One of the lesser revelations at the FINAT Congress in Monaco in June was the difficulty, for the association’s secretariat, of translating this year’s theme – “the battle for shelf appeal” into French. The nation that has given the civilized world thousands of words for different foods, and tens of thousands for wine, has no convenient way of expressing the notion of shelf appeal. You have to use a whole phrase like “the attractiveness of products displayed on supermarket shelves.” This is strange because French super- and hypermarkets use plenty of flair and even séduction in presenting their products, but seem to have surprising gaps in vocabulary to describe what we in France are forced to call le marketing and le design.
Half-open doors and falling shadows
During one session of the Congress, FINAT invited representatives of four major brand owners to take part in a discussion forum. Some of the brand owners’ opinions were predictable: “We don’t care what print technology you use, we only care about the result,” or “Price and delivery count for everything.” Others were encouragingly new, as the statement by the manager from a leading French perfume company: “We welcome converters to work with our marketing people,” a statement that provoked a strange sound, something between a snort and a sigh, from the converter sitting next to your correspondent. As T.S. Eliot so succinctly put it, “Between the idea and the reality, between the motion and the act, falls the shadow.” More shadows gathered when the same forum discussed sustainability and recycling. Along with the usual lament (“Everyone wants to be green but no one wants to pay for it “) came the remark from the same French Perfume man, “We don’t separate out the used liner from our other waste, but it’s a good idea, maybe we should try it.” Moral: never assume that you’ve got your message across until you get the right feedback.
No need to push the recycling message to Germany’s Hagmaier Etiketten, winner of the newly created FINAT Recycling Award. There were five entrants, and Hagmaier won on the basis of its take-back service which has resulted in a high percentage of used liner being returned and shipped to UPM’s Plattling mill for recycling. This operation was mounted with cooperation from Cycle4Green, the Austrian recycling consultancy. FINAT also offered a prize for the best recycling initiative from a brand owner, and this went to Unilever, partly thanks to its zero-waste-to-landfill policy.
European pecking order
The industrial production index is not the only indicator which points to how a country’s label business is faring, but it does give a rough guide. The latest figures for European economies show some surprises. In Western Europe, Britain and the Netherlands lead the pack, with industrial production up three and two percent respectively. Moving eastward, we find Hungary with a rise of 10% and the Czech Republic with 8%. Poland and Turkey also score well in the 4-5% band (for comparison, US industrial production rose 4% in the year to March 2014, while China shot up by 9%).
Into the Stratus-sphere
Another unexpected acquisition was announced in France, where the Stratus Group, one of the country’s top ten label converters, has swallowed up the main site (and head office) of its competitor JPL. Both groups are privately owned, with JPL being a family-run business managed by Philippe and Frédérique Leyval, the sons of the founder. A second JPL plant, near Rouen in Northwestern France, was not part of the deal and remains with the Leyval family. This acquisition is the latest in a series which have steadily increased the concentration of the French label converting industry.
Finland’s loss is Austria’s gain
It is a sound rule of business always to take a small loss now rather than a catastrophic one later. Forty million dollars, however, is not chickenfeed, and this is the estimated loss to Finnish paper producer Stora Enso who suddenly last month announced the sale of its Uetersen specialty paper mill to Austria’s Brigl & Bergmeister (B&B). Stora said this divestment was in line with its “strategic transformation to a renewable materials company focusing on growth markets.” You can read that whichever way you like, but the result has been to more than double B&B’s capacity in label and flexible packaging papers to 440,000 tons/year. With its existing mills in Austria and Slovenia, plus this latest acquisition in Germany, B&B is now a force to be reckoned with in the global specialty paper market.
Austria is in some respects a kind of European Canada, occasionally taking part in peacekeeping and humanitarian missions, but otherwise modestly keeping out of the headlines. Its pulp and paper industry is admittedly small compared with that of Canada, though it does rather better on music. Vienna-based Constantia Flexibles however is growing fast and profitably, to judge by its latest financials. Sales hit $2.4 billion last year with profits up 28% to $332 million. Commenting on this meteoric rise, CEO Thomas Unger spoke of “a pleasing sales growth,” particularly in Constantia’s Eastern Europe and North American operations. He went on to say that the Labels business unit was Constantia Flexibles’ star performer in 2013, increasing sales by 45% to 410 million EUR. This puts the group very near the top of the league of Europe-based label converters. Constantia’s 2013 growth was fuelled largely by acquisitions, such as that of Spear and Grafo Regia. Activity in its label business was characterized by a strategic realignment and efficiency increases, the company said, adding that sales in 2013 were slowed by the cooler weather in important markets, which impacted sales in the soft drink and brewing industries. The weather in most of Europe has been hot and sunny these past few months, so watch out for some more pleasing sales figures from Constantia this year.
More horsepower for digital developments
Greeks have spent much of their history fighting other Greeks. When in 2010 the financial crisis threatened to engulf Greece, it looked for a while as if civil strife would wreck the Greek economy, possibly even bringing the Euro zone down with it. To general relief, this has not happened, at least not yet. The country’s GDP is still falling, but not so much (-1% in the year to march 2014), its industrial production likewise, and unemployment is an eye-watering 27% of the workforce. Despite all this, some Greek companies are surviving, and even starting to invest; one of them is label converter Forlabels. This label and flexible packaging converter specializes in the food and personal care markets, and saw its sales increase by 15% last year. General Manager Avgerinos Chatzichrysos needed a digital press to respond to customers’ demands for shorter runs and faster delivery, and opted for a Xeikon 3500. This choice he said was at least partly motivated by Xeikon’s new ICE toner, offering the capability to print on heat sensitive substrates like PE and direct thermal labels.
Last month’s Europe News speculated on what exactly Heidelberg and Gallus were up to. Since then has come the news that Heidelberg has acquired the 70% of Gallus it did not already own, followed by the announcement that the Swiss press manufacturer will in September of this year launch a hybrid digital/flexo press based on the existing ECS 340 model, and developed “as a cooperation with partners Heidelberger Druckmaschinen AG and the latter’s technology partner for inkjet printing, Fujifilm.” It is not clear where this leaves the Graphium, a digital label press being developed jointly by FFEI and Fujifilm.
Not a million miles from the historic city of Heidelberg in Germany is the city of Wesel, where the Altana chemical group has its headquarters. Altana makes pigments and adhesives, and has just announced that it has pitched in a cool $135 million for a minority holding in Landa Digital Printing. Even by German standards, Altana is considered a sober and cautious company, unlikely to fall for any exuberant sales pitch, so, keep watching this space. Oh, yes, and Altana is related to another well-known German brand: BMW.
That should put even more horsepower behind Benny Landa’s project.