High Tech Features

Scitex Giant Wakes

By Ronny Lifschitz


yoavsScitex at long last got its act together again. Last week it proudly announced the establishment of a new subsidiary that would employ a unique digital printing technology developed in Israel. Scitex President Yoav Chelouche, who has been the butt of many barbs by a captious press, was in a position to declare that the digital giant was back, standing tall.

“Globes”: Yoav Chelouche, what is APP’s business plan?

Yoav Chelouche:“We’ve developed an inkjet print-head technology that’s very fast and very reliable. It enables the use of a broad spectrum of ink and various liquids. The technology is good for massive and industrial printing, such as wallpaper, packaging, and disks. The major advantage of the business plan is to get into several markets at the same time. Our strategy will be to make this entry together with partners in each of the chosen markets. Two or three cooperation programs, which are still not to be elaborated upon, already exist with regard to entry into unique markets.

“We’ve developed the technology over the last four years, and now we’re going to use it to create very high-speed printers for wholly new applications. It’s uniqueness is the ability to print on special materials at very low costs: wallpaper printing, for instance, which is going to be one of the first applications. People will be able to order customized wallpaper. For instance, something personal, such as photos from their latest journey, etc. In this way, the stock plants and businesses must keep will go down. They’ll print only what’s ordered by the customer. In this way, we’re in fact going to create a totally new market of printing customers.”

What’s the “thousand start-up companies” theory?

“I’ve never heard this expression, but I’m prepared to adopt it. In the last three years, Scitex invested very large sums in in-house entrepreneurship, including technology entrepreneurship and procedural and administrative innovation. In digital printing, we have a joint venture with German company KBA to build a digital printing press. It will be an automatic printing press with automatic plate loading and digital exposure. Through this project, we’ll turn the printing press into something simple and easy.

“Our venture with British Telecom continues to move ahead. It’s based on communications and Internet software developed in Israel within Scitex. We realized that bringing them to market would require cooperation with a communications provider. That’s why we set up a joint venture called VIO with British Telecom, and we’re already selling in the US, Europe, Singapore, and Australia. It’s a joint company based in London and owned 50%:50%. We already have more than 100 customers, including some of the largest printing and graphics companies in the world. At the moment our major task is to increase the number, in order to create a sufficiently large user community.

“The company supplies software for linking up with a broadband network, with British Telecom filling the role of communications provider. The software enables high-speed and high-reliability image file transmission, and creates a virtual community of graphic artists and print specialists linked to each other through the network. We’re now building an infrastructure that enables high-speed communications provision for the completion of tasks such as proofing and approving print jobs. In the future, it will enable operations such as printing orders.”

Just a minute. Are you getting into e-commerce?

“It’s still too soon to say that. We’re now building the software and the community, and later on we’ll present them with e-commerce tools.”

In what other areas are you introducing innovations?

We’re applying business innovation to old products. We recently entered a partnership with Israeli company RTimage. It enables access to image bases via the Internet. It’s possible, for instance, to get through the Internet into the data base of a certain printing house, and to approve – or not – the proofing for a printing project. It helps the printing sector to get into the Internet era. And that’s not the only example.

“The digital printing division, for instance, has developed a system for printing the first editions of books through inkjet rather than offset. It appears that half the cost of any first edition comes from storage of unsold copies. By using inkjet printing, it’s possible to supply very short runs that free publishers from the need to maintain large warehouses. The first machine is currently being installed in Dayton, Ohio.”

What is the Internet’s impact on Scitex?

Scitex is being affected on several levels. One of them is cutting down production time thanks to high-speed communications. We’re electronically linked to our suppliers. We recently did some outsourcing operations, involving, for instance, all our logistic system.

This year we switched to e-commerce. We entrusted an international shipment company with maintaining our logistic system. In order to accelerate the shipment of spare parts and goods, this company keeps for us a stock of spare parts, materials, and finished products. In so doing, we’ve succeeded in cutting down 6,000 sq. m. storage space, as well as in improving customer service.

Under which terms will Scitex consider bringing in additional investors into the parent company?

“This question should be addressed to Scitex shareholders. What we’ve said is that management activities will focus on tracking down partners for our subsidiary divisions.”

Isn’t the digital printing market disappointing? It doesn’t quite seem to meet the expectations pinned on it.

“We’ve no cause to talk about disappointment. The market is developing, but it develops through niches, and our strategy was based on niches. Today there are half a million printing press throughout the world, and they’re not going to go digital overnight. Expectations have been premature.”

Your quarterly report reflect a growth rate of about one percentage point. Does the problem lie in sales, profitability, or the entire digital printing industry?

“Our challenge is to bring about growth in profitability. The bulk of activity today focuses on the introduction of a larger number of new products, such as work management systems, or plate-borne exposure systems, which yields bigger gross profit. When we look at the sales percentage of new products compared with the overall sales figure, we definitely see a significant rise in the ratio of new products. The company has a great technological depth, and we’re improving our ability to exhaust it.”

The Internet changes everything.

Scitex, too, is beginning to feel the sweeping impact of the Internet – at least to judge by reactions to the RenderView system Scitex is marketing together with RTimage. RTimage’s management is headquartered in California, but it development center is based here in Israel. Where else could it be based?

Development of the system, which was brought to market only this year, started in 1996. RenderView offers printing specialists and graphic artists – including advertisers, photographers, and anyone involved in high-quality printing jobs – full-resolution soft proofs, down to the smallest details. And it is all available via the Internet, by using only a PC and a modem.

RTimage has developed a technology that enables the use of servers working with the Internet to transmit graphic images down to the level of a single pixel. Called Pixels-On-Demand, the technology transmits only the specific data requested by the proof reader. For instance, it may transmit the entire image or only parts of it at the required blow-up degree. At the same time, the proof reader may mark points on the image that require special handling, or open windows for specific requests. One demonstration shows how the proof-reader identifies a human hair on the image of a skate roller due to imperfect scanning, and requests its removal through digital retouching.

This is how, at long last, Scitex has entered present mainstream technologies. No mean feat. It gets the company the right headlines, and gives it a special advantage in a market that’s becoming more competitive every day. The user of this technology is able to maintain a personal connection with customers. He is no longer the mere a supplier of machines or materials, but an indispensable ingredient in his customers’ routine activities.

Having badly burnt its fingers in its attempt to get into digital video, Scitex has got it right this time around. “The Internet Changes Everything”, is what RTimage has inscribed on its banner. The Internet certainly appears to be changing the printing world.

As Yoav Chelouche puts it, “Now we’re building the software and the community. Later on, we’ll present them with e-commerce tools.”

Published by Israel’s Business Arena July 18, 1999