Self-adhesive label use in Europe has now exceeded five billion square meters (53.8 billion square feet) a year as sales in 2006 soared overall by 7.7 percent, according to Jules Lejeune, managing director of FINAT, the European label association.
Over the last 10 years, the use of self-adhesive labels has grown by 86 percent — from just under three billion square meters in 1996 to last year’s 5.28 billion square meters, he told FINAT’s annual Congress in Berlin. It passed the three billion square meter mark in 1997, and topped four billion square meters in 2002.
The downside is that pressure on margins is keeping profitability low. “I have shown you positive growth figures, but we are in this business to make money; and profitability, after showing negative signs in recent years, is still very low. However, our survey does show that consumer and business confidence across Europe is upbeat,” he said.
Nevertheless, last year’s growth was achieved in each of the industry’s main areas — paper rolls, non-paper rolls, paper sheets, and non-paper sheets — although when examined across the five regions of Europe (Scandinavia, UK and Ireland, Central, Southern and Eastern Europe) growth patterns were erratic.
Lejeune pointed out that in the paper rolls market, Eastern Europe led the way with a 15 percent growth (from a low base), followed by Southern Europe (up 6.9 percent), Central Europe (up 6.7 percent), with Scandinavia only showing a four percent increase and the UK and Ireland barely changing with just a 0.3 percent improvement. Overall paper roll sales grew by 6.4 percent.
But in the non-paper rolls market — the fastest expanding sector — Scandinavia showed a 20.8 percent increase in demand and the UK and Ireland 6.4 percent. Southern Europe lagged behind with only a 5.8 percent improvement, but Central Europe (16.2 percent) and Eastern Europe (28.2 percent) had the largest expansion. Over the whole market non-paper rolls expanded by 13.2 percent.
Similarly in the paper sheet market, Scandinavia showed a 23.5 percent fall, prompting Lejeune to observe that in that area this medium is now almost extinct. The UK and Ireland receded by one percent and growth in Central and Southern Europe was only 2.5 percent and 2.8 percent respectively. Eastern Europe expanded by 17 percent. Growth of paper sheet based labels was six percent across Europe.
Non-paper sheet operations also showed a mixed pattern with demand receding in Southern Europe (minus 6.1 percent), the UK and Ireland (down 4.7 percent, only up by 1.9 percent in Scandinavia, by 14.9 percent in Eastern Europe and by 16 percent in Central Europe. Across Europe this averaged a 3.4 percent expansion.
The survey is based on information provided by eight major companies representing an estimated 85 percent share of Europe’s self-adhesive label industry materials consumption and operating in 27 countries.
Based on the results for the first quarter of 2007, FINAT anticipates a continuation of the growth trends of 2005 and 2006 into 2007, with overall business growing between 6 and 7 percent, and film rolls continuing to grow at more than twice the rate of paper rolls.