Narrow Web Profile: X-label

By Steve Katz | April 19, 2012

Focusing on innovation, logistics and the supply chain, this global label power has its sights set on further expansion.

Hasslocher Straße 12, Gebesee / Erfurt, Germany

X-label is remarkable for a number of reasons. Relatively speaking, the company has come a long way in a short amount of time, and has evolved to become more than just a label printer. Leveraging well-thought out strategic acquisitions and an innovative product line that transcends labels, X-label has a growth strategy that has the company expanding not only beyond its roots in Germany, but around the globe.

X-label got its start in 1991 in Erfurt, a small town in East Germany. Note the year – not long after the fall of the Berlin Wall. “It’s a long story,” says Managing Director Jan Oberbeck, of how X-Label got its start, and how he and partner Tim Fiedler came to be involved.

According to Oberbeck, prior to the fall of the Berlin Wall, there was one label company in East Germany, “with lead times, literally, of one year. It was a different world,” he says. This company was government-owned, and the government wanted to sell it. So they sold the business to a big Austrian packaging company, which, in turn, killed the label business. Seeing an opportunity, the company’s technical managing director then turned around and formed X-Label in 1991.

Meanhwhile, at a nearby university, a couple of economics students – Jan Oberbeck and Tim Fiedler – happened to sit next to each other in class. Individually, they both had the entrepreneurial spirit, and each decided to start their own company, completely unrelated to packaging. They forged a friendship, and fast-forward a few years later, and the two decided to go into business together.

X-label’s managing directors Jan Oberbeck (L) and Tim Fiedler

During this time, Oberbeck had a neighbor that made paper measurement systems, and also had a connection to the adhesives business. With that, an idea was formed.

“We felt, Tim and I, that the label industry was growing,” Oberbeck recalls. “So in 1995 we established our own company, a trading company for buying and selling labels. We saw the industry as a real growth opportunity. We looked at smaller printers, who were working 1-2 shifts – and they were not very efficient in our eyes. At the time, we weren’t interested in understanding how to print, we focused on understanding the market and the application aspects of the business.”

Oberbeck and Fiedler focused on how to get the labels, where they should buy them, and from whom. “We said ‘Okay, we need a small printer, maybe in East Germany. At the end of the day, we were buying labels from a few different label printers, and X-Label was one of these. After a year, we had so much business, we decided to buy our own machine.”

The fledgling company bought a 1970s-era Gallus press, and used it to make blank, one- and two-color labels. “We rented a garage. One of us ran the machinery, while the other worked the phones trying to sell labels.”

Meanwhile – still working the trading business – Oberbeck and Fiedler were still buying labels from X-label. But early in 1996, the managing director of X-label called and told them the company was going into insolvency. At the time, X-label was quite small, only employing 13 people. “We said, ‘okay, let’s have a look’,” Oberbeck says, and with that, X-label as it exists today got its start. Upon graduation from university, Oberbeck and Fiedler, with the foresight to get some financial backing, bought X-label with a silent partner, the Schürfeld Group, that to this day owns a 50 percent stake in the business.

When the company was taken over in 1996, it had turnover of €2.9 million. In 2011, turnover was €123 million. That’s some serious growth. Today’s X-label employs 485 people, and estimates its yearly label production at 11 billion pieces.

To say the new owners hit the ground running would be a gross understatement. They acquired two additional label presses – a Comco and a Mark Andy, and they worked hard. They brought in new people with the pretense that there would be no money for vacations, and no money for Christmas. The early years were lean, and the hard work paid off with lots of organic growth.

In 1998, X-Label acquired two German label companies: EK-Print Etiketten GmbH, in Lubbecke, and Manz GmbH & Co. KG, in Solingen. The Lubekke facility now serves as an X-label printing plant, and in 2002 the Solingen location became the company’s center for its corporate administration, coinciding with the formation of a holding company, the X-label Group. In 2006, X-label acquired another label company, Knaup GmbH, based in Kirchlengern, Germany.

A look at the X-label timeline shows how it’s steadily taken on more and more technology to produce the highest quality products. “Our success is based on innovations,” Oberbeck says, referring to the technical developments and capabilities the company has taken on over the years. X-label started simply as a flexo house. In 1996 came UV flexo printing followed by hotmelt coating a year later. The acquisitions in 1998 were accompanied by UV offset printing, and in 1999, when the technology first came onto the scene, X-label added digital printing to its arsenal.

A major milestone came in the year 2000, when X-label invested in combination printing – offset, screen and flexo – and entered the cosmetics and spirits markets.

An especially big year for X-label was 2008, as it established its partnership with Philadelphia, PA, USA-based Sancoa International, thus spreading its coverage across the Atlantic and propelling it into a truly global enterprise. Sancoa is a packaging company that exclusively serves the health and beauty markets. The company’s tube decorating business, TubeDec, is a major player in the home and personal care arena, and made it a perfect fit for X-label. Today, cosmetics and personal care account for more than 50 percent of the label markets X-label serves, and a good portion of that business is now supplied by X-label France S.A.r.L, its printing plant in Blois, France, near Paris, which began production in 2009.

“We have all the big brands,” Oberbeck says of X-label’s home and personal care customers. “It’s quite good business if you handle it in a smart way. You need to be efficient and you need quality at the right price. And the tube opportunity is unbelievable right now.”

In 2010, the company expanded East to St. Petersburg, Russia, the home of a lucrative beverage market, and began production at OOO X-label Polygraph.

Supply Chain Solutions
The company’s relatively brief history is a mere footnote to the X-label story. The heart of this company lies in its capabilities, markets and range of products that go beyond pressure sensitive. And X-label has gone from local to global. Where the company excels has a lot to do with the differences between the North American and European label markets.

Explains Oberbeck: “At first we had a German approach – a German facility, German customers, German language and German markets. But we changed to a European approach. We now have an international sales team, with the vast majority of our customers being from outside of Germany, from all over Europe and beyond.

“The European label market is complex, and is totally different from the US market,” Oberbeck explains. “For example, take a hair care brand, where you may have 15-20 different flavors. In North America, with one language, you will reach approximately 380 million people. In Europe, with 21 languages, you will reach 280 million people. So, based on this complexity, we have 15-20 labels in 21 languages, front and back labels. Then take into account three re-launches during the year with the different flavors, and then maybe 6-8 promotions. With one product you create more than one thousand different SKUs – but the customers don’t order one thousand labels once a year, they order weekly.”

In response to the unique demands of the European market and the need for added printing space, X-label’s PS offerings include 2-face labels, multi-layer constructions, double layers and dry peel labels.

“We know North American quantities and complexities,” Oberbeck adds. “In Europe, the business is eight times more complex. In North America, the business is driven by promotions. In Europe, it’s driven by languages.”

X-label has huge customers, with demand for hundreds of millions of labels. “This is the reason why we developed a lot of supply chain solutions,” Oberbeck says, adding that solutions are based on its strategically located facilities, logistics, a multitude of converting options, and, of course, innovation.

The technology at X-label’s disposal truly runs the gamut, and includes offset, flexo, gravure, screen and digital printing in up to 14 colors. Finishing options include hot and cold foil stamping, varnish and embossing with specialty areas such as reverse and surface printing, tactile and soft-touch. In addition to pressure sensitive labels, X-label offers shrink sleeves and tube laminates, as well as a variety of specialty items.

In regard to the markets served, X-label dominates personal care, with the segment accounting for nearly 60 percent of its annual sales. Beverage is a distant second with almost 16 percent of its sales, followed by food, industrial and chemical labels.

The company prides itself on its efficiency and reliability as a means to stay on top. “We must be competitive. Since the beginning, it was clear to us that this is a mass market, and at the end of the day, a commodity market. You must be lean and competitive at every turn,” Oberbeck says. “To me, being competitive has to do with quality, service, innovation and price. We deliver to our customers hundreds of millions of labels per year, with a minimum of 1-2,000 deliveries per year, with a lot of our customers from all over Europe with thousands of deliveries.”

Looking at innovation as a means to stand apart from its competitors, X-label has developed technologies and partnerships that expand its portfolio and give customers products they can’t get elsewhere.

X-label’s Metallex technology – a development and trademark from Sancoa – has proven to be very popular among its health and beauty customers. Metallex uses the gravure process to create printed silver and gold colors, and serves as an alternative to using embossed foil to achieve the “bling-bling” effect sought after in the beauty market.

“The advantage of Metallex is that it’s a lower cost process than foil, and offers greater diversity of shapes on both labels and on tube laminate and sleeve printing,” explains Oberbeck.

One of X-label’s HoloPrint stations installed on press
Holoprint is another example of innovation as strategy. At Labelexpo 2008, Nilpeter introduced HoloPrint technology, an in-line holographic printing process that uses high-speed Nano Imprint Lithography (NIL) to make holograms. This technology achieves good speed and high register, high-resolution holographic print, with combination presses.

“At the time, HoloPrint wasn’t fully developed,” Oberbeck says. “It was just the beginning of an idea. We took the idea and made it work in two years time. Now we can make our customers holograms, without hot foil, just oriented. It’s possible to commercially make 100 percent holograms. We have complete exclusivity, and in 1-2 years we will sell the HoloPrint stations for a fee.”

Environmental sustainability is also seriously at X-label, and it shows in one of its exclusive offerings. In addition to taking steps to recycle and minimize waste and reducing the use of chemicals, the company has also partnered with Catchpoint, a company behind linerless label technology to offer linerless labels to its customers. Catchpoint labels do not require any backing material or release liner, thus reducing waste while allowing a larger number of labels per roll.

A global approach to the future
With its machinery and facilities, X-label has a very clear strategy. A tour of its multiple manufacturing facilities will show strict adherence to machinery standardization. The company customizes its Gallus label presses, and they are all the same from plant to plant.

“Everything is the same in all of our plants. Our plant in Russia is a copy of our plants in Germany and in France,” Oberbeck says. “So, if we want to move business to Russia, we move it with no problems.

“If you buy a company, integration can be difficult – there are different customers, different cultures, etc. Our strategy is to develop markets, develop new facilities and standardize what we do. Standardize everything. You can’t do it tomorrow, but you need the strategy to do it, and then it’s a question of execution,” he says.

X-label believes in maximizing its equipment and processes. “Normally, we are producing 24 hours a day, six days a week. We will use the weekend for addressing peak demand. If you look at the rotation of our markets, there are times when we are running 24/7. All of our big competitors are doing this now. When we started in the industry, we went 24/5 – we didn’t understand why we should use all our assets all day. It didn’t make sense to us at the time. But we’ve since learned. For specialty demands, we need free capacity of 30 percent – this is what the big brands want to see,” Oberbeck says.

And he makes it clear that X-label is open to taking its strategy and approach and address what he calls “the global situation” – with additional partnerships. Oberbeck says, “Regarding the future, we have more and more global competitors, like CCL and Multi-Color. They know the markets. We’re looking for a global solution, which is what led us to Sancoa. With them, we found a partner with a high level of expertise, experience and know-how. It was a perfect fit. We’re on the same page when it comes to costs and efficiency.

“We’re looking for partners who are thinking like us,” Oberbeck adds. “You must be fit to go into the fight, and the market is fighting. So you need the right conditioning.”
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