Xeikon NV History

Company Perspectives:

Xeikon's mission is to develop, produce and market digital color printing systems and related consumables specifically designed to meet the quality, speed, liability, cost, variable content and on-demand requirements for the digital color printing market.

Company History:

Xeikon NV is one of the pioneers of color digital printing technology for the professional printing market. Based near Antwerp, Belgium, Xeikon manufactures a line of digital color presses sold through a worldwide network of distributors. The company also functions as an OEM (original equipment manufacturer) for providing the digital press cores of industry giants' products such as Xerox's DocuColor 70, IBM's InfoColor 70, Agfa-Gevaert's Agfa Chromapress, and Nilpeter's digital presses.

Xeikon's product line centers around three digital color presses, the second-generation DCP/32D and DCP/32S, and, introduced in 1998, the DCP/50D. Both the DCP/32D and the DCP/32S print to the A4 (European) or A3 (North American) paper formats. The DCP/32D is a duplex (double-sided press) capable of printing up to 4,200 full-color, double-sided A4 pages per hour. The DCP/32D is capable of printing to a variety of paper stock; the use of Xeikon's Variable Data System defines a page into data segments, which permit the changing of the images of individual elements for each printed page at high speeds. The DCP/32S extends the DCP/32D's range of materials. Developed as a simplex (single-sided) digital color press, the DCP/32S prints to a variety of materials, including plastics and other substrates, tapes, and films, making it an ideal companion to the label printing market. Both the DCP/32D and the DCP/32S can print continuous rolls up to 307 mm wide and 11 meters long.

The DCP/50D, introduced in 1998, represents the world's first digital color printer providing eight-page-plus duplex printing in the B2 size standard. Two versions of the DCP/50D offer printing capacity to either the paperboard or the flexible packaging printing markets. In 1998 the company also introduced a fifth color unit and opaque white print toner, which could be adapted to the company's DCP/32 and DCP/50 series printers, extending the color range from four-color to five-color systems. Opaque white toner also extends Xeikon's print possibilities to the transparent materials market. Also introduced in 1998 was the DCP/50S, a simplex B2 printer for the packaging industry.

Publicly held Xeikon posted revenues of US$87 million in 1997. The company, traded on the NASDAQ stock exchange, is led by President and CEO Alfons Buts, and by Chairman and company founder Lucien De Schamphelaere. The company's primary competitor is Israel's Indigo N.V., another digital printing pioneer.

Founded in the 1980s

Considered by many printing industry analysts to be nearly as groundbreaking as the creation of the printing press, the arrival of digital technology in the printing industry in the early 1990s began to revolutionize not only the printing industry, but the marketing, packaging, and publishing industries as well. Traditional offset printing involved a series of steps to prepare an image to be printed. While offering high-quality print images, offset printing nonetheless demanded high turnaround times. In addition, the cost of the setup process for an offset run prohibited offset printing from being cost-effective for short-run print orders.

Digital printing technology provided a solution for the high turnaround times of offset printing. Instead of the multiple steps needed to produce an offset-ready print run, digital presses eliminated the make-ready time, while offering greater flexibility for proofing and other typically time-consuming processes. With digital printing, a print run could be prepared entirely as data, which in turn could be easily manipulated, changed, or even interrupted and replaced by a different print run. In addition, digital presses offered new printing opportunities, especially the ability to print a different image for each page in a print run. Print orders could now be personalized, without becoming economically unfeasible. Although offset printing continued to be more cost-effective for large print runs, digital printing began to challenge the traditional method for short print runs. During the 1990s, continued refinements in digital printing technology enabled digital presses to compete with offset presses for medium print runs as well.

One of the pioneers of the digital printing revolution was Lucien De Schamphelaere. Born in Flemish Belgium in 1931, De Schamphelaere built a 40-year career with Agfa-Gevaert. Among De Schamphelaere's achievements with Agfa was the leadership in creating and implementing a process control system for the production of the company's film products. From there, De Schamphelaere was instrumental in forming the company's Electronic Imaging System Department, which introduced the world's first LED-based, 400 dpi Postscript printer, the Agfa P400, at the start of the 1980s.

Where most people began to look forward to retirement, De Schamphelaere instead looked toward beginning a new career. De Schamphelaere had become convinced that digital technology could be adapted to professional quality color printing. In August 1988 De Schamphelaere left Agfa to set up Xeikon NV, in Mortsel, near Antwerp. De Schamphelaere was aided by strong investor support from Agfa; by the beginning of 1989 he had succeeded in rounding out Xeikon's investor base. Starting with just five employees, Xeikon began to build up its team, reaching some 15 employees over the following year. Another sign of Xeikon's closeness to Agfa was the company's location on an Agfa-owned site.

Xeikon would remain, in large part, a research and development house for its initial years, as the company sought to transform De Schamphelaere's concept for a digital color press into reality. De Schamphelaere's team continued to enjoy strong support from Agfa and its investors. Xeikon was not alone, however, in seeking a color digital printing solution. Whereas the giants in the printing and document reproduction industry also were seeking to develop digital color technology, Xeikon's chief competition would come especially from Israel's Indigo, which was developing a parallel technology based around the company's patented liquid ink. Indigo would announce its first digital color press for 1993.

Xeikon was able to maintain its competitor's pace, however. In June 1993 the company unveiled the first prototype of the DCP-1, the digital color press that would provide the basis for the company's full-scale product line. By August 1993 the company was ready to begin beta testing of the machine, setting up a number of beta sites with eventual customers around the world. The following month, the DCP-1 was unveiled at the annual IPEX convention in Birmingham, England, where Xeikon and its digital color press was discovered by the worldwide printing and graphics industries.

Until then, Xeikon had existed as a research house. The development of the DCP-1, and the strong industry response for the press, would encourage Xeikon to develop its commercial arm. By April 1994, when Xeikon first began shipping its machine, it already had booked a strong portfolio of orders for the DCP-1. By the end of that year, the company's orders had risen to more than 100 presses. The move into full-scale manufacturing and commercial sales prompted a steady expansion of the company's payroll. By 1995 the company listed more than 160 employees; by the end of 1997 the number of employees had grown to more than 300.

The young company's revenues for its first year of commercial operations were encouraging, as the company closed 1994 with sales of more than US$20 million. Although Xeikon continued to post operating and net losses into 1994, the industry's acceptance of the DCP-1 had only just begun to build. Orders for the DCP-1 remained strong throughout 1995, averaging some 60 machines each quarter. By the end of 1995 Xeikon's revenues had climbed to US$81 million. The company also had turned a profit, of some US$700,000.

Digital Color Printing in the 1990s

Industry acceptance of digital color printing, although slow at the outset, nevertheless held great promise for Xeikon's future growth. In the United States alone, estimates approached some US$50 billion for Xeikon's targeted short-run (less than 5,000 copies) market. With Europe offering an equal potential for growth, and fast-developing markets in other areas of the world, Xeikon's leadership in the digital color press segment placed it in a strong position to capitalize on the building market momentum. The company recognized that, while building its commercial business, its competitive edge would come from its emphasis on research and development. Even as the company's growth brought it more and more into the commercial and manufacturing sphere, Xeikon's research and development staff would continue to form some 25 percent of the entire company payroll.

Aiding Xeikon's early development had been its close relationship with Agfa, which incorporated Xeikon technology into its Chromapress line of digital color presses. Xeikon also worked on developing other OEM agreements, including a mutual agreement with Barco, which had acquired nearly five percent of Xeikon in 1994, to incorporate the DCP-1 into Barco's pre-press and RIP systems. Meanwhile, Xeikon had continued to expand its technology. In November 1994 the company introduced its Variable Data System, which allowed single-pass personalizing of individual pages. The DCP-1 also was extended for support of flexible printing substrates. The next development in the DCP-1 would occur in March 1995, when Xeikon revealed its DCP-1/F2, offering dual-channel printing and in-line finishing, with compatibility with a variety of industry data formats.

Xeikon already was working on its second-generation presses. To fuel this development, as well as its manufacturing and commercial expansion, Xeikon went public in March 1996, listing on the NASDAQ stock exchange and becoming only the second Flemish company to do so. Less than six months later the company's new investors were rewarded with the launch of the Xeikon DCP/32D digital color press. The move into public status also enabled Xeikon to expand its range of OEM partnerships. The company's presses quickly began finding new names under the IBM, Nilpeter, and other brands.

The DCP/32D, a duplex press capable of printing to some 300 types of substrates, was joined by its companion system, the DCP/32S, a simplex press directed especially toward the packaging and label printing industries. The introduction of the Xeikon second generation was greeted enthusiastically, and the company saw its net profits rise to more than US$1.8 million.

At the end of 1996 Xeikon also made the determination to expand its distribution activities by creating a network of VADs (value-added distributors). Although the company continued its own direct-sales activities, the VAD network provided the company with more extensive coverage, in particular on the international scene, while the individual distributors picked up support and service activities. By the end of 1997 Xeikon had successfully built its VAD network to some 40 members, including the United States' PrimeSource and other printing supplies heavyweights. In a move to deepen its North American penetration, Xeikon also set up a U.S. subsidiary in Chicago.

The 1997 year proved significant in other ways. After adding Xerox as an OEM partner for Xeikon press technology, Xeikon introduced a new press. The DCP/50D debuted in September 1997, representing an industry breakthrough as the first digital color press capable of printing to the B2 size. The DCP/50D would be joined by a single-sided version in early 1998, expanding the press's range to the packaging industry. In 1997, in addition, Xeikon purchased a research and development unit from Agfa.

Xeikon was beginning to outgrow its original quarters, and the company began looking for a new larger location in the Antwerp area. The company, which had grown to some 340 employees, also marked an important milestone in early 1998: the sale of its 1,000th digital color press. In September 1998 the company introduced a fifth color unit for its presses, as well as an opaque white toner expected to be of interest in particular to the packaging industry.

In the ten years since Xeikon's founding, the company had made an impressive leap from think tank to full commercial organization. But in the late 1990s the market for professional-grade digital color printing that Xeikon had helped to create had only just begun to develop. Xeikon's extensive emphasis on research and development placed it in a confident position to maintain its market leadership.

Principal Subsidiaries: Xeikon America, Inc.

Further Reading:

• Van den Broek, Guy, "Xeikon zoekt nieuwe vestingsplaats rond Antwerpen," De Financieel-Economische Tijd, May 16, 1998, p. 9.
• Ward, Gareth, "1000th Digital Press in Xeikon's Sights," Printing World, November 3, 1997, p. 4.
• "Xeikon Develops New Product Initiatives," Paperboard Packaging, June 1998, p. 80.
• "Xeikon Tempts the Digital Taste Buds," Printing World, May 18, 1998, p. 22.
• "Xeikon verbetert records," De Financieel-Economische Tijd, February 19, 1998, p. 7.

Source: International Directory of Company Histories, Vol. 26. St. James Press, 1999.

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