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Manufacturing is still moving east

March 30, 2010

Despite the protectionist rodomontades of some of Europe’s leading politicians, manufacturing industries continue to move out of the high-cost Western European theatre. Much of the benefit is going to the countries on the eastern fringe of the European Union. When, despite protests, the terribly British Cadbury’s was acquired by the utterly American Kraft Foods, there were hopes that Cadbury’s major plant near Bristol, England, might be saved from closure. Sorry, not possible, said the new owners as they moved everything to Poland, there to add to the order books of the Polish label and packaging industries. In fact, if you want to see a flourishing pressure sensitive label sector at work, Poland is probably the best place in Europe to look. New label converters are springing up, and international leaders like CCL are jostling with many homegrown Polish converters.

Just over the Polish border in Slovakia, label converter Aluprint is also doing very nicely, thank you. This medium-sized company (€14 million sales expected in 2010) makes mostly wet glue and wraparound labels, but recently installed a Müller Martini Aluprinta press and Martin Automatic rewinder to boost its output of pressure sensitives. Run lengths fell dramatically from 35,000 square meters in 2008 to just 25,000 square meters last year, but with total annual production still around 25 million square meters (250 million square feet) and a three-shift, seven-day production schedule, the future looks bright as Slovakia and its neighbors move out of recession.

Uptick at Heidelberg

During 2009 there was much news about Heidelberg, most of it bad, but things might just be starting to look up for Europe’s biggest press manufacturer. After a radical reorganization, during which several senior managers were invited to take their talents elsewhere, Heidelberg’s fourth quarter 2009 order intake at €609 million ($840 million) was the highest for five quarters, due to strong business performances in China and Germany. The company is reinforcing its presence in the label sector (where its Speedmaster presses are world leaders for sheet label printing), and recently launched new workflow managing software specifically for the label sector.

Another recent development at Heidelberg concerns digital printing. Heidelberg was a pioneer in this field, and back in 2002 a senior Heidelberg manager went on record saying, “I cannot imagine Heidelberg without digital printing, just as I cannot imagine digital printing without Heidelberg.” But just two years later Heidelberg’s imagination changed and it sold out to its partner Eastman Kodak. In 2008 at Drupa, Heidelberg again put its toe into the digital water with its Linotype d-o-d inkjet press for labels and packaging. Today, the respected German newspaper Handelsblatt reports that Heidelberg is again looking for partners – or acquisitions – in order to develop a range of digital printing equipment.

Heidelberg CEO Bernhard Schreier is quoted as saying, “We don’t have the financial capacity to develop our own equipment, but before the end of 2010 we will have finalized an agreement to sell digital printing equipment under the Heidelberg brand, and I hope we will be able to propose as wide a range of digital technologies as possible for our customers.”

Picking up the pieces

When European offset press manufacturer Drent-Goebel went under in 2009, competitor Müller Martini was quick to acquire patents and other technology rights from the deceased company. Two former employees also saw their chance to provide parts and service to Drent’s (mostly European) customers. It was a risky time to start a new venture, but it paid off. DG Press Services now has 12 ex-Drent employees on its payroll. Things now run so smoothly that the two entrepreneurs, Peter Kloppers and Remko Koolbergen, are positive that within the year their company will need to hire more employees.

A LED balloon?

At Drupa in 2008, and at last year’s Labelexpo Europe, several exhibitors showed prototype drying units using light-emitting diode (LED) technology. Low energy consumption and fast warm-up time make LED-UV look like the eco-friendly answer to a label converter’s prayer. IST Metz and Atlantic Zeiser are among the European companies researching the feasibility of LED drying, but have not so far come up with any out-of-bath jumping innovations.

The problem, explains IST Metz’s Berndt Brandl, is that LEDs work on a very narrow band of wavelengths, such that inks must be reformulated to “fit” this wavelength. Making special inks and developing special equipment are both expensive pursuits so long as demand remains nebulous or non-existent. However, if and when LED drying makes a breakthrough it will probably happen first in the narrow web inkjet sector, and could take the form of major press manufacturers offering a standard LED option, in combination with one or more major ink manufacturer. Ink manufacturers Marabu and Zeller+Gmelin (and no doubt others) are actively researching the technology.

RFID: Still a long way to go

A study carried out by the EU’s statistical office Eurostat shows just 3 percent of European enterprises using RFID technology. The Netherlands leads with 9 percent of companies; overall, RFID is used mainly for access control and traceability. Traceability and supply chain control are the motivation behind the large-scale introduction of RFID labels by one of Germany’s leading fashion retailers, Gerry Weber. Twenty-five million RFID textile labels will from now on be sewn into Gerry Weber garments every year. The communications infrastructure linking all points of the supply chain has been developed by Deutsche Telekom, and the RFID labels are designed and manufactured by Avery.

While many experts are worrying that mass use of RFID tags might not happen, other experts are pondering the potential problems if it does. The main headache is recycling, and there are no established processes for separating used RFID tags from other label or packaging waste. So instead of forming valuable side-products, the copper, aluminum and silver used in RFID tags remain in the shredded or pulped material where, if use of RFID becomes generalized at item level, the recyclability of the material could be compromised.

Chasing digital in China

With the Chinese economy back in expansion mode, label press manufacturers are looking hard at this huge potential market, all asking themselves, “a) Will they buy my product, and b) Will they then copy my technology?” For Belgium-based digital press maker Xeikon, a) outweighs b), and at the recent Labelexpo Asia show it signed a distribution agreement with Shanghai-based United Printing Equipments, which describes itself as is one of the most successful suppliers of flexo printing equipment in China, with more than 10 years of experience.

United Printing’s president Benny Shaw opines that digital presses are ideal for China. “They are very easy to use and integrate with their existing setups, which means that traditional printers will immediately enjoy the many commercial benefits they deliver and see a fast return on their investment.” With HP Indigo already established in China, Xeikon will certainly not have the field to itself, but given the exponential growth of digital label printing worldwide, coupled with the gung-ho expansion of the Chinese economy, there could be fast returns on investment all round.

Scaling the North Face

North Face is the name chosen by an alliance of 14 non-competing print companies in the North of France. Its aim is to provide a full range of print services and to respond to invitations to tender at both national and European levels. A leading player in this alliance is Stratus Packaging, a major label converter. Stratus’ CEO and owner Isidore Leiser is equally frank about how the French label sector has also taken it on the chin over the past year.

“Self-adhesive label sales in France were down 10 percent in 2009,” he says, “and Stratus did slightly better than average, but we had to cut costs by not renewing fixed-term work contracts. We also had to apply for authorization to put some permanent staff on short-term unemployment.” (You don’t do that lightly in France.)

Avery Greenery – and granite

After years of discussions and several false starts, a liner recycling scheme has been operating since January 2010 in France, Germany, Britain and Benelux. This one is set up by Avery Dennison, who will collect used PET liners from end users and group them for recycling. Conditions are that the end user should separate out the PET liner for collection and that it should be a Fasson brand product.
The German Label Association, at its recent congress, also dwelt on green issues, and in particular how “climate-neutral” production can be achieved. A presentation by Felix Egger of Gallus dwelt on the hitherto unsuspected ecological virtues of granite as a component of label presses.

Print quality and science

Print quality has been a seat-of-the-pants affair since the time of Gutenberg, but many recent studies have attempted to define quality more scientifically. A study carried out in Germany aims to compare the quality of flexo, offset, waterless offset and letterpress. Using inks from German manufacturer GSB Wahl and presses from Gallus, the study compares dot gain, dot squeeze, ink acceptance and gloss over the various print technologies. Among the many findings is that the highest gloss is achieved with processes that use low viscosity inks. While the scientific rigor and statistical data of this study are impressive, the transfer of findings from the laboratory to the shop floor may be difficult to achieve.

Label and packaging machinery

Along with Italy, Germany is Europe’s leading manufacturer of printing and converting equipment, and the annual report of the German Packaging Machinery Manufacturers’ Association can be summed up in the words, “Situation serious but not hopeless.” Total German packaging machinery sales in 2009 were 15 percent down from 2008, but with an improvement in the last quarter. The home market was relatively solid, but it represents less than one quarter of total sales. The major disaster area was exports which fell in 2009 by 25 percent overall, with exports to USA falling by 34 percent.

Italian label association takes it on the chin

The label industry in Italy collects detailed statistics on converters’ activities. At the December 2009 annual meeting of label association GIPEA, members were waiting to hear the bad news and did not have to wait long. Association president Alfredo Pollici announced an 8.3 percent fall in sales in the first nine months of the year, compared with 2008. Total square meters converted fell by 7 percent, with average square meter prices declining by just over 2 percent to €1.48. The market situation in 2010, said Pollici, would most likely be “stable.”

Loves me, loves me not…

Eyebrows were raised when two years ago Italian press maker Gidue terminated its agreement with its French distributor Smag. Now the resurrected Nuova Gidue is busy mending fences and has again entrusted its distribution in France to Smag. Commenting on the events of the past 18 months, Federico d’Annunzio, managing director of Nuova Gidue, says: “The past dreams of globalization led to mistakes which must not be repeated. A strong local organization is fundamental to the French market, and Smag can provide a true first-class service.”


There is scant love lost, politically, between Greece and Turkey, so it is with pleasure that we learn that a delegation of Greek label converters were invited to attend the annual congress of the Turkish label association. Now if only a few more countries could follow that good example, there could be a Nobel Peace Prize for someone.
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