Narrow Web Profile: Labelgraphics

By Katy Wight | April 26, 2007

Scottish entrepreneur Alex Mulvenny has built one of the most enviable label converting operations in the UK over the last 24 years. He plans to hand the baton to his sons this year, but will still have a role in helping make major strategic decisions.

There's an old Scottish proverb that says, "Fools look to tomorrow. Wise men use tonight." Alex Mulvenny, chairman of Labelgraphics Ltd. of Glasgow in Scotland has certainly taken heed of this advice throughout his career. After founding the company 24 years ago, Alex has taken risks, seized opportunities and paved the way for Labelgraphics to become one of the most prominent and successful label converters in the UK. Following 53 years in the print industry, he is heading for part-time employment this summer and is handing the business down to his two sons, Managing Director Alex D. Mulvenny and Operations Director Peter Mulvenny. The sons display the same driving ambition as their father, and the company is sure to be in two sets of very capable hands.

Alex Mulvenny
Labelgraphics today has 96 employees running a 24-hour operation that has seen formidable growth from £5 million to £8 million ($15.9 million US) over the past three years. An all-Gallus shop, the company has a focus on short lead times and the utmost quality. With a legacy in converting labels for the demanding Scotch whisky market, the company has continued to target the high-end beverage market with wine, beer and spirit labels. Despite Alex's semi-retirement plans, he will continue to consult on the future of the company, and the current strategy includes a move to a purpose built facility, and establishing partnerships with key converting operations abroad. It's no ordinary retirement.

Alex began his career in a print apprenticeship and then returned to college full time to study printing. After graduating, he became the production manager for Avery Label in Glasgow and stayed with the company for seven years.

"Avery Label was like a university for print managers," says Alex. "I had the opportunity to meet Stan Avery, and the kind of people that he had around him were very influential in my life. After seven years with the company I thought that I could do the job myself and helped start a company called Ayrshire Labels with two partners. I was told that we were starting the business at the worst possible time."

The business climate in the UK in 1973-74 was certainly not ideal for launching a new manufacturing operation. An energy crisis had forced the government to limit the commercial consumption of electricity to three consecutive days per week. Cutting capacity by two days was disastrous for many companies, but not all.

One of six Gallus EM280KS presses at Labelgraphics
"The three-day week was marvelous for us," Alex explains. "The competition was struggling to meet delivery dates and their lead times were slipping from four to eight weeks. We were just starting out and were looking for customers, so we took full advantage of that by delivering in days rather than weeks."

After seven years as managing director at Ayrshire Labels, Alex sought other challenges further afield, and headed halfway around the world to Australia to learn more about labels.

"Going to Australia was a tremendous stepping stone for me," he says. "I believe that they are the best label printers in the world. They are extremely innovative because they are so far removed from anyone else in the industry — Japan is the nearest country and that is 7,000 miles away. Sometimes the Australians will do things with presses that the suppliers don't even know are possible."

After a period of time working as a production manager in Australia, Alex returned to Scotland and took a six-month business management course. He recruited two investors and opened the doors to Labelgraphics the week after his business start-up course had finished. And he has never looked back. The Labelgraphics plant is located where 86 acres of Singer sewing machine factory, employing 16,000 people, once stood. In the 1970s, Singer pulled out of the area and the estate was made an enterprise zone to encourage new companies to move in. Labelgraphics arrived in 1982 and received assistance from the government in the form of grants to employ people, buy machinery and also access to business advisors with a range of strengths. Labelgraphics started out with a Japanese Shiki press and a second-hand Nilpeter Dominator, and eventually expanded capacity with four Shiki presses.

Mounting a flexo plate
"Lead times were drifting out again when we started Labelgraphics," says Alex, "but we could deliver next day. I've always looked to take advantage of these kinds of situations; after all, your worst day could be my best. We got our business from anyone and everyone, but we tried to deal with as many as the big players in the whisky market as we could."

Seventy percent of the company's sales come from wine, spirits and beers, and the rest is split among pharmaceuticals, food and general labeling. Six years ago Alex recruited Bill McNaught as UK sales manager, and McNaught has been responsible for the company's high growth in the beverage sector, particularly over the past three years. He has looked at Labelgraphics' sales with a fresh pair of eyes and identified growth opportunities.

"We have always gone for quality and service," says Alex. "There are 500 to 600 printers in the UK and we don't want to compete with them all. We just want to compete with the top 10. We have the best presses that money can buy and we have just completed our fourth complete reinvestment in 24 years. Quality is not a given in this industry. There is good quality and there is excellent quality, and there can be a big difference between the two."

The office walls in Glasgow are testament to the company's commitment to quality — they are literally running out of space for all of the awards they have won from EFTA, FINAT, TLMI and other trade associations. Labelgraphics runs six Gallus Arsoma EM280KS presses, all with interchangeable screen heads. Plates are made in-house with the Dupont Cyrel FAST system. As well as inline web inspection, Labelgraphics has six offline inspection rewinders. It is also a stockist for Sato thermal transfer printers and ribbons. All operations are organized by an impressive MIS system that is the culmination of 15 years of ongoing IT development. The MIS ensures that everyone in the plant knows exactly where each job is in the workflow from origination and production to dispatch and it also captures valuable costing data.

Hot foil application
"You must know your costs and if you are making a profit," says Alex. "We have a cost-analysis meeting every day where we look at everything that we have printed in the last 24 hours. We track our effective productivity on each press and create job costing analyses to compare our estimated values to what actually happened. We investigate problems and we make recommendations. It is a meeting that is never broken and our issues are always addressed within 24 hours. You have to act on the information that the system gives you or there is no use in having it."

This feedback loop and Labelgraphics' MIS system form part of the company's efficiency strategy. Alex's sons have both been driving a lean manufacturing culture among employees, through ongoing projects with lean consultants. So far, results have been good with makeready times, setup costs and waste on press all reduced. As Alex says, "With these things, you can't think of the cost of doing them, you've got to think of the cost of not doing them."

It's certainly this strategic thinking that has brought Labelgraphics to where it is today, in a regional market that is said to be low in growth, viciously competitive, and where many companies just don't make it. So what of Labelgraphics' future?

"We have a good rapport with our suppliers and customers, and a good relationship with our staff. We are confident that we are using the best suppliers and that they are giving us their full attention. That has helped get us to where we are today.

"It's a great feeling that you have built something that is going to last. Labelgraphics was set up to see how far we could take it, and I am convinced that my sons will take the company much further than I have been able. They have got modern attitudes."

Labelgraphics will certainly be heading into a new era in two years time, when the company moves into its new building, with its new generation of directors. Alex is planning to spend more time at his second home in Sarasota, FL, USA, in his new-found leisure, but when he mentions that he will be able to log in to the company MIS remotely, you begin to wonder how much time he will actually spend on that golf course.


Glasgow, Scotland
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