…which brings us to the question of Labelexpo Europe. Leaving aside all the hype, it is pretty certain that this year’s show will be a success, and that few, if any, of the major exhibitors will be missing when the show opens in September. Although it has grown steadily over the years, the Brussels Labelexpo is still a focused event, and the vast majority of the visitors are label converters. As for the location, it is rumored that Tarsus, who runs the Labelexpo events worldwide, has been looking around with a view to shifting the European event, by far the biggest label show worldwide, to another location. The Brussels Parc des Expositions was the last word in modernity when it was built in 1935, but times have moved on and there is no room to add new halls, hotels, parking lots and all the paraphernalia of more up-to-date venues. But Brussels has two aces in hand, which must have convinced the Tarsus management: firstly it is pretty much unbeatable for air, train and motorway connections, and secondly, businessmen are creatures of habit, and any change of venue unsettles them. The old adage “three moves equals one fire” is as true for trade shows as for offices.
Fifty years between mountains and lakes
Anyone looking for the perfect setting for a business trip could do worse than a visit to Lecco, at the foot of the Italian Dolomite Mountains. It is here, fifty years ago, that Omet started making machinery for the printing business. Much water has flowed through the Italian lakes since then, and today Omet is one of very few narrow web press makers who are also strong in mid-web printing and tissue converting sectors. Unlike some other label press manufacturers, Omet is seriously committed to the Chinese market, with a service and demo center in Suzhou. In 2011 it sold its “biggest press ever” to print tickets for a Chinese lottery, and in February of this year delivered a 12-color flexo label press to the Yanfeng Packing Co. Omet exhibited at Labelexpo India last November and at Upakovka Moscow in February of this year. The company was (of course) present at Labelexpo Americas, and just recently installed a 530mm (22") flexo label press for Etipress, Columbia’s leading PS label converter. Many press manufacturers are wary about crossing the divide between narrow and mid-web; Omet seems to bestride it like the Colossus of Rhodes.
Wine labeling (again!)
In any industrial or agricultural business, a label is no use without the right labeling equipment. Wines are no exception, and in France, which is still just the world’s leading producer, the battle between partisans of pressure sensitive and protagonists of glue-applied labels is slowly swinging towards PS as the technology of the future. When it comes to high-speed labeling, bottling and labeling equipment maker Krones, like Omet, spans the divide, and nowhere more than in the wine business. In the far-off days when every Frenchman at home or abroad had his liter of vin ordinaire with his dinner, wet labeling was king. To this day, most of the big wineries, and many cooperatives, use wet-labeling equipment for their long run, mass-market wines. But changing tastes, foreign competition and cirrhosis of the liver have all combined to change the French wine label market. As the consumption of wine has dropped, quality has increased, and tens of thousands of growers want their own label on their own wine. They have also belatedly woken up to the fact that most people, though they would never admit it, select a wine by looking at the label. When a bottling plant wants to run both types of labels it frequently turns to Krones, a $3 billion colossus based in Neutraubling, Germany, but present worldwide. Typical of France’s medium-sized wine growers is the family-owned Domaine du Tariquet in Gascony, South of the port of Bordeaux. Long before the word globalization was thought up, the Gascons (who were at that time ruled by the King of England) were exporting wine to slake the thirst of English nobles back at home. And although the King of France finally got his hands on this lucrative chunk of real estate around the year 1450, it was business as usual for the wine export business. It is even rumored that so much wine was exported from Southwest France that the ships made the return trip empty of cargo, with the result that the streets of Bordeaux were paved with English cobblestones which had been used as ballast. All this history does not weigh too heavily on the shoulders of Armin and Rémy Grassa, owner-managers of the Domaine du Tariquet. From their 900 hectares, they produce eight million bottles of wine, plus a little Armagnac. Along with much of the rest of their bottling equipment, Krones supplied the Domaine with a labeler incorporating two wet-glue stations and three pressure sensitive ones. According to Armin Grassa (as reported in Krones Magazine): “Pressure-sensitive labels offer additional scope for marketing, are much better in terms of presentational quality, and are gradually getting more affordable, too.”
Acquisitions are back in style
In last month’s Europe News we reported that an unknown buyer was about to announce a bid for digital press maker Xeikon. As of today no further announcement has been made but it is clear that private equity investors, many from outside the print or packaging sectors, are sharpening their knives, licking their lips and generally casting their lascivious gaze on anything that associates labels and profitability. In January, Tony Lennon, founder and CEO of Paragon Packaging in the UK, one of that country’s biggest label producers, sold out to Sun Capital Partners. Here in France we have seen Impika, which specializes in D-O-D web-fed inkjet presses, swallowed up by Xerox, and there are several yet-to-be-confirmed acquisitions of French label converters on the horizon: the Group controlled by Dominique Le Mée already owns four medium-sized French label converters and is rumored to be actively engaged in buying a fifth – and there will certainly be others soon. The acquisition of Spear by Constantia has already been widely commented in the press; this Vienna-based group is thrusting its way into the big league of label converters. Spear has sales of around $200 million, mostly in North America, Constantia Flexibles had total 2012 sales of $1.7 billion, of which labels (mostly wet-glue) accounted for $370 million or just over 20%. Commenting on the Constantia group’s performance in 2012, CEO Thomas Unger said: “With 7% sales growth, our labels business showed satisfactory development in 2012. In beer labels, the market approach as a ‘One Stop Shop’ of various decors from a single source is bearing fruit. New customers and projects in Africa and South America have contributed to the success. A decisive factor is the acknowledged and strong position of the Constantia Flexibles Group with the large breweries. The In-Mold-Labels business continues to grow dynamically and finds ever more users and applications… Technical features, such as barrier functions to increase the life period of food products, are gaining importance.” He also commented on the positive development of sales of pressure sensitive labels.
So next time somebody tells you that Vienna is just about operettas and waltzes (and Sachertorte) tell them about Constantia…a company which is definitely looking on the bright side.