HP Indigo, an Israel-based division of HP Inc., is probably a perfect model of what Israel would like to see happening to all of its startups.
Once just a startup called Indigo, the firm, established in 1977, has been a pioneer in digital printing: it unveiled the world’s first digital printing press 25 years ago — a printer that likely looked like a toy then but was disruptive for the industry.
Its core liquide electrophotographic ink technology enabled printers to do away with the cumbersome screens and plates of traditional analog offset printing — a commonly used technique in which the inked image is transferred from a plate to a rubber blanket and then to a printing surface. This made it possible to print according to need — not in massive quantities — and still maintain the high quality offered by the traditional presses.
The company was snapped up in 2001 by HP (then Hewlett Packard) for $629 million in stock, and became an integral part of the US printing giant. But instead of becoming just an R&D center for HP in Israel, the company developed into a local behemoth, having both R&D and manufacturing operations in Kiryat Gat and Ness Ziona, employing 3,000 workers locally and accounting for some $1 billion in exports from Israel in 2017.
That seems to be exactly the model of companies that Israel has decided it wants more of: Startup Nation doesn’t just want startups that get sold to foreign companies and become a home for multinational R&D sites; it wants to create companies that generate the full value chain locally – from R&D to manufacturing and sales.
There are some 320 foreign companies operating in Israel today, according to data provided by the Ministry of Economy and Industry. In addition to HP Indigo, companies like Intel Corp. and Flextronics also develop and manufacture in the country. On Wednesday, Intel announced a $5 billion new investment for its Kiryat Gat plant by 2020.
Showing off the future
HP Indigo flew in 750 visitors from 50 countries to Israel this week, some from second- and third-generation family printing businesses, others packaging experts for the world’s leading brands like the confectioner Mondelez International and Tasty.com, to present them with its latest digital printing technologies. For many of the visitors it was a first visit to Israel.
On Tuesday, they listened to a presentation by HP Indigo general manager Alon Bar-Shany, who, dressed in a sweatshirt and black jeans, gave the be-suited and high-heeled attendees a rundown of the Israeli economy and a brief lesson of essential Hebrew words, including boker tov (good morning); balagan (mess), chutzpah (nerve, cheek); lechaim (cheers) and sababa (all good).
On a more serious note, Bar-Shany said that “one of the biggest risks in business is to be comfortable. You need to get up everyday forecasting the next crisis.”
Then, the Italian- and German-, Japanese- and Hindi-speaking businesspeople got onto buses for a 35-mile drive from Tel Aviv, past sun-drenched views of fields made lush and green by winter rains, to Kiryat Gat, a small city in southern Israel, where HP Indigo has its production plant of digital presses.
Indigo brought them to the Holy Land for a chance to showcase its newest technologies in digital printing, all of them made in Israel. The company on Tuesday unveiled its most advanced labels press, the HP Indigo 6900 digital press, which enables the production of high resistance labels for food, household, chemical and pharma uses. The special label varnish developed by the firm makes the labels resistant to water, water vapor, and oil, the company said.
The machine, a new model of the HP 6000 series which sold more than 1,400 presses globally, also allows customers to print with a new range of inks. One creates a silver and gold metallic effect; others glow in the dark; and some enable writing to become visible only under UV light, for brand protection and promotional purposes.
The press also integrates a HP Indigo GEM unit, which allows printers to embellish their products with the first fully digital solution to provide tactile, foil, lamination and hologram feel to the labels. In addition, the firm showcased extended capabilities for its existing machines, and said next month it will ship the first unit of its PageWide C500 Press for direct-to-board post-print corrugated production.
The digital technology that has been pioneered by Indigo — which controls 70 percent of the market, is valued at $22.18 billion in 2017 and is estimated to be worth some $28.85 billion by 2023 — has triggered a revolution in the printing industry. Even so, the digital print industry accounts for just some 15 percent of the $800 billion global print industry, said Indigo’s Bar-Shany, so there is “huge growth potential.”
“The growing demand for sustainable printing, development of packaging and textile industries worldwide, and reduction in per unit cost of printing with digital printers are expected to drive the growth of the digital printing market worldwide,” MarketsandMarkets said in a report.
The digital technology eliminates the need for plates and the cumbersome technicalities needed in the traditional processes of offset printing, allowing for print jobs at the push of a button.
The technology has allowed food and other consumer goods manufacturers to save money and become more engaged with their end users.
Whereas once the printing had to be on mass scale and in one, rigid format, digital printing allows users to become more versatile in their offerings and is in the longer run cheaper, because it allows shorter production times and does away with the need for large inventory. It also enables product manufacturers to create more emotionally engaging products. With digital printing, companies can launch limited edition products, for Father’s Day or Easter, for example, or personalized product campaigns with the names or photographs of end users who can order tailor made packaging.
Coca-Cola, for example, launched a campaign with people’s names on its bottles, while Nescafe printed 300 top new year resolutions on its classic coffee jars, using Indigo printers. Nutella launched a limited edition of its chocolate spread in Italy, France and Germany, while Frito-Lay created a limited edition of party-safe Tostitos, a chip bag that doubles as a breathalyzer.
“We provide the agility to reduce inventory and provide more features,” explained Eli Mahal, marketing manager of HP Indigo, to The Times of Israel. Productivity with a digital machine can be 24/7, he explained, and the speed of the machines is higher. The presses are also able to print on a wide variety of materials, from cartons to textiles and various types of paper.
HP Indigo presses make three main products: labels, to be stuck on products; folding cardboard, like menus and cartons that can be a vehicle for advertising; and flexible packaging, e.g., a bag of potato chips. Indigo is a market leader in each of these fields, Mahal explained.
“I’m here to see the new technology,” said Johan Dierickx, the chief operating officer at smartphoto group NV, a Brussels-based publicly traded business to business e-commerce company that provides printing services for greeting cards, photo books, cards and calendars and offers personalized products like printed mouse pads, mugs and glasses to customers in Europe. “We are well equipped with HP and HP Indigo technology,” he said, with the company owning six Indigo presses, two of which were bought last year. He was keen to see the silver ink capabilities of the new machine, he said, as well as the wide sheet printing capabilities.
Alberto Finetto, of Verona, Italy-based Linea4, a printing service company which has two HP Indigo printers, had just visited the new printing capabilities presented to them for 50×70 sheets on the second floor of the plant. “It is a new format that existed formerly only in offset printing,” he said. “It seems a bit expensive,” he added, saying that for the moment it would likely be more suited for a niche market, with volume still going to offset presses, because of the higher costs of digital in that format.