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Executive Talk

Digitalisation forces Elanders to diversify

Printed packaging and digital printing will continue to show strong growth, while traditional printing will plummet even more in the future, according to Kevin Rogers, head of Elanders Group’s print and packaging business in Asia.

TEXT: Jan Hökerberg
15 JUNE, 2018

Early in January 2015, when Kevin Rogers was working in his office in Newcastle, where he was the head of Elanders’ operations in the UK, he got an email from Magnus Nilsson, CEO of Elanders Group. The subject line of the email was: “Something to think about”.

What Nilsson wanted Rogers to think about was whether he would be interested in becoming the head of the company’s print and packaging operations in Asia, based in Beijing, and also a member of the group management team.

“These were indeed two very interesting things to consider,” says Rogers. “After the initial excitement, I started to wonder what my wife Vanessa would think about this, because we had just got married the year before. So I called her to discuss it and we decided we should go on a scouting trip to Beijing. On the journey back home we decided that I should take this opportunity.”

So he moved to the Chinese capital with his wife. His stepson Drew, 17, joined for the two first years but is now studying at a boarding school in England while Rogers’ two children from a previous marriage – daughter Neeve, 13, and son Jay, 10 – stay with their mother in the UK.

30

The number of years that Kevin Rogers has worked with digital printing.

Rogers, who was born in Newcastle in 1969, has been in the printing industry all his working life and joined Elanders in 1999, when the Swedish company acquired the UK-based Hindson Print, where he was digital print manager. Today, this UK facility is five times the size it was when Elanders bought it.

“When I started working with digital printing some 30 years ago we used magnetic tapes and big floppy drives”, says Rogers. “Then the internet came and changed everything.”

Elanders established itself in China in 2005, when the current CEO Magnus Nilsson set up the print and packaging operations in Beijing, following in the steps of one of its key clients, Sony Ericsson. At that time, Elanders was mainly a printing company, but with rapid digitalisation and, as a consequence, a decreasing demand for printed matters, Elanders embarked on a transformation into a more diversified company by acquiring a number of companies within supply-chain management and e-commerce.

“Today, we have more than 1,000 employees in China with 10 facilities in Beijing, Shanghai, Xiamen, Chongqing, Chengdu, Shenzhen and Hong Kong. The supply-chain operations, which are headquartered in Singapore, represent the major part of our business. We take care of warehousing, pick-and-pack, container consolidation, exports, freight forwarding, and so on. We also assemble some products for our clients such as personal computing equipment and automotive parts,” says Rogers.

Elanders are focusing on some selected industries, such as automotive, electronics, fashion and lifestyle, healthcare and life science and industrial. Some of the company’s major Swedish customers in China include ABB, Clas Ohlson, Seco Tools, Volvo Car and Volvo Trucks.

Printed packaging is probably the only safe and sustainable part of traditional printing that has a future.”

Rogers believes that traditional printing will continue its decline: “With the escalation of digital media the future for printing will be turbulent and I expect that in the next five to 10 years, we will see a big reduction in demand. The younger generation are much more comfortable reading and accessing information on their smartphones, tablets and desktops,” he says.

“Printed packaging is probably the only safe and sustainable part of traditional printing that has a future,” says Rogers.

Digital printing is, however, still growing and will continue to grow, he believes. Digital printers can now handle big sheet sizes and the printing speed has also improved.

“The quality of digital printing is improving year-on-year and can now even be compared to offset. Today, most people can’t tell the difference,” he says.
The packaging business will probably increase, because of the rise in domestic consumption and the Chinese government’s initiative on the environment.

“We can see clearly in Beijing that government pressure on environmental issues is really intense and many printers are being forced to leave Beijing. Being a Swedish company that is very focused on being green is definitely an great advantage for us,” says Rogers.

The quality of digital printing is improving year-on-year and can now even be compared to offset.”

3D printing is a growing technology that will have plenty of impact in the coming decade. In 2017, Elanders established a mega-hub in Singapore for 3D printers.

“It is actually a global distribution centre for 3D printers. One of our customers is a leading producer of 3D printing equipment. When the machines are manufactured, the customer sends them to us and we take care of the global distribution

“3D printing will have a very big impact on a number of industries. The obvious issues are design and prototyping but I also think we will see localised 3D printing centres that can produce spare parts on demand locally, which will reduce costs and improve lead time,” says Rogers.

“We already see it in a number of sectors, such as consumer electronics and healthcare, but I think it will touch every sector at some point in the future. I’ve been to some closed-door sessions about 3D printing and what I’ve seen so far indicates that future possibilities are almost limitless,” he adds.

From a printing company to a supply chain specialist

Elanders was founded in Gothenburg, Sweden, in 1908 and was for more than 80 years a family-owned company with most of its business in Sweden, producing among other things telephone directories for the government and technical manuals for big corporations.

In 1989, Elanders was listed on the Stockholm Stock Exchange and with the businessman Carl Bennet as new owner the company grew into an international player through several acquisitions in Europe and, later on, also in North and South America.

When digitalisation hit the printing industry, Elanders reacted quickly and diversified the company’s businesses.

The acquisition of the Singapore-based Mentor Media in 2014 meant that the Elanders Group doubled in size from a turnover of around US$250 million to almost US$500 million and it gave the company a true supply-chain platform to continue to build on.

In 2016, the German company Logistics Group International (LGI) was acquired and Elanders doubled its turnover again to almost US$1 billion.

In 2017, Elanders signed a contract for the acquisition of 80 per cent of the shares in the Hong Kong-based company Asiapack, which also has operations in Shenzhen.

Today, the company calls itself an integrated provider of supply-chain solutions, print and packaging solutions and e-commerce. The supply chain business represents around three-quarters of the turnover.