As with so many companies, Grafisk Maskinfabrik or GM started 40 years ago in the current Director Uffe Nielsens parents’ kitchen. Today GM is a recognized supplier of roll-based finishing equipment for digital and flexo labels, both under their own brand and an OEM supplier. Recently GM has moved to a new headquarter where the company now enjoys both a larger showroom and new and modern facilities with space for growth. In this Conversations, Director Uffe Nielsen talk to Editor Morten Reitoft about the history, the current situation, and the future.
Great story – so please enjoy.
Uffe Nielsen, CEO, GM, thank you very much for taking the time to see us here today. You recently moved to this new facility. Who are you and what do you do?
That’s correct. Actually, we are on an interesting journey. We are moving from a workshop to a real factory. So before we had three small factories and we couldn’t keep up, there was just too much demand. So we needed something bigger. And now finally, we are here in a 9000 square meter big facility. We have made the journey from small workshop to factory. And it’s really… We are enjoying it here. We just need to get it completely finished. As you have seen, we are building a new demo room and I look forward to inviting you to that.
We would be pleased to come. And talking about your company, you are the second generation. So how did this start?
It’s the good old story. It was started by my father on the kitchen table doing electronics for other companies. And then we grew over the years. For many years, we had a certain size. And then we decided to start the adventure with digital print and making machines around digital print. And that was a good decision. Because that market really took speed and we have grown tremendously as digital has grown, GM has grown as well.
One of the things I can’t help thinking about is that when we met each other a couple of hours ago, you said to me that in the past and with your old factories, you and your salespeople were able to fill up the production. And now you have started a change in your company and you have been smiling since I met you the first time. And I think even in the pandemic. It has been really good times for you, hasn’t it?
I would say so. We have been very fortunate. It’s a combination of factors. It’s a combination that the label industry in general had good times during the pandemic because of the general demand for labels. But also we have been before in a situation where we could sell everything that we could make. Now we have a big factory and very soon this operation will be the opposite. I hope that our factory will be able to be as fast as the sales. So it will be a big transformation for us to have the production capacity that we have needed so badly for the for the past decade, actually.
But I take that your success is not based on the size of the factory. But based on that you do very, very innovative and brilliant products, right?
Of course, best in the world. I would say that we have been lucky that we tapped into the change of analog technology to digital. And we were able to make three areas… Three areas of our products. We have a scientific division where we make products for solar cells manufacturing. So roll to roll, solar cells manufacturing. We have…
Yeah, that’s a really research and it’s working with scientists and it’s really interesting. It’s also long sales processes. It takes a year to sell a complicated research machine. Then we have our OEM production. Our brand is not that known, but actually around half of our production is OEM to many of the major brands in the industry. And then finally, we have our own brand, GM, that started out with smaller machines and now we make sophisticated laser die cutters and fully automated production lines. So it’s been quite a journey and our capability to adapt and also customize our machines – I think that’s one of the things that gives us an edge in the market, that you cannot only get a standard machine. But you can actually get a machine that fits your niche specifically designed for you.
I would like, of course, to learn more about your products Uffe. But before we’re going to talk about that, I want to understand a little bit, because you told me – just on the factory floor, just before that – that you were actually second generation of GM, right?
The company has been going on for four decades. It’s a family driven company. And we have the whole traditional story about my father starting out at the kitchen table making electronics for other companies. And then we have grown over the years. But for many years we stayed at around 50 people. But then here in the past three or four years, it really took off. And as the digital adventure especially in labels accelerated, so did we. And we made all the surrounding machines for digital production. At the same time, we had this scientific track that came actually to us by chance. We were approached by a Danish university who were complaining that scientific machines cost… They had actually a good joke. They said the scientific machines cost one million euro per square meter machine. And when I heard that, I was like: Oh, no, we can definitely do better. And we then started to adapt some of our machines and we made some more economical models that could actually work in cleanroom environments and work for solar cell production. And that’s like I call it, if we were a car factory… The Formula One team, that’s the one who makes the solar cells. And then we have the middle team. That’s the one who do the label lines. But we are learning, the middle team is learning from the Formula One team. So there are similarities in control and automation that we can learn from the Formula One team. So I think it’s it’s been great for the factory. And it’s been great also for our research department that we have these different levels.
I can’t help thinking about that when you have these three areas that you’re working in. I mean, it must also be good because sometimes in the graphical industry we have our ups and downs. So you’re spreading a little bit the risk. And also in your R&D, you can basically develop things that can be utilized also in the other two areas, right?
That’s correct. We have two big advantages. First of all, we have been in the business for 40 years. So we have more than six thousand machines in the field. So we have a very good service business providing. We are known for being able to provide spare parts for machines that were built 30 years ago. It’s quite unique. But apart from that, having multiple legs to stand on, is always an advantage. Big research lines, they are not affected by a Corona pandemic. This is something that’s planned, typically funded by EU or other funds, and it’s planned for years. So we’re having these three legs to stand on. It makes the company very robust in terms of economic fluctuations.
We’re not prepared for this interview. One of the surprises I had… Was actually because I have known GM for many years, but I have not really digged so much into your products. If you just look from your website, you have a lot of different products and you can serve a lot of different parts of the value creation in the printing industry. So let’s talk a little bit about the product. What is your core business? Where are you? Where do you think you’re heading in direction of your products?
We are heading towards automation and more sophisticated lines. For example, let’s take the laser die cutters. There is a handful of competitors worldwide who has the in-house know-how to make both the software in a laser die cutter but also to understand the complicated optics and things around the laser die cutter. So we have a very big span. We can make a small chamber rewinder and we can make a laser die cutter. It is a big span. But it’s also what makes it fun here. And I like to have a place that attracts young talents. And having the full range means that we can start young engineers out on simpler machines and then they can learn into the more complex machines. And so it’s another thing that’s important. It’s not only important to build great innovating machines, but it’s also very important for me to have a great place to work. That’s a part of our philosophy.
One thing is a great place to work. And also, you say the internal educational process that you just described. I can’t help thinking about the complexity of the range of products you deliver. I take that it’s also because the your customers are demanding more and complex solutions, right?
That’s correct. There are… I say no quite a few times when the phone rings and people they want to have a very custom line. I have to think now about the capacity. In the good old days, we would just jump in it and say: Yes, it’s exciting, let’s make this.
But now we have to also think that we have a big factory here and the number one is dangerous in production. Ten is a much better number. But it’s also what makes it fun. There needs to be some diversity. We need to be innovative all the time. And one of the things I enjoy great about this business is that many of our clients are actually a little bit of an engineer themself. So when you visit people in the graphical industry, typically they will take you to a corner of their production and with pride show the little modification that they did. That can make that unique label. And that’s what… That is what keeps me smiling. And it’s what’s interesting about this world.
So you have moved part of your R&D to your customer size basically?
You could say that. Some of our clients, they are really at the edge. Others, they just like the green button machine where you press and it operates. But we have the full range. Let’s take the university guys, for example. We can deliver a machine. Then we come back two years later and we say: Did we build this? And they rebuilt the whole thing. So it’s different clients. Different mindset.
If you look at the four decades of history and you have become way bigger in that period of time and your diversity in products… And also I guess the services that you build around the products… Does that leave space for new competitors in your field, you think?
I think there’s always room for new innovative guys in this business. But it’s becoming more difficult because this market is not very… It is not that big, but there is a high degree of knowledge.
So the entry into the market requires a lot of know-how. We have the four decades of know-how. But on the other hand, the market is not big enough. So we would have some of the huge players go into the market and say: Now we want to make finishing. It’s just not big enough to have that. But some of our markets like plastic solar cells. If you look at the political and the economical potential of that. It’s a huge, huge market. We are part of the first steps learning to go from laboratory to production and we can serve that market. We do realize that if it becomes a global hit, you need a whole different production. Then you need a BMW factory basically to be able to follow up. But we are always in the innovative part of a project. If it becomes unit in the thousands. It’s not us. The high runners here – we do is two or three hundred units.
That’s where we have the edge, not in the thousands.
But I that if you look at the history of your company and innovations you do here, I think that is what keeps you competitive. Is basically that you follow the market in-depth and close. And you develop products and services. One of the things that I think a lot of people in all of the segments of the graphical industry are talking about right now is also the Industry 4.0. Is that something that you also consider in your future plans of…? I mean, obviously you have to. But how do you see that as part of your journey?
It’s already there. So all new designs, they are Industry 4.0 enabled. But it’s again, it’s a journey. The first step of the journey is to get the hardware in place and the software in place. The second step of the journey is all the benefits you get, like maintenance, the machines being able to report back. Now I need this and this spare part. And also ‘sharing’, for example, Industry 4.0 would allow different plants using the same machines to actually kind of battle against each other. Because you would be able to see how productive are the different operators and how is their product mix? So it’s kind of what happened for human beings with Facebook. They took all the information. And what are we going to do with this? Maybe we can make some money on it. Industry 4.0 has some of these things because it allows you to monitor everything and then you need to decide how that works in your factory. But for a printing plant, it’s primarily in service and automation. That is really where you have the big capital players that that will benefit you and make you more profitable.
And when you talk about the competitiveness among the workers operating machines, I take that it also brings some competitiveness to the equipment manufacturers. Because now you can easily measure the productivity of also competitors and compare them easily. Right? So I take that your engineers have pushed a little bit further than they did maybe 10 years ago.
Yes. And also the level of skill, because just putting in the hardware enabling Industry 4.0, that’s actually the easy part. It’s changing the engineering approach toward software. I think we will find it in multiple industries – that before you start out being good at making mechanics, then you learn that if you can do some automation with clever electronics, you’re performing better. But now it’s shifting. If you can do the right software, then you are a leader of the pack. So it’s kind of this natural evolution of machinery that’s now becoming very heavy on software, cloud connectivity and the obvious things you can do in service with Industry 4.0.
We spoke about – just in the beginning – we spoke a little bit about the market that Covid 19 and the pandemic has not been too bad to companies like GM. If we just dismiss everything about the pandemic and just say business as normal. How does business as normal look from your perspective?
It’s looking very good. I would say I can’t complain. We have been very fortunate. Both because we have so many different products, it’s kind of a curse and also a saving. You could say we need to manage 30, 40 different products. But the chance that all of them would suffer from some kind of external factor, being it the Corona pandemic, or economical fluctuations or technical changes or somebody decided we will never use labels anymore. We will print directly on the product. God forbid. But but it will probably happen.
But we are very robust due to the wide range of products. We have also made like parts of the security components inside passports. We have made the ferry tickets for ferry terminals. We have made stamps and solar cells and labels, security holograms. So it’s a wide range of products that we do.
If you look at – I mean – apparently and evidently I can see that you are in a good position. And congratulations on that. Because I think there is a combination of good skills with your people and good management and also ability to see maybe not the long distance future, but at least the future that you can influence right now. How important is it for you to be in these relationships that you have? Because you have direct customers under the GM brand. And you have OEMs under the other brands? How important are those relationships? And how important is it for you to have that? I think you have a very good recognition in the market. Obviously, that is good. But I was just thinking that how much is that? Is that something that you speculate on and work actively? Or is it just happening because of who you are?
I think relationships is key both from the local print shop – I enjoy visiting local print shops that are only five people. Speak to the operator and look at a simple rewind of what’s working and not. To go to a research center in France looking at a complex solar line, speaking to a scientist about things that are way beyond my level in terms of the chemistry inside a solar cell. I enjoy the full range and it’s part of what makes it fun to go to work.
But I was thinking that, you know, sometimes you think about entry level products and then you think about products produced out of a country with the expenses as Denmark. They need to be top of the line kind of. I take that you are in the upper range of quality and that recognition, it must have taken some time to get there?
I think it has taken a lot of hard work in Scandinavia. Here we can primarily compete on quality and effectiveness of the machines. And I think that will not change. We are seeing some competitors from China, very talented people making good machines. But still there is a difference in terms of: what is good enough? And that is a discussion that we have I think once a week in our development department. That we need to find that level from price versus quality. And right now we’re pretty good at it. I hope we will keep being good at it. But that’s, of course, what defines success. Is if you can make the right product at the right price. And that’s what we were trying to do here every day.
You have several times in this interview talked about your ability to deliver digital solutions. And obviously I think that most converters and PSPs are looking into a more digital future, of course. From a manufacturing perspective – when you do your machines – how how big of a difference is it from an analog equipment to digital equipment in finishing perspective?
It’s a huge difference. Let me make a simple example. Years back, I took a business trip to Italy. I visited multiple traditional printers to learn how to do hot stamping and foiling. Directly from the source. They make beautiful wine labels. I wanted to learn how it’s done so we could…
Before or after the wine was emptied?
After the wine. No. I would say before. But we learned about that. And then let’s say 15 years ago, we then made a more modern version of the traditional hot stamping and foiling equipment using several drives, foil savors and controllable dwell times. All of these things that can make it more efficient. And we were outperforming the more conventional machines. Now we are looking at embellishment being made with digital heads. So inkjet and of course, that’s affecting our business because we have a big line of traditional equipment that works in a mechanical way. Even though it’s clever controlled, it’s still mechanical. And now we see that that is being transformed. And inkjet technology, print on demand, no tooling. But we are still involved. You still need to dry the ink. You need to control the web tension control. But some of the control we have to let go because we are not the manufacturer of the inkjet heads.
And that was why I was asking. Because I was thinking that you show some of the frames in your factory. And before you said that here is a challenge. Because you need to have the tension of the paper and and the printing device that you put into this machine doesn’t necessarily think of it as, you know, roll-fed and all these things. And I take that these kind of innovations must be challenging because, as you say, if you don’t control the printing unit and you don’t control the embellishment and the foiling units. That you depend on a lot of different people’s innovations in order to integrate them, right?
That’s correct. And also, we learn, for example, let’s take inkjet. Everybody can mount an inkjet head. But when you mount four of them, or five of them together and run for a long time, that thing gets hot. And then it expands. And we are talking tolerances in the hundreds of a millimeter. And suddenly you have a problem. You have an old fashioned classical thermal expansion problem with your brand new digital inkjet head. So I would say the challenges are still there. They are just different. Also, we see that there are not many trained printers anymore. Before we could rely on having an operator that had a classical training and understood viscosity inks, web tension, he was trained. Today we find ourselves with the not trained operators that are pulled in from the street. They get a two week training and then here you are: run this press. And that’s a challenge as a machine builder. Because we cannot rely on the operator being as skilled as he used to be. So we need to counter this with more automation, more reliability, also better safety systems, because a trained printer knows it’s not so clever to put your hand there. But somebody you take from the street, he will put his hand everywhere. So it’s at multiple levels. This is changing the how we make machines.
These kind of demands that you just talked about right now. From, for example, being inexperienced or uneducated in operating the machines to also the security issues. That actually also drives that you can get even more people involved in the printing industry that has less education. Right? So that was also sometimes a little bit of a challenge because, you know, we’re also talking about Industry 4.0. I think we had a session with some American label printers two weeks ago, and they also already now started to have lights out production also when it comes to labels. So, I mean, that is also something that you often obviously need to take into consideration. Not only having less educated operators, but also zero interaction with any human beings, basically.
That’s correct. Everybody dreams of the machine where you put a roll on and out in the end. At the end of the machine finished labels are coming out. We’re not there yet. But every year we’re getting one step closer to do this. We have seeded, for example, in the presses for the color calibration. We don’t see that much manual calibration and much is done now with a camera that scans and feedback. Also the security, we do far more inspection lines. The intelligence in the cameras is just over the past years… It’s amazing to see what that sector has been able to achieve in terms of speed. If, for example, a label is running at two hundred meters per minute, the camera will see every single label and detect it. From a technical point of view, that’s amazing. Because you need a really fast brain to see all these images.
As we spoke about it. Sometimes it is so fast that you don’t even see it. Right?
It’s just the computer can see it, but you can’t see.
So Uffe, everything you said is just amazing. And again, I think it’s great to hear that you’re so successful. And which is nice and great and everything like that. In a competitive world – how is the competitive situation? Do you feel comfortable there as well? I mean, you spoke about the Chinese things. But if you if you talk about, let’s say, vendors that work on a an even level that when you look at them you say: Oh, that was that was almost GM level. Do you see those as well?
I think I would never feel completely safe. If you start feeling completely safe, I think you will be out of business. But the the main problem here in Denmark is that we are, I think apart from Norway, probably the highest salaries in the world. So we always have to be a little bit smarter. Because if our machine takes too long to assemble, we have a disadvantage that we cannot… It’s not competitive. So we try on all levels to be that step ahead. So we have a business tomorrow. And the past four decades we have we have been that. And our business keeps growing.
So I think we are doing something right here. Because it keeps growing for us.
Perfect. Thank you very much.
Thank you for having me.