Interview with John Mills: Inspiring Xaar
At the FuturePrint Virtual Summit in October, Xaar launched ImagineX a new printhead platform designed to bring inkjet into a new age and allied to a rebranding has reignited the business back to where many believe it should be, innovating from the front and defining the future. We spoke directly with CEO, John Mills, about how and what the future means for Xaar.
John, what did you have to contend with when joining Xaar?
Initially, it was pretty clear we all had to accept and recognise that Xaar was in a place of difficulty and that it had made some mistakes in the past. I think people appreciate thathonesty. In the meantime, we have done a lot of soul searching and looking at our core business and we had to make some difficult decisions. This is tough but it can happen in the life of a business.
How have you dealt with this?
We all went back to basics. We spent time visiting our customers and we asked OEMs what they thought of Xaar. I received a lot of feedback about issues which we listened toand the changes that we have made in the business is a direct result of what we heard from the OEMs. However we were pleasantly surprised that despite significant frustrations there was still a genuine affection for Xaar as many of them hadbuilt their business with Xaar heads. The frustrations they felt over recent years meant that they chose not to use Xaar printheads but after listening to their concerns and changing the way we go to market along with talking to them about the new product roadmap we were able to re-engage and I am pleased to say that we are now again working with many of them.
How had the previous few years affected the people at Xaar?
When you come in as CEO into a new business, you have the advantage of having a blank sheet of paper and you have an opportunity to really spend time on listening to what is good,what is not, and you get the unique chance to take stock and begin addressing the future without having any baggage from the past.
The reality is that Xaar had a 5-year decline and internally we had lost confidence in our core technology, partly because of the focus on thin film and partly because of the decline in sales.
When I joined Xaar, I spent an hour each with approximately 60 people in the first couple of months and I asked them a couple of questions. Question one was ‘sell me a Xaar product’ and question two was ‘how many customers have you visited in the last year?’. It was clear from the responses that we had lost the understanding of our core value proposition and that we had lost contact with our customers. The restructure of the company and refocus on our core technology had to start with rebuilding confidence in our products internally, and I am pleased to say that the belief we now have in our product range is starting to translate into confidence from our customers.
What about the products?
We had a focus on thin-film inkjet head development and consequently invested a huge amount of money in this. It is a mammoth undertaking and if you do not fully commit to it you will probably fail. The thin film Xaar developed was successful. It was a great achievement, but this focus came at a significant price which was not sustainable for a company the size of Xaar. And in addition, there is a question mark over thin film products generally in my view.
Why is there a question mark over thin film?
I describe thin-film technology as the formula 1 car of inkjet. If you want to go around a track really really quickly then there is no better car – but it is finely tuned, requires huge investment, you need to look after it and you will need to know what you are doing. If you get it right, it works beautifully.
Xaar’s core technology, bulk piezo is more your Volvo Estate, it is not as fast, but it is fit for purpose, more general, robust and easier to apply across a wide range of terrain and conditions. So, if you have a look at the applications today, we are seeing a lot of interest in the need to jet challenging fluidswhere robustness and utility is more important than speed.
Stepping away from this high investment technology makes sense for Xaar as particularly when there is such a significant opportunity with bulk piezo which is our core market. We are finding we are receiving a lot of enquiries from companies in markets wanting inkjet heads for high viscosity fluids and jetting these kinds of fluids is not possible with thin film. As a result we have won over 30 new accounts in the past year which fall into this category.
What sectors are relevant to Xaar?
Jetting high viscosity is not really possible for thin film and this limits the applications that you can use.
Typically, you would expect that thin film has an upper limit of about 10-12 CP – we have heads which can operate at 100 CP and to my knowledge this is unique. Customers are now approaching us with fluids they want to jet which do not work with any other head in the market. In industrial applicationsthe fluid has to do more than just be decorative. If you think of wide format graphics, as long as the print sticks to a few different substrates and is UV curable you do not need to worry about migration, smell, rub resistance, chemical resistance, conductivity etc. So, when you enter industrial with these challenging fluids and need for greater flexibility and demanding standards you need your Volvo Estate, not your Formula 1 car. The application trends that we see are seeing are moving towards more challenging fluids.
What is your view of packaging which is very appealing for inkjet?
There has been a big investment from a number of inkjet brands in packaging. It is difficult to see if they have been successful, but to date none of them have changed the face of printing in those sectors.
Of course, many people think that thin film has a place in packaging applications as the speed of production and high-quality resolution is highly important here. However, I don’t see this working well as the ink cost is always going to be 5-10 times the cost of the analogue ink! Plus introducing a digital component into packaging is so disruptive and therefore nigh on impossible to achieve.
Why is this?
One of the big issues is automation and fulfilment. During my prior tenure at Inca Digital, I visited over 400 different wide format businesses and each one of their set ups was virtually the same. What I was struck by was that one of the biggest and most important productions areas was not the printing but the fulfilment. Each had an army of people cutting, folding, gluing and packing and despatching and then it is sent to the store. The digital printing work drives the level of fulfilment. This is fine for graphics perhaps but for packaging it is hugely complex and hugely disruptive.
While unique and short runs jobs can be done with digital print, making unique jobs within a larger packaging process adds a huge amount of difficulty into packaging that it may slow things down as opposed to speeding things up!
So, if you introduced a digital printing machine into a packaging line, even if the reliability was the same and the ink price the same the fulfilment process would not work because there is not a system that exists that would cope with it.
Doubling the speed of digital printing just doubles the requirement for fulfilment and packing. Packaging has a long way to go before it is ready to accept inkjet to any great degree. Thin film speed, resolution and water-based is absolutely fine for packaging, but the ink is way too expensive.
It is important to find the right business model and the rational for investment and understand how each industry makes money. Just replacing the analogue machine may not make sense.
As a result, I still think there is a place for smaller more flexible printers that are able to take off the short run work from the analogue machines. This is why scanning machines still have a massive part to play in production.
This is why we have gone back to focus on bulk piezo as it solves the problem that exists today.
How has your TF experience benefited ImagineX?
ImagineX is our new portfolio of IP that will power the next generation of Xaar products. This fresh IP comes from 3 sources. Firstly, from work the team has done on bulk technology over the previous 10 years, that we have not commercialised due to the focus on thin film. Secondly, IP that we have acquired from third parties over the past 12 months. Thirdly, from the £70m investment that we made in thin film. The latter forms a significant portfolio of IP that will enable Xaar bulk technology to operate at significantly higher print speeds, resolutions and the ability to print all fluids including aqueous. Initially the external view was that this investment in thin film had been wasted when we had to cancel the program, however in reality, it has given us an incredible platform to improve our core technology.
How do you see 2021 panning out after the COVID-19 challenges we have all faced in 2020?
I am a huge optimist and believer in the human spirit, andconsequently with the roll out of the vaccines globally I look forward to seeing a strong recovery in H2. So far our employees have responded incredibly well to the challenges of covid and their flexibility and hard work have enabled us to drive the business forward during incredibly difficult times.
The stock market has responded well to ImagineX and it will be interesting to see how this develops over the coming year?
As we have changed the business model, created a clear product roadmap and defined a long term growth strategy for Xaar we are now seeing that our employees and customers are starting to believe in the value proposition of Xaar and this is a reflection in shareholder confidence which drives the share price. We need to continue to do the right things, grow the business and continue to give shareholders reasons to invest in Xaar.
Xaar remains the leading independent manufacturer of inkjet heads in the world and as we build on the success of 2020, I see a great future for the business, and I am excited about the future.
Check out John’s next talk ‘Collaboration is the new Innovation’ at the FuturePrint Leaders Summit here.