Bullish in Belgium
Just over the frontier in Belgium are the headquarters of two of Europe’s largest label converters: Bopack and Reynders. Bopack recently wound up its labeling systems division, citing falling sales and “deadly” foreign competition. Bopack Systems (which is separate from Bopack Labels, though both owned by the same family) had sales of €16.6 million ($21 million) in 1997, its best year, but both sales and profitability were hit in 2008.
According to CEO Timothy Boehlen, “For a long time we had good, profitable business designing and manufacturing custom-built labeling systems. But faced by increasing competition from makers of standard labelers, we decided to enter that business as well. However, we were confronted by murderous competition from foreign brands, mostly subcontracting their manufacture in Asian countries. Then in the last quarter of 2008 we faced a 33 percent decline in demand and were forced to put one quarter of the 60-strong work force on temporary unemployment. Continuing losses forced us to file for voluntary liquidation, which we did on January 8th of this year.”
Scarcely two weeks later, fellow Belgian Zetes announced the acquisition of the Bopack labeling division along with 30 of its staff. This latest acquisition – following similar moves in France and Spain – places Zetes in the front rank of European labeling systems suppliers. It is an example of how players who went into the recession with a strong balance sheet are making carefully selected acquisitions with a view to taking advantage of the upturn when it comes.
Bopack Label, meanwhile, already a market leader in France and in Benelux, has jumped on the digital bandwagon with an HP Indigo ws4050, just recently installed in one of its four French label plants.
Reynders has also battened down its hatches, but according to Business Unit Manager Christian Bosschaert, it has reduced neither its staff nor its investment schedule. “Our sales of high-tech labels for the automobile industry fell to zero in December 2008,” says Bosschaert. “But our big advantage is that we’re present in most label end-user sectors, and some of them are doing moderately well. Digital labels are doing satisfactorily, as are anything to do with promotion, marketing and product decoration. Pharmaceutical labels are scarcely affected by the downturn; in fact, labels for anti-depressants are at an all-time high. Booklet and multi-page labels, another of our specialties, are also continuing to do well. Our investment program is continuing unchanged, at least until mid-year.”