May 28, 2008 / 3:34 PM / 9 years ago

Printing press makers gather amid growing gloom

DUESSELDORF, Germany, May 28 (Reuters) - The largest trade show for the global printing press industry held every four years is set to kick off on Thursday but darkening skies this time around mean there is little for executives to celebrate.

A painfully strong euro, low cost competition from Asia and an ongoing deterioration in the economic outlook have teamed up to throw a wrench in the industry's high-precision machinery.

"The German printing industry finds itself in a structural crisis," WestLB wrote in a research report on the engineering industry published on Wednesday, recommending clients steer clear of investments in the sector.

"We do not expect any significant positive impulse from the drupa on the sector. The cyclical upturn has been traversed."

Some 1,950 exhibitors from 53 countries will present the newest trends in products and technologies at the drupa fair, which is expected to draw some 400,000 visitors to the massive halls housing machines that can be easily 30 meters long and weigh 200 tonnes each.

Usually the first to suffer when companies start cutting their advertising budget amid a worsening economic outlook, many print shops have had to tighten their belts, delaying or even cancelling their orders entirely, and some are finding themselves out of business.

Consequently, the two biggest manufacturers of sheet fed and web fed offset printing machines, Heidelberg (HDDG.DE) and private equity-owned manroland, avoided going out on a limb with forecasts for drupa order volumes that in the past have been hundreds of millions of euros in new business.

"The outlook from drupa to drupa differs, whether you're talking about the beginning of the recovery in 2004 or during the economic peak in 2000, or as some fear now the downturn in 2008," Heidelberg Chief Executive Bernhard Schreier told reporters at the fair.

While Heidelberg made it big with products like the Speedmaster SM perfecting machine that can nowadays print 13,000 sheets in an hour on both sides, manroland specialised in webfed machines fed by huge coils of paper like the Colorman XXL that prints every third newspaper in the world.

Manroland CEO Gerd Finkbeiner spoke of "challenging internal targets" for his sales force but said it would be "arrogant" to announce a target during a press conference

Nor did he give any indication about when the company may list on the stock exchange, little surprising when looking at how fast investors have looked for the door after Heidelberg issued two profit warnings within less than two months.

This time last year the share was still worth around 36 euros. Heidelberg's stock was trading on Wednesday up 2 percent at 16 euros.

Reporting by Christiaan Hetzner; Editing by Richard Hubbard

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