Narrow Web Europe

Pulp fiction

July 12, 2011

Paper manufacturers might not be making a killing after all.

Some are pointing to China’s demand as a top reason for price hikes.

It is no news to anyone in the label business that raw material prices are rising. So paper manufacturers must be making a killing, right? Well, no, if we are to believe industry experts at the Prima congress held in Berlin in May of this year. These annual conferences, started back in 1969, bring together the Great and Good of Europe’s managers from all parts of the paper business.

Keynote speaker Berry Wiersum of Sappi put the blame squarely on the increasing scarcity of all natural resources, and particularly of lumber. Apart from South America, no region of the world has the space to expand its forests. The north of Russia has plenty of trees, but it also has lousy infrastructure and a worse climate – and the new trees you plant there today won’t be ready for harvesting for another 70 years, which plays badly to the environmental lobby. So trees are in short supply. Now enter the next villain in the drama: China. Short of trees and desperately short of wood pulp, China is buying pulp (and coal, oil, wheat, you name it) as if it were going out of style, which, for paper, might be true long-term but is sending prices sky-high here and now. To put it in perspective, the world production of wood pulp last year was 53 million metric tons; of this, 10 million was exported to China. Western paper mills are having to pay through the nose to get their hands on whatever pulp the Chinese haven’t already taken. This in turn is hurting labelstock producers, and particularly those producers who are not part of vertically integrated wood-to-paper groups.

Speakers at the Prima congress included several Cassandras, but Mats Nordlander of Stora Enso sounded a message of hope. Fiber-based label and packaging substrates will continue to see good growth, he opined, as Third World populations get richer and aspire to packaged foods and other goods. Here again, the performance of China is critical, he pointed out, because the ‘workshop of the world’ is producing mainly for export to the developed world, and these exports need high-quality packaging and labeling.

New liner line
Mondi is not the biggest paper producer in the world, but with sales of just under $9 billion it counts among the heavyweights. The group’s avowed aim is to be among the top producers in all its world markets. So the fact that Mondi has now reinforced its position in the release liner business needs to be taken as a serious declaration of intent. Mondi’s new coating line, recently installed at its plant in Germany, is billed as the most productive line of its type in Europe, with an operating speed of 800 meters (2,600 feet) per minute and a width of 2.3 meters (7.5 feet).

The new facility, according to plant manager Patrick Lennertz, uses the latest technology to apply a very even, and if necessary, a very thin coat of silicone, and low-energy technology for the drying process. Mondi stresses its “environmentally responsible” strategy, which involves using only papers from FSC-certified forests, and solvent-free silicones. Asked about the fact that most used liner finishes up in landfill, Carsten Lange, CEO of Mondi’s Release Liner Division, replied, “We are looking for possible recycling solutions… It is indeed a problem for the whole industry, and particularly for the label end user.”

Interpack – going for a song
Serious-minded readers of L&NW might not have followed the Eurovision Song Contest (won this year by two singers from Azerbaijan, just in case you’re interested). Normally this contest has little effect on the packaging industry, but this year was different, and visitors to Interpack in Düsseldorf found the city brought to a standstill by enthusiastic music lovers. 166,000 visitors made it to the show (Interpack, that is). This is around 35,000 fewer than at the previous show in crisis year 2008. No doubt the missing visitors were all music-lovers.

Among the 2,700 exhibitors at Interpack were major players like Heidelberg, which showed its Linoprint digital inkjet printing system. Heidelberg has for many years blown hot and cold over digital printing (it was one of the pioneers, but then dropped the idea) and is now blowing hot again. According to Linoprint division manager Daniel Dreyer, the Linoprint DriveLine, demonstrated at the show, “offers a well-rounded portfolio for variable, high-quality printing of labels, blisters and plastic foils, as well as folding boxes.” It is not yet clear how this line of products will mesh together with Heidelberg’s recently announced partnership involving Japanese digital print specialist Ricoh.

A few label converters exhibited. Among them was the Schreiner Group, whose Medipharm Division showed various label-based innovations to make hospitals safer for both patients and staff: used needle protection, labels for auto-injection and various security labels. Not mind-blowing breakthroughs, for sure, but examples of what sales director Diethard Schäfer calls “understanding the end users’ problems, and working together with them to find solutions.” Another exhibitor was Di-El Tack, an Israeli company specialized in self-adhesive closure solutions for the food industry, and in particular for re-sealing. Di-El Sales Manager Ofer Goldfisher told your correspondent after the show: “Interpack was a very good occasion to launch Bend-Seal, our new reclosable system for flexible packaging. We are now negotiating with potential distributors and licensees. As soon as we finish this stage we will start our marketing operation.” He also insisted modestly, “Most of the visitors emphasized that Bend-Seal is the only new product they found at the show.” So now you know.

French converters ponder labor issues
This year’s congress of UNFEA, the French label association, was held in Lyon, which, as even the most unassuming Frenchman will tell you, is the gastronomic capital of the world. “If the theme of last year’s conference was ‘Guarded Optimism’,” said UNFEA board member Dominique Durant des Aulnois, “this year we can claim ‘Encouraging Convalescence’.” A member survey showed rising sales for 75 percent of companies. Label sales to the wine and pharmaceutical sectors were particularly encouraging, he added. Although rising raw material prices are still causing anxiety and threatening margins, one third of French converters plans to invest in a new press within the next 12 months.

Most French label printers are small, and do not suffer from the labor conflicts that plague bigger companies. This is not to say such conflicts are absent, and Arnaud Couvreur gave delegates an inside story of the collective bargaining of wage increases for the paper and packaging converting sector. Wage demands have cooled down over the past two years due to the economic situation, but this year and next are likely to see the situation heating up, according to Couvreur; recent union elections saw a shift to the left and, with company profits recovering, union negotiators are sharpening their knives. France is a wonderful place to live (and eat) but generally reckoned to be the most troublesome and difficult place in the developed world for a company to shed staff.

In France, health and pension insurance are both compulsory, of course, but so-called “complementary insurances” exist to improve the minima provided by the compulsory schemes. Since many smaller label converters do not have the expertise to get the best complementary cover for their employees, an enterprising insurance broker has signed a deal with UNFEA, and Laurent Vivier addressed the congress to explain the advantages of these insurance policies for both company owners and employees. It is perhaps significant of the business climate in France that UNFEA found it useful in a short (one-day) congress to devote one third of the time to social issues. But the most remarkable presentation was reserved for the end of the day.

Many people (including until recently your correspondent) have not heard of the name of Christophe Pinna. Now retired from top-level sport, he was twice world champion of karate, and still has the physique no right-thinking man would pick a fight with. But “courage not caution” is UNFEA’s watchword, and the association had invited Pinna to its congress, where he proceeded to demonstrate his skill in combat against committee member Christian Poirault – who was predictably and repeatedly floored by the champion. Pinna then showed some unbelievable athletic feats, before giving the closing address to delegates on the subject “dealing with conflict and stress in the business environment.” He probably has an unfair advantage over most businessmen when it comes to friendly persuasion.

Italian overtures – in the shadow of the volcano
Smoke from Etna was clearly visible as some 380 FINAT members gathered in Sicily for the label association’s annual congress. Co-hosting the event was the Italian label association GIPEA, whose president Alfredo Pollici summarized the latest news from his homeland, noting that Italy this year is celebrating the 150th anniversary of its unification. Less romantic but more hard-headed than Garibaldi’s men, Italy’s 450 label converters saw their average sales rise by 9 percent in 2010, to an estimated $1,280 million, consuming 560 million square meters (6,030 million square feet) of substrate. GIPEA’s aim, said Pollici, continues to be to help its 87 member companies in technical, environmental and legal fields, and to collect, interpret and publish detailed statistics on the quarter-by-quarter evolution of the Italian label industry.

FINAT’S president for the past two years has been Andrea Vimercati, and in an uncontested election (Etna’s smoke was white), Kurt Walker of tesa Bandfix in Switzerland was elected as his successor. Vimercati, a manager of family-owned label converter Pilot Italia, has been an active and energetic president, contributing richly to the success of FINAT’s Young Managers’ Club and to other initiatives. Walker will bring his long years of experience in the label industry to bear on the problem of keeping up FINAT’s momentum in a fast-changing environment.

Secret discussions in smoke-free rooms
Meeting behind closed doors, a select group of label industry experts, aided and abetted by an even more select group of journalists, debated the various label industry awards to be presented during Labelexpo in Brussels in September of this year. The judges’ lips are sealed on all the verdicts except one, and it can be revealed that it was unanimously agreed to award the R. Stanton Avery Lifetime Achievement Award for 2011 to Helmut Schreiner, owner-manager of the Schreiner Group.

Taking over from his father 30 years ago, he has built up the Bavaria-based Schreiner Group into a highly profitable $156 million business. What’s more, he has done it largely thanks to a sincere and continuing interest in the welfare and professional development of his employees. And he never raises his voice – well, hardly ever. It’s managers like Helmut Schreiner that give paternalism a good name.
  • Dscoop Post-Show Report

    Dscoop Post-Show Report

    Greg Hrinya, Associate Editor||April 7, 2017
    “Imagine” was the theme for the annual gathering of users of HP Indigo digital print technology.

  • Materials Handling

    Materials Handling

    Steve Katz, Editor||April 7, 2017
    Working without these products may cause employee injury, damaged goods and lost revenue.

  • Adhesives Update

    Adhesives Update

    Greg Hrinya, Associate Editor||April 7, 2017
    Label adhesives must meet a variety of performance and manufacturing requirements.