By Editor Morten B. Reitoft 

Highcon was founded in 2009 by Aviv Ratzman and Michael Zimmer. Both had a background with HP Indigo and as the digital transformation took place in front of their eyes, an idea was born - or at least that is my guess! The fact is that Highcon (currently under maintenance), for the first time, was presented to the public at drupa 2012, and though I don't remember their drupa presence from 2012, I do clearly remember Highcon from the 2016 edition, where they had a fantastic stand next to Landa. At the booth, beautiful women were dressed up with paper dresses cut to precession with the Euclid laser cutter, and between the halls, you could see beautiful filigree hanging from the ceilings. An icon from Highcon was also a laser-cut Einstein face, a gigantic book where every page revealed the most beautiful examples of what laser cutting could do - a fantastic showcase of the technology!

drupa 2016

This was beyond COOL. The three women posed during drupa to show their dresses made out of paper. The book on the first photo is amazing, and so is the Einstein cut out - and, of course, the beautiful filigree in the halls of drupa. Highcon was flying - at least how it looked from the outside!

And in these unique samples was also the problem. Nobody questioned that Highcons technology was terrific, but few could maybe see the business model for these machines. The market for laser filigree was and is a limited market, and though Highcon at the time wowed the world with its technology, the vision from the beginning (as far as I know) was to be and become a supplier of industrial-grade laser-cutting for initially the folding carton market and later also for the corrugated market.

As the world moved towards digital, finishing had to move in the same direction, so using lasers to cut was a solution to go tool-less. As crazy as it can sound, firing precise lasers at paper and cardboard was possible without too many artifacts. We learned from Gaffs Kartong in Sweden that recycled fibers tended to brown edges more than virgin fiber. That has also changed, and Highcon controls the lasers, mirrors, and their machines so great - that even kiss-cuts today are possible.

As Highcon kept developing newer editions of their technology, the machines got faster and more reliable. Yet, one of the most important things to understand is that a conventional die-cutter keeps the speed regardless of the complexity of the design. The Highcon's speed depends on the design's complexity - yet simple designs can run at a reasonable speed.

Besides the lasers, Highcon also developed what's called a DART. Inside the machine is a 3D printer that prints a crease tool. In about 5-10 minutes, a DART has been printed on a foil inside the machine, and now the Highcons can cut and crease in one process - and regardless of the speed, it is pretty incredible to watch how the laser "dance" over the substrate, brush of the waste, and deliver boards ready to be used at the folder/gluers.

Highcon customers are happy customers. They have invested in Highcon for the same reason as many invest in Landa (I believe). They believe in a world becoming more and more digital. They see a need for faster turnaround. They see a world with shorter runs and where the niches that need more expensive, outstanding, and complex products (read more profitable) are increasing. I mention Landa because when I ask printers who have invested in Landa, although the machines are not as fast as initially promised, they all say they believe in the company. In the vision - and with Benny Landa as the single largest investor in Highcon - it is maybe good to have that belief?

Marek Laub & Morten B. Reitoft - photo from Thimm, Czech Republic

Recently, INKISH visited Thimm Packaging in the Czech Republic. Though it's a gigantic conventional converter, their Highcon Beam is now used in three shifts - and as expected, the Beam is used for short runs and very fine/unique products - some even impossible to do with analog technology, but we also learned that runs in the thousands are now used on the Beam, simply because the total time it takes to get tools, print, and cut takes longer time than printing digital sheets, and then cut these on the Beam.

Almost all Highcon customers also tell us that the trend for shorter runs and faster turnaround time is now. All Highcon customers have also told us that having the Highcon has given the companies more work. The work comes from other converters and entirely new segments that have never worked with these companies. For most, it is a profitable investment.

As much as the Highcon machines are great, you also realize that the technology is still not 100% mature, and some customers also mention that Highcon in the early versions didn't have industry-scale paper transport and that it sometimes caused issues. I am unsure whether this has been fixed; I can see, and we are also told, that Highcon frequently updates its software. The customers also say that Highcon support is super and very responsive, and some are even surprised that a software update can optimize their machine - almost like getting a new one.

Handling jobs that have been used in the analog world is easy. Adding or removing nicks is as easy and gives the user complete control over the finished product; remember, you can always make one copy to test it and change it until you are entirely satisfied with the finished result!

Aviv Ratzman and Michael Zimmer stopped with Highcon in 2020, and shortly after, in November 2020, Highcon went public on the Tel Aviv Stock Exchange. Despite generating losses close to 100 million USD for over ten years, the IPO was surprisingly good. The two majority of investors are Landa Ventures (Benny Landa) and Jerusalem Venture Partners (JVP) (Erel Margalit), with 43% of the shares. The IPO gave Highcon a market value of $190 million - and for perspective, the annual revenue in 2022 was a little less than $17 million, and for June 2022 and 2023 comparison, the numbers are respectively $9,264,000 vs. 3,352,000 - a dramatic decrease in revenue for Highcon.

Former GM of HP Indigo, Alon Bar-Shany, became, in January 2021, Chairman of the Board. Most people in the industry saw the IPO as a renewed confidence in Highcon and its technology - but an article from Israeli tech media CTECH on September 3rd, 2023, described how the money from the IPO and valuation of Highcon quickly decreased. The value of Highcon since its IPO has reduced by 94%, and the free cash to less than 6 million USD, which can only be described as a nightmare scenario for Highcon, and something has to be done - NOW!

I was even more surprised this morning, Sunday, October 15th, as Google Finance indicated that the share was traded with a volume of 987,000 vs. an average volume of about 300,000 - or days even in the two digits. When radical changes in trading patterns appear, it's often because of press releases, statements, financial reports, etc. Still, I couldn't find any reporting on any channel, so I wondered if rumors about some salvation plan for Highcon had begun.

My colleague Henrik Klem Lassen, CEO with a background as an investor, and I researched a bit further, and from the Tel Aviv Stock Exchange, the share's closing price was the same as on Google Finance. Still, there was no indication of unusual trading patterns. For publicly traded companies they are obligated by law to publish information that can influence the share price to all shareholders and the public simultaneously.

The Highcon Website has been under maintenance for some time - and way longer than acceptable for a publicly traded company, so it's challenging to get information, as no press releases have been issued for a while. However, on the Tel Aviv Stock Exchange website, we found the information that a postponed General Meeting takes place on Wednesday, October 18th, at 5 pm. We have asked for an agenda, but no response so far!

The financial situation for Highcon is undoubtedly critical, and the options as we see it are that existing shareholders invest considerably in Highcon and bring further fresh capital to the company. 

We don't think it will be easy to attract new investors on the current regime, so the other option is selling Highcon to a company with the resources to continue the R&D, service, sales, etc., for a fresh start!
A fresh start - a new company, valued rightly, with the right financial basis for ensuring the new - whatever - product they may have, and ensure a sales, marketing, and management that can do what the current haven't been able to.

Highcon has, according to its presentations, spent a lot of money on R&D, and I believe a breakthrough could be around the corner. In the current situation, I don't think they have enough money to finish the R&D and bring a new product or even products to the market - therefore, 'The Chicken or the Egg' headline. Nobody will invest in Highcon equipment with this uncertainty, and the only that can save Highcon is revenue - a growing revenue. A new investor could give customers faith in the future of Highcon and/or its Digital Finishing Technology and save millions of dollars in R&D, patents, current operations, customers, etc.

Remember, most of the revenue MUST come from sales of machines - it's not like an Indigo, where you have a constant recurring revenue for the lifetime of the Indigo. You must sell Highcons all the time!

But who could be interested?

Will Landa Ventures and JVP, as the significant investors, bring more money to the table? They are the only ones who know what's in the pipeline and should be interested in securing their current investment. On the other hand, I am uncertain about this - they may have the money, but they have not made the expected turnaround since Aviv Ratzman and Michael Zimmer left the company, so maybe a new ownership is needed?

Even before the IPO, Landa invested in Highcon, so maybe that source has been emptied?
Who else could be interested? It's not easy to point in specific directions. As an Israeli company, a guess could be other Israeli companies in the industry. But looking at Scodix, Landa, and HP as the biggest ones, I can't see any of them taking that step in that direction. I could see Highcon as part of one or two of the larger digitally-focused finishing OEMs, but the Israeli business culture is maybe just so much different that this wouldn't work - but who knows? :-)

These are exciting times, and Wednesday the 18th, I believe, will be a turning point for Highcon. Something has to happen; the longer it takes before the right actions are taken, the more difficult it will be. To my friends at Highcon - it must not be easy to see how things have developed in the past years - but you have great technology and will get there with the right effort and leadership!


Gafs Kartong - Lasse Svärd - Sweden
Autajon/Haubtmann - Xavier Boutevillain - France
Bennett Graphics - Adam Seiz - USA
Alon Bar-Shany - After HP - Israel
Fespa - Eitan Varon & Limor Elias - Israel
Virtual Packaging - Mike Ferrari, Matt Bennett & Monty Patterson - USA
Highcon - Aviv Ratzman - USA
Cartonnage du Château - Marc Royer - France
Highcon - Boris Bogdanovski - Canada

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