Profile: Pago Group

By John Penhallow | April 6, 2006

A Switzerland based industry leader has a global vocus on label systems.

Above: Fritz Beglinger, CEO of Pago;
company headquarters in Grabs, Switzerland
The name Pago might conjure up images of Pacific palm trees — Pago Pago is after all the capital of American Samoa — but in the label world the name belongs to the less exotic but more prosperous Swiss company making labels and labeling systems.

Pago Group has its headquarters in the Eastern part of Switzerland right on the borders with Austria and the Grand Duchy of Liechtenstein. Internationally, the group has subsidiaries in Germany, UK, France, Italy, Austria, Romania, and a joint venture in the United States. In total, Pago Group has around 1,370 employees and annual sales revenue of approximately €235 million ($280 million).

It has the — for Europe — distinction of being a leader both in pressure sensitive label converting and in the design, manufacture and marketing of labeling systems. In the area of label production, Pago's Swiss factory alone has more than 30 presses, and all production techniques from letterpress, screen, flexo, offset, and gravure are used. In labeling equipment Pago's main strength lies in its comprehensive range of label dispensers, print-and-apply systems and tailor-made linear and rotary labeling systems.

Pago AG was founded as a label mail order business way back in 1896 (Just to put that date in perspective, it was two years before Samoa became a US territory at the end of the Spanish-American war.), and remains a family-owned business controlled by two of the founder's grandsons.

Pago labels on Timotei products
Its first venture into labeling systems was in 1950, and it started its own self-adhesive label production a decade later. International expansion began only in 1978 with the founding of Pago Etikettiersysteme in neighboring Germany, which is now the biggest Pago subsidiary with more than 480 employees and production of around 20 million pressure sensitive labels per day. A partnership with Sancoa in 1988 was the group's first venture outside Europe. From its North American headquarters in Mount Laurel, NJ, Sancoa operates a label converting plant with 2005 sales of more than $75 million and 300 employees.

The 1990s saw Pago expand with new daughter companies in France, England, Italy, Austria, and Romania, and also a move to new headquarters buildings in Switzerland.

As an international concern with well established regional companies, the Pago Group is faced with the challenge of the requirements of both local and international customers. To this end, the Pago companies in each country aim to offer market-specific products designed to meet the particular requirements of the country they serve and, increasingly, to offer custom-built labeling machinery for individual customers. For international companies, universal systems and labels are developed for worldwide use, assuring uniform decoration and product marking on an international scale.

Staying with pressure-sensitive?

Pago's sales are 75 percent in label printing and converting, 25 percent in labeling systems, but (so far) nearly 100 percent in pressure sensitives. CEO Fritz Beglinger, a former president of label association FINAT, is well aware of the rapid growth of alternative label technologies like sleeves, wraparound labels and linerless pressure sensitive labels.

"Pressure sensitive labeling offers versatile options; that is its strength," he says. "And when you look at the total applied cost of a label, you will nearly always find that the pressure sensitive solution is one of the best. At Pago, we have looked at the development of linerless pressure sensitive labels, which have distinct possibilities at the moment, mainly in logistics operations. Pago has already entered into the production of sleeves and wraparound roll-fed labels. We are also making application machinery for sleeves and roll-fed labels, so as to offer our customer alternative solutions for product decoration."


Pago's 520 C pharmaceutical labeling machine

The later the better

The fashion industry discovered decades ago that with the public's tastes changing almost by the hour, it paid to make clothes in a neutral color and then dye them as far down the distribution channel as possible. The significance of this has not been lost on the label industry, and variable information printing has long been used to print batch numbers and sell-by dates onto preprinted labels. Pago has taken the process further with its "Late-Stage Customization" program.

"Labels introduce order and security into the flow of goods — from product marking via coding and identification to special markings and labeling, and from a single pack to commercial batches and transport units," says Beglinger. "Rules on declaration, multilingual texts and shorter product life cycles demand the utmost flexibility. The link between preprinted labels from the roll and the printing of variable data with a Pago label printer or automatic labeling units gives our customers an ideal cost-benefit ratio and the utmost flexibility."

This systems focus is clear in Pago's approach to pharmaceutical labeling, one of the group's specialities. Quality and security are the obvious prerequisites, but today this is not enough. Pago has developed a variety of special combination labels for pharmaceuticals, which are applied using improved thermal print and apply labeling systems, linked to an automatic leaflet feeder. Leaflet and label are combined on the application equipment.

Security is also ensured by another Pago "first": the use of 2D datamatrix codes to confirm that all components are correct, and with a sequential number such that each individual pack is unique, and can be traced.

Pago also provides pharmaceutical manufacturers and packers with a range of print and database software, whereby the label text is controlled by validated checks which cannot be altered in the packing cell. GMP quality systems audit print clarity, and report individual job and order compliance.

Small beer

If pharmaceutical labeling tends to be high tech, providing the same service to small breweries might seem to be a cottage industry. But for Pago UK, no customer is too small, particularly in a country like England, which takes its beer seriously.

Pagomat 15 E-i labeler (print and apply machine)
Wentworth Brewery has an output of around 200 barrels of beer per month, which is scarcely enough to make Budweiser tremble. Their beers, with such unlikely names as Woppa and Rampant Gryphon, are admired by connoisseurs and regularly win prizes for flavor. Pago UK was determined to make the labels as good as the beer.

Says Pago's Mike Cooper, "We used UV flexo and silkscreen inks on a polypropylene silver base. Each label was then enhanced by the use of PAGOtouch on the brand name. [PAGOtouch is a proprietary process whereby the label is given a relief structure.] These labels produce a unique embossed simulation effect at the point of sale, the design being tactile giving a 3D effect. It can be incorporated with multi-process print combinations and is an innovative and creative design solution. I am proud to report that these bottle labels have received the Label of the Year Award from The Labologists Society, which, in case you do not know, is the International Society for Label Collectors and Brewery Research."

Pago UK uses a program called Pago IQ to help its customers analyze total cost and performance. The essential ingredient here, according to Cooper, is to look not just at label costs, but at the total labeling process, taking account of run lengths, materials and all other relevant factors. To highlight this "total applied cost" approach, the Pago IQ Program includes a complete checklist for label end users.

Here today and here tomorrow

National stereotypes are often deceptive, but the Swiss reputation for solidity, caution (and secrecy) is probably well deserved. Pago as a company is not given to exaggerated claims or to tub-thumping advertising. CEO Fritz Beglinger himself embodies many of the virtues of both his company and his nation. Joining Pago straight out of university, where he studied economics, he has seen from the inside the many changes in this family business over the decades. Concerned with everyday business matters like cost-cutting and supply chain integration, he also finds time to look at wider issues.

As president of FINAT from 2003 to 2005, he carried forward the debate on whether the label association should extend its coverage beyond the world of pressure sensitive labels, and also how best to make FINAT attractive to smaller label converters. But his prime concern, for his company and for its industry, is not profits but people.

"We try to find young people who are genuinely interested in coming to work for us, and the same should be done by the whole European packaging and label industries. At Pago, we aim to ensure continuity by investing in the 'right' young people, people who are capable of innovation. We are not in a 'hire and fire' business. People are every company's most vital asset, and our aim at Pago is always to find them, train them and keep them."

Pago AG

Werdenstrasse 85, Postfach 145
CH-9472 Grabs, Switzerland
www.pago.com - www.pago.ch
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