Pivoting to medical: the CDMO shift that began with Graphic Controls (2016)

Choosing to swap the market itself

The core of this decision can be read as turning the danger of entrusting all earnings to a single market into a replacement of the earnings source itself. A company that had carried its technology from printing to decoration, and from decoration to touch sensors, this time carried the market across — into healthcare, which is far less shaken by the business cycle. In the way it converted the injury taken in smartphones into a motive for finding the next mainstream business, one can see the character of a company that has treated continual change as a virtue.

Growth built on repeated acquisition, however, comes back to back with the weight of goodwill. When interest rates move, carrying values must be reconsidered, and the cross-shareholdings being unwound to fund the purchases will one day run out. Whether the goal of earning half of group profit in healthcare can be reached while carrying that load depends on the quality of the acquisitions still to come and the skill with which they are integrated. Whether a printing company can put down deep roots as the unseen supplier behind medicine — that answer still looks open.