Océ N.V. History

Company Perspectives:

It's amazing what you can achieve when you focus your energies. And at Océ we're focused like a laser. Every bit of our considerable energy is geared to providing cutting-edge printing and copying solutions for professionals. And with every one of our employees dedicated to that goal, it's no wonder we're always pushing the technological envelope.

Company History:

The Netherlands' Océ N.V. is one of the world's leading developers, manufacturers, and distributors of digital and analog copy and printing systems. With annual sales of more than NLG 5 billion, Océ ranks among the world's top 100 information technology companies. Sales of the company's engineering systems place Océ as the world's top manufacturer and distributor in that market. In addition to the design, manufacture, and distribution of its document reproduction technology--including machines and the software to drive them--Océ supports its sales with a wide range of office and copying supplies, as well as after-sale service. In the mid-1990s, the company also entered the booming facilities management market, providing, or contracting third parties to provide, full-service copying and reprographic services to major corporations. As such, Océ was able to offer its customers a total solution for their document reproduction and distribution needs.

1990s Corporate Structure

Océ is grouped in three principal operating divisions, each governing a specific range of the company's product line and targeting specific market segments. In the late 1990s, the company was the world leader in copy and printing machinery for the engineering systems market. Supporting CAD/CAM applications, among others, Océ's range of products included its flagship digital printers, the 9800 and 9700, introduced in 1997, the 9400, introduced in 1996, and the 9600, expected to be launched in 1998. The extension of this line enabled Océ to offer high-speed digital printing to all volume markets. In addition to the company's digital printers--which already accounted for more than 40 percent of engineering systems and 80 percent of total company sales--Océ also continued to manufacture and sell a popular line of analog and inkjet black-and-white and color copying and printing equipment for the engineering systems market. This division, including sales of supplies and services, accounted for more than NLG 1.6 billion of the company's sales in 1997.

Océ's office systems division represented the largest part of the company's annual sales, posting nearly NLG 2.4 billion in 1997 revenues. The company offered a range of both analog and digital machines, targeted primarily at the medium- through high-volume markets. In the digital printer/copier market, the company's growth was spearheaded by the 3165, introduced in the second half of 1997. The company's model 3100 analog copier, introduced at the beginning of 1998, was capable of producing 100 copies per minute. While most of its sales continued to be supplied by sales of black-and-white copiers and copy/printing systems, Océ also began building a strong presence in the growing color copying market. The Océ 3125C, marketed under a third-party agreement, was expected to add medium-volume color copying capacity in 1998. Included under the office systems division were the company's facilities management operations, which saw its sales double each year in the late 1990s. The company added to its capabilities in this area with the December 1997 acquisition of leading U.S. facilities management provider Archer Management Services.

The company's printing systems division was given a strong boost in 1996 when it acquired the former printing activities of Siemens Nixdorf International. The acquisition--nearly doubling Océ's printing systems sales--of the SNI division added that company's leading printing products, and manufacturing facilities in Poing, Germany, and Boca Raton, Florida. The expanded division offered both mid-range and high-volume cutsheet printing systems, and related technologies, including toners and print servers, and continuous feed fanfold and roll-based printing systems. In 1997 and 1998, the company introduced its Pagestream 88 (88 pages per minute) low-volume fanfold printer; a cutsheet printer, the Pagestream 158 DC, offering highlight color capacity at 158 pages per minute; and the Twin PS 1000, the fastest machine in the Pagestream family. The company's primary focus remained on the medium-volume market and on the expanding print-on-demand market, for which Océ adapted its Pagestream systems under the name of Demandstream. Printing systems after the SNI acquisition accounted for NLG 1.45 billion of Océ's annual sales.

In the late 1990s Océ N.V. operated more than 30 subsidiary companies in as many countries. The company's Venlo headquarters remained its primary research and development facility, while the company's research and development activities--representing seven percent of annual revenues--were also conducted in Germany, France, and the United States. Océ's manufacturing facilities were located primarily in Venlo, Poing, and France's Guérande. Parts were typically sourced from a network of third-party producers, while the company continued to manufacture certain strategic elements itself, as well as toners and other printing and copying supplies. More than half of the company's 20,000 employees worldwide were engaged in sales and service.

Océ doubled its annual sales between 1993 and 1997 and also posted consistent profits, which topped NLG 236 million for 1997. The company is listed on the Amsterdam, Dusseldorf, Frankfurt/Main, and Electronic Stock Exchange (EBS) in Switzerland, and its shares are also traded as American Depositary Receipts on the NASDAQ exchange.

From Coloring Butter to Color Copies in the 20th Century

The company that would become known as Océ had a quite different focus at its origin. In 1871, Lodewijk van der Grinten, a chemist in Venlo, the Netherlands, began researching ingredients that could be used for coloring butter. By 1877, van der Grinten had perfected a formula and set up the company, that would later become known as Océ, for manufacturing his coloring agents on a large scale. Van der Grinten was joined by son Frans, who expanded the company to industrial manufacturing of the coloring products, which were used for margarine as well as butter. The company would continue to produce these colorants until 1970, when that division was sold off to Unilever.

By then, the van der Grinten family had developed another specialty. Frans van der Grinten's son, Louis, joined the company in the early part of the 20th century. Louis van der Grinten, who shared his grandfather's background in chemistry, began researching a new area: reprographic materials. In 1920, van der Grinten added the manufacture of blueprint paper to the family concern, overcoming some of the early difficulties of the light-sensitive material, such as a fragile shelf-life and slow development times. During the 1920s, Louis van der Grinten was joined by his brothers, Piet and Karel, who took over the company's butter coloring and production activities, while Louis focused on research and sales. The company's sales were by then already international, developed primarily through local alliances. In the United States, for example, the company's distribution was handled by Charles Bruning, a relationship that would last into the 1990s, when Bruning was acquired by the company.

A German breakthrough in 1923 introduced the van der Grintens' company to a new type of reproduction material: diazo printing. Unlike the negatives developed with blueprint paper, which produced white lines on blue paper, diazo printing offered positive, that is, direct copies, with the added advantage of allowing colored lines on white paper. Louis van der Grinten set to work improving on the diazo process and by 1926 introduced the company's Primulin paper, which would receive international patents and establish the company's international success. Further improvements on the diazo process quickly led to a new name for the company. The new diazo product, dubbed OC from the German ohne componenten, or "without components," proved highly successful, and more than becoming a company-owned trademark, it became part of the company's name. (The 'é' was later added to OC for pronunciation reasons.) Until the 1990s, the company would be known as Océ-Van der Grinten, until the name was simplified to Océ.

While blueprint paper and diazo printing materials would continue to form the backbone of the company's sales (blueprint paper production would not be phased out until 1946), Océ continued to seek improved reprographic processes. Blueprint and diazo could be used for reproducing documents created on translucent materials, but documents on non-translucent papers could still be reproduced only by hand or by using photography--the first method being very time-consuming, the second very expensive. Océ became the first manufacturer to solve this problem, introducing, in 1935, its RetOcé process. RetOcé, which continued to utilize the diazo process, enabled the copying of non-translucent documents. This process would remain the sole method of reproducing, quickly and inexpensively, non-translucent documents for several years. The introduction of the electrophotographic copying process in 1940 added a rival technology. Yet RetOcé would continue as the dominant process into the 1950s, when electrophotography came of age with the first copying machines based on this method.

Going Public and International Expansion: 1950s-70s

Océ went public in 1958, listing on the Amsterdam Stock Exchange. The public offering helped the company fuel its international expansion. In the same year, the company launched its first international subsidiary, in Germany. Other subsidiaries followed in the 1960s, including locations in Norway, Italy, and Denmark. At the same time, Océ began expanding into new international territory through acquisitions, notably with the merger of Belgium's Jobé in 1964; with Ingeniörsuntensilor in Sweden in 1966; Photosia, in France, in 1966; and a similar merger that brought the company into Austria. The acquired companies were absorbed into Océ and operated as subsidiaries.

Acquisition would continue to fuel the company's international growth through the 1970s. CIAP of France was acquired in 1969. The company's moves to establish a U.S. presence took on steam with the 1970 acquisition of former Océ license-holder BK Elliot, based in Pittsburgh, and with the acquisition of another U.S. electrostatic copier and microfilm reader manufacturer, ICP, in 1971. The following year, the company added to its Danish presence with the purchase of Helioprint AS, and entered Brazil with the acquisition of Copirama, while strengthening its Australian position with the majority interest in that country's William Crosby Ltd.

The shift from dedicated document copying firms to in-house office copying systems began in earnest in the 1960s. New technologies, including "xerography" made famous by Xerox, enabled the use of plain paper for copying, instead of the specialized materials still required for diazo and other printing methods. Océ joined in this revolution, introducing its own plain-paper office copier, the Océ 1700, in 1970. In face of the wide popularity of the Xerox machine for low-volume copying needs, Océ's focus turned especially to the more demanding medium- to very high-volume markets. In the early 1970s, the company introduced several new models, each adapted to specific volume requirements.

Xerography had gained an exclusive share of the market. In 1973, however, Océ introduced a rival reprographic technology, called the Océ Copy Press System, which offered copies and prints with the quality offered by offset printing. During this same period, another new technology was under development--laser printing, introduced by Siemens in 1975. Compatible with the growing computer technology, and able to work with third-party data-processing hardware and software systems, the Siemens ND2 printer, which began shipping in 1977, was capable of outputs of 200 pages per minute, while also capable of respecting the page perforations of the continuous-roll paper used by computer printing systems. Siemens' printing division--which would become part of Océ in 1996--continued to introduce new laser printing technologies, including the first color laser printer in 1984, geared primarily to the medium- to high-volume markets.

New Markets in the 1980s and 1990s

Océ continued its own expansion. In 1977, the company stepped up its U.S. presence with the acquisition of Arkwright Inc. Océ's U.S. activity had focused especially on the engineering systems market, but with the success of the copy press system, the company moved to increase its U.S. office systems activity. In 1983, the company set up a new subsidiary, Océ-Business Systems (renamed Océ-Office Systems in 1987). In the 1990s, the company consolidated its U.S. operations into Océ-USA Inc., based in Chicago. On the international, and especially European front, Océ completed its largest acquisition of the 1970s with its purchase of Ozalid Group Holdings Ltd., Océ's chief competitor, adding that company's network of subsidiaries in 15 countries.

During this time, Océ moved into the new markets offered by the rapid advances in computer technology. The company brought out its own laser printer in 1984; color reproduction technologies, scanners, digital copiers, printers, and plotters were also added to the company's product line. While the company's reprographic activities had long supported the engineering systems market--from its original blueprint papers--the 1980s saw Océ target this arena for further growth. In 1983, Océ launched a wide-format, plain-paper copier adapted to the engineering market. The 1989 acquisition of the plotter division of France's industrial giant Schlumberger gave a further boost to Océ's engineering systems activities, while adding new digital and automation technologies. By the mid-1990s, Océ had established itself as the leading supplier of engineering document reproduction and printing systems, with a 20 percent worldwide share and a 25 percent European share.

In the 1990s, Océ would continue to build on its position as one of the world's top reprographic systems providers. By 1993, the company's revenues had reached NLG 2.6 billion. In the 1990s, the company stepped up its investments in the increasingly dominant digital printing market, while continuing to produce its diazo and analog systems. Nevertheless, these technologies were facing a shrinking market as digital systems became more sophisticated and reliable. A reorganization of the company split its printing and office activities into separate divisions. Océ also began moving into the newly opened Eastern European markets, including the Czech Republic, Poland, Hungary, and Slovakia, while also adding new subsidiaries in the booming Asian market, in China, Hong Kong, Singapore, Malaysia, Taiwan, and Thailand. The company also began building a presence in Japan. In Western Europe, Océ's presence increased with new subsidiaries in Spain, Portugal, Switzerland, and Ireland. In the United States, Océ boosted its market strength with the signing of a distribution agreement with Alco Office Products Inc., the largest independent office systems distributor in the United States.

The mid-1990s for Océ were marked by the successful introduction of new models in both the analog and digital technologies, which also included the growing inkjet market. By 1995, Océ's revenues had neared NLG 5 billion. Yet, the company's biggest score came in 1996, when it agreed to acquire the printing division of Siemens Nixdorf International. The SNI acquisition boosted the company's revenues by more than NLG 1 billion in its first eight months; by 1997, the company's revenues had soared to NLG 5.4 billion.

For the future, Océ remained committed to improving its analog copying and printing systems. However, the company clearly looked to digital systems for its continued growth. By the late 1990s, the company's growing strength in this market, including the development of software systems to drive its machinery, had placed it among the world's top 100 information technology companies. The company expected its future products to emphasize color copying and printing technologies--Océ's mainstay for the 21st century.

Principal Subsidiaries: Océ-Belgium NV/SA; Océ-Czech Republic Sro; Océ-Danmark A/S; Océ-Deutschland GmbH; Océ Printing Systems GmbH (Germany); Océ-Espana S.A.; Océ-France S.A.; Océ-Industries S.A. (France); Océ-Hungária Kft.; Océ-Ireland Ltd.; Océ-Italia SpA (Italy); Océ-Nederland B.V.; Arkwright Europe B.V. (Netherlands); Océ-Norge A.S. (Norway); Océ-Osterreich GmbH (Austria); Océ-Poland Ltd. Sp.z.o.o.; Océ-Lima Mayer S.A. (Portugal); Océ (Schweiz) AG (Switzerland); Océ Svenska AB (Sweden); Océ (U.K.) Limited; Arkwright Inc. (U.S.A.); Océ-USA, Inc.; Océ Printing Systems USA Inc.; Archer Management Services Inc. (U.S.A.); Océ-Australia Limited; Océ-Brasil Comércio e Indústria Ltda. (Brazil); Océ-Canada Inc.; Océ Printing Systems (South Africa) (Pty.) Ltd.; Océ Far East Pte. Ltd. (Singapore); Océ Ltd. (Hong Kong); Océ Ltd. (Thailand); Océ Office Equipment (China).

Principal Divisions:Engineering Systems; Office Systems; Printing Systems.

Source: International Directory of Company Histories, Vol. 24. St. James Press, 1999.