£68m turnover Inktec is not making any profit. But founder and CEO Kwang Chung says the South Korean based company is “poised to leap toward a new future to achieve our vision of success”. So what’s that vision, what’s the plan, and where does large-format graphics sit in the mix?
2018 will be a gamechanger for InkTec according
to its leaders. Having recently restructured to
facilitate quicker decision-making, worked to
change what InkTec Europe MD Joey Kim calls its
“DIY mindset”, and about to see the fruition of
investment and R&D in new products means this
should be a good year for what is a significant
sized company – but one that needs to start making
profit. To that end it is reshaping its business, and
in five years “InkTec will not be seen as an ink
manufacturer but as a total solution provider of
digital inkjet technologies” says Kim, who is frank
about what needs to be done and upbeat about
the company’s ability to do what’s necessary to
compete in the global market.
Established in 1992 by Kwang Chung – current
CEO and major shareholder – with the motto “today’s
technology is never good enough for us”, South
Korean-based InkTec has morphed from being a
desktop printer inks company, into large-format
inkjet printer inks and media development in 2000,
moving into large-format UV printer manufacturing in
2006 with the first Jetrix models.
Alongside these developments the company has
expanded into the printed electronics inks market,
and at the time of going to press its £68m turnover
was 48% from digital printing ink, 29% digital
printing systems and 23% printed electronics. You
can expect to see that ratio change quite noticeably.
Forecasts are for printing ink to drop to 38% of
total turnover and printing systems to jump to 38%
(printed electronics to remain a relatively static
proportion at 24%) as “InkTec starts changing
slowly but surely from being a ink manufacturer to a
printing systems creator”.
You might find that an odd line to follow given
that the most profitable part of the InkTec business
is inks, and the least profitable print systems, but
there’s a rationale behind the strategy.
“1992 – 2000 we were really a desktop printer inks
company, and then got into toner cartridges. Our CEO
has a coatings background [in 1985 he started HaeEun
Chem, which is the company that now develops
specialised chemicals to coat inkjet substrates for
InkTec] so when more companies started competing
we started using his coaters for large-format media
too. Then we found we were getting behind the
market with large-format printer ink so we decided
to get into large-format printer development – and
now we want to expand the machinery side of the
business, because it’s easier to develop inks for your
own machines,” outlines Kim.
That’s great for the graphics market of course,
which can expect to see ever more printer offerings
from InkTec – the launch of the LXi7 being imminent.
But, you’ve guessed it, the industrial print sector
is InkTec’s big focus. “It’s the market everyone
wants to get into because of the ink consumption
possibilities,” Kim says quite plainly.
“We have a synergy in that we manufacture inkjet
ink and hardware and we’re developing products
across the board, but the industrial market is where
we hope to enlarge our business territory most. It’s
a new market for us so it will grow fastest.
“We want to bring inkjet technologies to more
industrial operations that were dominated by screen
and offset printing. We are already working with
companies in Korea, such as LG, Samsung, Posco,
installing machines on their factory lines to improve
their productivity.
“The idea is that this will generate profit, which
will come back into R&D, where we’ll continue
development for the graphics business. The honest
situation is that we need good profit from other
parts of the business to plough into graphics
development.”
In terms of the professional graphics market,
it’s hardly surprising that Asia is InkTec’s biggest
market, but Europe is a focus for 2018. “Many Asian
companies are a bit behind in the European market
because they have smaller brand recognition and we
have to be able to prove we not only have product
quality but the right levels of support,” says Kim,
who believes that “in the UK we have done that. It’s
our biggest European market [the UK accounts for
30-40% Jetrix sales across the region] and where we’ve learned to implement strategies for Western
markets. France and Germany are where we have
aims for key market growth in 2018.” He adds that
post Brexit “we may need a small office abroad” to
help meet its needs.
Europe accounts for about 40% (4:4:2 –
ink:hardware:media) of global company turnover from
the unit in which large-format/professional graphics
sits. But there are big plans this year for European
operations. “InkTec Europe is taking over European
distribution channels of Jetrix from HQ, and our
experience and speciality in customer service
and marketing will help sales increase,” enthuses
UK-based Kim. “Therefore, we are targeting a 50%
increase in 2018.”
Kim admits that it has been an educational
process to get his Korean-based bosses to
understand the different mindset here in Europe,
“It’s different from in Korea. Sometimes the Korean
board of directors don’t understand that you need to
present things more nicely here. But it’s a learning
process, and we report to HQ and talk to them about
the European market all the time because it offers a
lot of growth and profit opportunity.”
“InkTec Europe does not operate as a profit centre
for HQ – we use our profits here to build the sales
channel, to market more effectively etc. Also, of the
17 staff at InkTec Europe we have five engineers –
It’s more than we really need, but it ensures next day
support and the Asian mentality is that you provide
near immediate service to you customers.”
A Korean mentality too is a DIY one, which Kim
explains has held back the company to some
extent. “DIY is an ingrained Korean mindset. It’s
gradually changing but it’s quite a shift for InkTec.
We used to want to do everything ourselves, but
we’re beginning to see the value of working in
partnership to get product to market more quickly.”
That means working with printhead manufacturers
like Konica Minolta obviously, with IT companies
in relation to connectivity and automation, and in
doing distribution deals with the likes of Natura
Media “to expand our range and provide more
competitive choices.
“We are facing new challenges every day due to
new competitors and rapid changes in technologies.
But it’s also about customer demand and making
sure you have products ready to satisfy that.”
So where is Jetrix putting its R&D budget, which
averages at 12% of turnover annually? “Currently we are
developing single-pass metal sheet printing machines
and also inkjet label printers, just some examples of
new developments for the next three years” says Kim.
“In the Jetrix range we are about ready with the LXi7
to fulfill market demand not just for speed but for a
machine using UV LED curing. It will come with a roll
option and be ready by mid 2018.”
And what about inks, where of late a key focus
for the company in general has been on conductive
inks development for the printed electronics
sector? “Ink margin is still quite reasonable as
long as we develop new inks for new technologies,
If we are only chasing red-ocean we can have good
volume but can’t compete with products from East
Asia with their low manufacturing costs and less
R&D involvement.,” stresses Kim. “We will develop
many different types of ink for inkjet – from desktop
to industrial – to keep margins higher.
“Continuous innovation, not just in R&D but in
management strategy, will ensure we meet our aim
of being a high tech company delivering something
unique to customers,” says Kim.
