A successful entry into the Asian market for the rapidly growing HP Indigo packaging printer is a forerunner for an attack on the local flexible packaging sector.
The US-based company has 15 ePac locations in the United States, and has now opened ePac Silverstone in the UK with plans for a second plant in the north of the country. It stunned the industry this year with announcing it intention to buy 24 HP Indigo 20000 presses.
The industry leader in fast time to market, short and medium run length finished pouches and rollstock, has announced plans to expand into the Asia Pacific region. Newly created ePac Holdings Asia Pacific, located in Singapore, will manage the expansion with the first manufacturing location, ePac Indonesia, slated to be operational in the 2nd quarter of 2020 in Bandara Indonesia. Sales are scheduled to commence in early 2020.
According to Hadi Widayat, director, the aim is to empower local small businesses with flexible packaging products on a par with the big brand owners. “The short-run, quick turnaround philosophy of ePac will bring tremendous benefits for many local businesses that currently do not have the scale, capital, or expertise to compete.
“We will start with a base in the Indonesian market then moving forward to South East Asia and Australia/New Zealand.”
The massive ePac order is credited by HP CEO Enrique Lores as a major factor in the success of the company as it battles a drop in consumable revenues for home and office printing. While overall revenues were stable for 2019, growth in commercial printing is compensating for a drop in the consumer supplies business. Commercial printing includes the PageWide inkjet presses, Indigo, large format, 3D, and some Samsung printers used in the office. It amounts to a division generating eight per cent of HP’s overall $58.8bn in revenue.
According to Lores, despite a fall of one percent in revenue for hardware sales in this division the company had recorded “steady growth in pages printed.” The 3D printers produced double the products they had in 2018 and will double this volume again in 2020.
However, revenue from print supplies, driven by desktop inkjet printers, was down five per cent, underlining the need for restructuring in the way the company approaches the market. The company has suffered from the proliferation of low priced clones encouraging customers to switch to cheaper inks.
The company has already implemented a change in direction, lifting the prices of its printers and reducing the cost of ink, while announcing that 9,000 jobs would go.
“2019 marks our third consecutive year of revenue, non GAAP operating profit and non GAAP earnings growth, with non GAAP EPS up 11 per cent and strong free cash flow of $4bn,” said Lores.
“We delivered an excellent Q4, with 11 per cent non GAAP EPS growth. Our strategy is working, and we are confident in our business heading into FY20.”
