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Struggles of a small converter; Mark Andy makes

January 16, 2008

By Greg Grishchenko
During my last visit to Kyiv in 2005 to report about the label industry in Ukraine, I was impressed by the obvious progress playing off the rapid growth of domestic food produce. Since gaining independence in 1991, Ukraine has put forth considerable efforts to regain its reputation as the bread basket of the USSR. Recent success with agricultural produce has shown the country’s potential as a major food supplier and exporter, even when farmers are hindered by inefficient practices and the slow pace of economic reforms.
While a significant volume of labels in Ukraine is printed on sheetfed offset equipment, there is evidence of a growing presence of narrow web flexo presses in the country’s industry. The pace of the local packaging market cannot be compared with oil-rich Russia next door, but Ukraine’ rapidly growing food and liquor industries are becoming a major driver for local pressure sensitive label printers.
The 13th International Polygraphy show (publishing/advertisement printing technologies, materials and equipment, digital printing, special printing technologies) took place in September at the National Expocenter of Ukraine in Kyiv. Polygraphy2007 included nearly 200 exhibitors from Russia and Ukraine. The majority of the exhibitors came from Ukraine and included small businesses, local materials distributors, and equipment suppliers from Western Europe and Japan (Xerox, KBA, MAN Roland, Komori, etc.), that chose to be represented by local trading companies.
Out of only three narrow web press exhibitors, US based Mark Andy was the only global company to attend. Mark Andy was introduced by ECS-Print Ukraine, a subsidiary of the Russian holding company ECS-Print (formerly Apostrof). Previously, Mark Andy and Comco brands were sold by Variant, of Russia, which was acquired by ECS-Print in 2006. ECS-Print chose to display the Mark Andy 2200 press with print width of 254mm (10"), six color stations and a diecutting section. The other two narrow web flexo presses at the show were made by Ukrainian companies located in Kyiv: a central impression eight-color machine with a print width up to 420mm (16.5") manufactured by Kievpoligrafmash; and a small four-color bench printer with a maximum width of 186mm (7.3") made by Bulat. Locally made presses are not of the same quality as comparable American or European machines, but with the price tag being a fraction of Western made counterparts, they have found a niche in the domestic market.
Mark Andy sold seven of the 2200 presses in Ukraine.

A challenging economy
In 1996, a company called Verias was launched in Kyiv to produce pressure sensitive labels and flexible packaging in expectation that it could supply the growing food sector. The small company (about 30 people) began with a UK-made Edale E250S four-color flexo press. Today it has two Edales and a Mark Andy 2200 press, which was purchased in 2005.
Asked about current state of label printing by small converters, Oleksiy Kostenko, Verias’ vice president, says, “There are two significant problems in the country making life difficult for small business operators: financing and cash flow. Business loan interest rates are in the 15 to 20 percent range, and payment terms that are stated in purchase agreements never exceed 30 or 45 days net. However, in reality label makers consider themselves lucky if they get paid in three months.
“The greatly desired customers in Ukraine are liquor manufacturers that require the highest quality pressure sensitive labels in large numbers,” Kostenko says. “In the late 1990s and early 2000s, the Ukrainian liquor industry was the fastest growing in the food and beverage segment with about 50 percent of the market in counterfeit products. So the legitimate distilleries formed a very competitive market for label makers and did not feel obligated to pay bills on time due to a frail and ineffective judicial system.”
He said that the company’s financial problems caused significant delay in the delivery of the Mark Andy press
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