the product on the shelves of the retailer is handled.