First Gutenberg, Now Benny Landa?

Benzion "Benny" Landa has just become one of the richest men in Israel. His family trust holds more than 70% of the shares in a company that went public in May with a market valuation of $1 billion. It took 17 years to make his dream come true, and now Landa has taken his family on vacation in the wilderness of British Columbia, where his cellular phone is out of range of civilization. Time to relax. Yet there he is, at a roadside pay phone, talking with a reporter about his favorite topic: printing technology. Inks, plates, document feeders, image processors.

Landa, a 47-year-old who grew up in Alberta, Canada, may be a bit obsessive about printing, but look where it has gotten him. When Indigo of Rehovot, Israel, went public in the U.S. on May 25, it was the biggest-ever initial public offering of an Israeli company. Investors were wowed by a computer-controlled printing technology which Landa invented called "digital offset color."

READER'S CHOICE. The images that Indigo produces are not quite as good as those of a conventional offset press, but they're close enough to satisfy an emerging market for short-run, fast-turnaround printing of color brochures, catalogs, and documents. State Street Consultants, a Boston-based firm, estimates that there is a pent-up demand for $25 billion worth of short-run, high-quality color printing in the U.S. alone. To get an idea of how many machines that would represent, figure that each one might produce $1 million to $2 million worth of printed materials per year.

Landa has his sights set higher than the short-run market, however. With faster printing speeds, he believes, Indigo's technology will allow even large-circulation magazines to customize their printing economically, so each reader can receive a personalized set of articles and advertising. That would land Landa in nearly every segment of printing. "By the end of the decade," he predicts, "there will be personalized printing of newspapers and magazines. We will lead that. We expect to remain alone with digital offset color."

Hmm. Indigo, the Standard Oil of printing? Perhaps not. But even if you don't swallow Landa's prognostication whole, it's clear that Indigo is tapping an underserved market for customized color printing. With its time-consuming preparation of metal plates, conventional offset doesn't make sense for full-color runs of less than several thousand. And to date, color copiers and laser printers aren't sharp enough or fast enough. They do only a few pages a minute, vs. 30 for Indigo.

The key to Indigo's E-Print 1000 machine is its specially formulated ink. The ink becomes a plastic film when it hits the heated "blanket" cylinder (chart). The film then transfers cleanly to the paper, leaving the blanket ready for a fresh impression of ink. In other words, each successive page can be different from the one before--the ultimate in short-run custom printing. In a conventional offset press with ordinary inks, resetting plates and cleaning blankets for new pages can take up to an hour.

"HAPPY AS HELL." Early customers are enthusiastic. Take Anthony Cannata Sr., president of A.C. Color Lab Inc. in Cleveland. Cannata says that since he installed two Indigo E-Print 1000 machines on May 15, job orders have poured in from beyond his traditional metro Cleveland service area--from Connecticut, Michigan, and Washington State. A publisher recently ordered 10 copies of a 32-page mock-up of a magazine. Cannata says he got the Macintosh computer file at 10 a.m. and had the copies done by 2 p.m. Although the two machines cost him $842,000, he says they're already earning their monthly payments. "I'm happy as hell," he says.

Indigo's product may be hot, with shipments to date of more than 45 machines. Whether the company merits a market value of $1 billion is another matter. Investors are having qualms. The 5 million-share IPO was oversubscribed, with orders placed for 20 million shares. That's usually a sign that the stock will jump after the opening. Instead, it has dropped from 20 to around 14, lowering the market value to about $700 million. One concern of shareholders is that superinvestor George Soros, who injected $50 million into the company while it was still private, is entitled to receive additional shares if the market value doesn't reach $1.768 billion by the end of 1996. Landa says the provision is irrelevant because "it's a sure bet" that Indigo's market value will clear the hurdle.

That sure bet may not take adequate account of the competition. Indigo has a stockade of 130 U.S. patents, but it isn't the only company going after short-run, high-quality color printing. Some, such as Xerox, Canon, Eastman Kodak, and Belgium's Xeikon, are working on xerography--using the dry toners found in conventional copiers and laser printers. Others, led by Germany's Heidelberg, are speeding up printing-press technology, mainly by automating preparation of inked plates.

ON A ROLL. Indigo's closest competitor may be Xeikon's DCP-1 digital press. It runs faster because it's fed by a roll instead of separate sheets and can print on both sides at once. Indigo claims that its liquid ink gives better resolution than Xeikon's powdered toner, but some printers say the quality is comparable.

Over the long term, look out for the big copier companies. In April, Xerox Corp. showed prints from an experimental printing "engine" that it said were difficult to distinguish, even under a microscope, from offset documents. The company also showed an engineering model of a production-speed printer.

Xerox declines to say when it might reach market.

Analyst David S. Nelson of Lehman Brothers Inc. says serious competition to Indigo is several years away. Nelson, who is recommending Indigo shares, sees the company's sales rising from $31 million in 1993, when shipments began, to $82 million this year and $238 million in 1995. On the other hand, Nelson may not be entirely impartial: His firm was the lead underwriter on the Indigo IPO. Lehman spokesman Steven H. Faigen says the firm's analysts make their forecasts independently.

Whether or not Landa can live up to his underwriters' expectations, he has galvanized a printing industry that isn't known for rapid change. "To me," he says, "the satisfaction isn't the money. Creating an upheaval in a major industry is what I get my thrill from." By that standard, he is already a success.

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