Reconditioned Equipment: The New Alternative

It is no trade secret that sheetfed-offset printing press manufacturers continue to shore up their service offerings and focus less on new equipment sales. I blogged last year about how OEMs such as Heidelberg, Komori, KBA, and manroland face the sullen fact that not very many commercial printers’ budgets can withstand brand-spanking-new hardware investments. A quadrant of PrintCity Alliance’s exhibit at the mega drupa show, this month in Germany, is devoted to the hot topic of press tune-ups. But the need for faster speeds, higher productivity, and better print quality cannot always be achieved cost-effectively with existing equipment, no matter how well it is maintained or how creatively it is tweaked.

Whether to bolster capacity, add new revenue streams, or competitively differentiate with hard-to-find configurations, there are printers looking to add equipment. You may be one of them. And you might be shopping second-hand at an industrial version of resale or “consignment shops,” as the Canadians call them. About a year or so ago, I talked my then 11-year-old son into the practicality of purchasing a refurbished video game system. The idea made sense to him, so he gathered a bunch of old games to trade in (while Dad came up with the rest of the cash, chalking up the experience as a valuable lesson in fiscal responsibility).

Used printing equipment still is a white-hot commodity. So, if a 29-inch, 4-over-4 perfector with coater fits the bill, HowardDirect (formerly Howard Graphic Equipment) had a Lithrone LS press, circa 2007, immediately available at QP’s press time. The 45-year-old firm employs technicians in its rebuilding facility in Ontario, Canada, where this Komori model features a PQC/KMS press management station and automatic press washers. With just 27 million impressions, it’s akin to buying a used car with only 10,000 or 20,000 miles on it. The life span of a sheetfed press can run anywhere between 150 million and 600 million impressions, explains printing industry consultant Ray Prince, the former operations management VP at NAPL who has had his finger on the pulse of offset presses since the early 1960s. If you are in the market for a 40-inch press, HowardDirect has an eight-color manroland 708+TLV with tower coater, but this 18-year-old model has a lot more miles: more than 140 million impressions.

Online auctioneers such as pressXchange.com and Thomas Industries hawk iron on their websites. For the European market, Indonesian reseller Chabelita quotes a 2005 vintage 20-inch Ryobi two-color press with 14.5 million impressions at the equivalent of $58,815 (€45,000), excluding shipping. For a 25-year-old, five-color, 26-inch Heidelberg MOFP-S with 52 million impressions, you’re looking at a $116,300 investment. With no end in sight to the press over-capacity plaguing the printing industry, examples like this abound on the Internet.

The Pre-owned Attraction

The days of “easy credit” are long gone, and many smaller print shops continue to fail and fall. Of those left standing, it seems everybody is looking for deals and steals. One anonymous printer admits to purchasing “an AB Dick on eBay, cheap.” Prince says there is some good equipment to be had on the auction market, no doubt, such as repossessed presses. But, as he cautioned Printing News readers in late 2009 (“Maintaining Equipment (or Not) During Lean Times,” www.myprintresource.com/10265064), there is bad equipment out there, too. People see a low price and think they’re getting a good deal on a nine-year-old piece of technology, for example. “But if the previous owner was struggling, the press may not have been maintained for the past three years,” says Prince. “That represents a lot of wear and tear.”

Pre-owned presses need to be maintained as well. Older presses can benefit from the right service and products to ensure they continue to deliver maximum productivity. To help breathe new life into these presses, Heidelberg Systemservice offers a discount to customers with presses built in 2000 or earlier—if they book service five business day or seven calendar days ahead of time.

Used Digital Market

The other interesting part about my 2011 blog is how still-struggling OEMs are more warmly embracing the idea of selling their own used or “pre-owned” output devices, be they conventional iron or digital presses. Why fight the online auctioneers that are so prevalent these days? If you can’t beat them, join ’em, seems to be the revamped vendor thinking—thoughts seldom uttered just a few short years ago. Like the rest of us, they’ve done the math: zero percent of zero equals zilch.

Seven years ago, Graphic Partners (GP), a 50-employee commercial sheetfed/digital shop in Zion, IL, bought a shiny new HP Indigo press 5000 for producing full-color, personalized direct marketing collateral. For nearly 100 years, the printer had flown undetected by most radar, until HP made a case study out of them. That was then: 2005 seems like the good, old days, after all. Despite the ensuing recession, customer demand for color variable-data printing kept growing.

“We’ve seen high double-digit growth of up to 50 percent,” reports VP Kirk Larsen, who added that approximately 90 percent of his firm’s work today is direct mail. It became a capacity as well as a back-up issue, brought to painful, yet revealing light when their 5000 went down for three days. But Larsen and his GP management team decided they couldn’t afford another Indigo—at least not a new model. They shopped other brands, but preferred the liquid HP ElectroInk’s high reproduction quality, he says.

Eventually, the discussion with their HP rep turned toward reconditioned options, which “would allow us to compete against lower cost alternatives to the HP technology on the light production side,” notes Larsen, whose firm is situated 50 miles due north of Chicago, near the Wisconsin border. “Chicago is a tough market for anyone,” he adds, so GP needed any and every competitive advantage it could get.

Looks Like New

The best thing about buying the reconditioned Indigo, according to Larsen, is that there has been no learning curve. “And you’d think it’s a new press. There was no dust, no oil, the parts looked new,” he says of the pre-owned 5000r (the “r” stands for reconditioned), which was installed last May. “HP even put in a new computer and RIP.” The used machine came with a one-year warranty and is being financed through HP via a short-term (36-month deal), Larsen adds. The “new” addition actually is newer than GP’s first Indigo 5000, which it originally leased, but now owns.

From Hewlett-Packard’s perspective, its reconditioned “r” series presses not only give customers a lower price entry point for an Indigo solution, but they also support the manufacturer’s overall sustainability efforts. Most Indigo presses are sold as leases (with the customer opting to upgrade, return, or purchase the press outright at the end of the lease term), and HP is able to significantly reduce machinery waste through full-press reconditioning of off-lease machines.

“They’re very reliable machines,” Larsen praises, “true workhorses.” His firm’s digital volume ranges between 500,000 to 600,000 clicks per month. “We do very little static color,” he explains, noting that GP uses a half-dozen different types of VDP software, from basic PrintShop Mail to sophisticated, homegrown programs, depending on a project’s complexity.

“Customers today are all about measurable results and ROI,” Larsen says. To give them the qualified leads they seek, GP offers turnkey, integrated marketing campaigns. “We data-mine, drive to microsites, and even do email marketing. Customers have come to expect these services from their printers as they migrate away from agencies,” he points out.

The G7- and FSC-certified firm also has two Kodak Digimasters for monochrome work, as well as a duplicator. Larsen notes that about half of GP’s $12 million in annual sales still comes from traditional offset work. The 30,000-square-foot facility runs a pair of Komori Lithrones—a six-color, 40-inch press with coater and a five-color, 28-inch half size—that are about 10 years old. Larsen didn’t say whether he is contemplating replacing those with reconditioned equipment, but one never knows.

Loading