John Penhallow07.15.16
The weather in Düsseldorf was hot and sultry, there was a major fire in an outlying hall being used to house refugees, police detained three men allegedly planning a terrorist attack in the city – and despite this, nearly all the exhibitors and visitors your correspondent spoke to seemed happy with the show. Drupa is unquestionably the star event of 2016, despite the fact that provisional visitor figures seem to show a dramatic 18% drop in attendance (from 315,000 to 260,000) compared with the previous show in 2012.
The huge increase in exhibitors of label-related equipment needs no explanation. We all know that labels and packaging are among the few bright spots on the printing horizon, but even so it was good to see so many Labelexpo exhibitors also showing at drupa, just a few months before the Chicago event. Some, like French finishing equipment maker SMAG, reckoned that drupa came a poor second to Labelexpo in value for money. Others including Andy Cook, boss of FFEI (hybrid presses), also opined to the effect that “drupa good, Labelexpo better.” IST Metz’ curing systems are for both narrow and wide web printers, and for Jochen Hildebrandt of IST the 2016 show was,“As good as, but no, not better than, 2012.” Lars Beck, boss and co-owner of diecutting specialist Kocher + Beck, was more sanguine, confirming that drupa was proving a big success. A medium-sized booth at drupa can cost an exhibitor upwards of $300,000 if you include all the extras from airfares to hotels to hospitality, and one exhibitor who was laughing all the way to the bank was Pantec, maker of inline hotfoiling equipment. In a tiny booth with no machinery, just films and photos, CEO Peter Frei told your correspondent, “We’ve already seen nearly all the customers and prospects we expected to see, plus a whole lot of others we didn’t even know about. It’s a low investment show for us, and it has really paid off.”
Another exhibitor with a smile was Konica Minolta (KM), a newcomer to narrow web digital equipment. The company has already sold seven of its dry toner digital label presses in Europe, Olaf Lorenz told your correspondent. How can a new kid on the block manage to sell into a market where 30 or more competitors are all touting their wares? “We see a gap in the market in the two to four-thousand-dollar bracket,” says Lorenz. There is one major competitor in this price range (also from Japan, curiously enough) but KM “can more than hold its own in speed and quality.” An interesting and – for label converters mildly disconcerting – remark from KM’s business development manager was that some of their sales have been to brand owners who want to bring their label converting in-house.
ETI Converting’s Max Bayzelon proudly showed his company’s US patent for its diecutting unit, which cuts face material down to 18 microns. He said, “It will even work down to 12 microns, but that needs delicate handling so we’re saying 18, which is thinner than most people thought possible.” The EU patent is pending for the same unit, and this Canadian company’s business in Europe, and particularly in France, is doing well, with many Cohesio (“make your own labelstock”) lines sold.
ETI Converting has been in the label business for decades; not so for Grafikontrol, a family-run Italian company making inspection systems for newspapers and books. A few years ago, seeing which way the wind was blowing, CEO Paolo de Grandis adapted the product line to provide inspection for labels and flexible packaging, and these sectors now make up 80% of his business.
Chutzpah from Holland
Dutch label press maker MPS did not exhibit at drupa. As mentioned in last month’s column, this company offered a daily shuttle service from the exhibition grounds to its main plant in Arnhem. This did not delight the exhibition organizers, but the trip was worth the time, according to some of the 150 people (including your correspondent) who made the journey. Company CEO Eric Hoedervangers is one of those diehards who believe that flexo remains the essential print technology for narrow web converters. “The future for labels is flexo,” he insists. “Maybe hybrid digital/flexo for some converters but always with inline finishing. Only the most expensive digital presses give the same quality as you get on our flexo machines. The break-even point between flexo and digital depends on many factors of course but it’s generally lower than many digital press makers say. For our calculation – and we’ve done a lot of calculations – the break-even is no more than 1,500 running meters – and it can be as low as 500.” But what about the startup waste? On this theme you can see Hoendervangers get the bit between his teeth: “They say digital presses have zero waste, it’s not true. Go and look at one of the market leaders, you’ll see around 10 meters of waste on each setup. Okay, for our flexo presses it’s maybe double that, but that’s not a decisive cost factor, is it?”
MPS has designed a hybrid press (in cooperation with Domino) and this was one of the three presses being demonstrated on the day of our visit. MPS marketing director Aakon Schüssel told your
correspondent, “A typical application for this hybrid press would be a high-volume generic label – printed in flexo – with a whole slew of different SKUs, all printed digitally. The machine being demonstrated has been sold to a Russian label converter.” To judge by the number of Russians present when we visited, it will not be the last MPS press to be shipped off to Moscow or wherever. MPS has also recently sold presses to New Zealand, and even to Zimbabwe, which, with the possible exception of North Korea, must be the world’s hardest country to export to.
Drupa also provided the opportunity to meet several Iranians and get some more background on a country where few westerners, as yet, have done business. Gallus, as readers of this column may remember, already has a presence in Tehran, and according to sources who should know, “a leading US label press manufacturer” already has two presses running in Iran. Many Iranian label converters, however, are using equipment dating from the days of the Shah. Iranians repeated again and again the problem of illegal imports, mostly from Turkey. The frontier between the two countries is notoriously porous, and anything from a roll of labels to a crate of AK-14s gets through with a wink and a nod... “…and our government does nothing to protect local industry.” (Haven’t we heard that before somewhere?). Iranian exhibitors at drupa were few and far between. There were supposed to be two, however your correspondent only found one – but a good one. Hamta International, Tehran, represents nine companies in the graphic arts field, including Dimuken, MGI and Nilpeter. Financing import deals is the big problem, a Hamta spokeswoman told your correspondent, but the oil is beginning to flow, its price is rising, and the country desperately needs Western technology in all fields, including graphic arts.
Greek grumbles
Many people think the Greek economy is in a right royal mess – and those people are the optimists. So since the label business generally follows GDP, suppliers must all be going out of business – right? Well no, not if you talk to Joanis Loxas, whose company represents, imports and distributes labelstock for Herma and diecutting tools for Kocher + Beck. Helped by his 30-year experience in the business, Joanis knows almost every Greek label converter personally. So what is the state of the Greek label market? “It’s a strange situation,” he says. “Greek agricultural exports, such as olive oil, used to be shipped out in bulk then repackaged and labeled in the country of destination. Now, with the crisis, our producers are learning that margins can be better if they pack and label their products here. So the label business, despite everything you read in the newspapers about the Greek economy, is doing okay.”
There is no longer any local production of PS labelstock in Greece; per capita consumption of pressure sensitive labels is only around four square meters (compared with over 12 square meters in Northern Europe) so there is plenty of room for growth. Joanis’ son Haris explains that the leading label converters have been investing in new presses. Can they get finance? The answer is yes, for those who can show a healthy balance sheet. The Greek economy is not out of the woods yet. The immediate threat of a “Grexit” (exit from the Euro-zone and/or the European Union itself) seems to have receded; however it still looms like a sword of Damocles over the country. But Joanis Loxas remains cautiously optimistic. “The label market sector is still a stronghold within the otherwise heavily depressed Greek market. It’s not easy to predict how much longer it will take for things to get generally better, but the country will never sink. It can only dive for some time and eventually re-emerge. Another big element that supports optimism is the recovery of the tourist industry that also positively affects the label business. But if you see what happens here in car, real estate, jewelry, fashion business... it’s a real disaster. When you know what we Greeks have been through over the past seven years, things can only get better.”
Let’s hope he’s right.
The huge increase in exhibitors of label-related equipment needs no explanation. We all know that labels and packaging are among the few bright spots on the printing horizon, but even so it was good to see so many Labelexpo exhibitors also showing at drupa, just a few months before the Chicago event. Some, like French finishing equipment maker SMAG, reckoned that drupa came a poor second to Labelexpo in value for money. Others including Andy Cook, boss of FFEI (hybrid presses), also opined to the effect that “drupa good, Labelexpo better.” IST Metz’ curing systems are for both narrow and wide web printers, and for Jochen Hildebrandt of IST the 2016 show was,“As good as, but no, not better than, 2012.” Lars Beck, boss and co-owner of diecutting specialist Kocher + Beck, was more sanguine, confirming that drupa was proving a big success. A medium-sized booth at drupa can cost an exhibitor upwards of $300,000 if you include all the extras from airfares to hotels to hospitality, and one exhibitor who was laughing all the way to the bank was Pantec, maker of inline hotfoiling equipment. In a tiny booth with no machinery, just films and photos, CEO Peter Frei told your correspondent, “We’ve already seen nearly all the customers and prospects we expected to see, plus a whole lot of others we didn’t even know about. It’s a low investment show for us, and it has really paid off.”
Another exhibitor with a smile was Konica Minolta (KM), a newcomer to narrow web digital equipment. The company has already sold seven of its dry toner digital label presses in Europe, Olaf Lorenz told your correspondent. How can a new kid on the block manage to sell into a market where 30 or more competitors are all touting their wares? “We see a gap in the market in the two to four-thousand-dollar bracket,” says Lorenz. There is one major competitor in this price range (also from Japan, curiously enough) but KM “can more than hold its own in speed and quality.” An interesting and – for label converters mildly disconcerting – remark from KM’s business development manager was that some of their sales have been to brand owners who want to bring their label converting in-house.
ETI Converting’s Max Bayzelon proudly showed his company’s US patent for its diecutting unit, which cuts face material down to 18 microns. He said, “It will even work down to 12 microns, but that needs delicate handling so we’re saying 18, which is thinner than most people thought possible.” The EU patent is pending for the same unit, and this Canadian company’s business in Europe, and particularly in France, is doing well, with many Cohesio (“make your own labelstock”) lines sold.
ETI Converting has been in the label business for decades; not so for Grafikontrol, a family-run Italian company making inspection systems for newspapers and books. A few years ago, seeing which way the wind was blowing, CEO Paolo de Grandis adapted the product line to provide inspection for labels and flexible packaging, and these sectors now make up 80% of his business.
Chutzpah from Holland
Dutch label press maker MPS did not exhibit at drupa. As mentioned in last month’s column, this company offered a daily shuttle service from the exhibition grounds to its main plant in Arnhem. This did not delight the exhibition organizers, but the trip was worth the time, according to some of the 150 people (including your correspondent) who made the journey. Company CEO Eric Hoedervangers is one of those diehards who believe that flexo remains the essential print technology for narrow web converters. “The future for labels is flexo,” he insists. “Maybe hybrid digital/flexo for some converters but always with inline finishing. Only the most expensive digital presses give the same quality as you get on our flexo machines. The break-even point between flexo and digital depends on many factors of course but it’s generally lower than many digital press makers say. For our calculation – and we’ve done a lot of calculations – the break-even is no more than 1,500 running meters – and it can be as low as 500.” But what about the startup waste? On this theme you can see Hoendervangers get the bit between his teeth: “They say digital presses have zero waste, it’s not true. Go and look at one of the market leaders, you’ll see around 10 meters of waste on each setup. Okay, for our flexo presses it’s maybe double that, but that’s not a decisive cost factor, is it?”
MPS has designed a hybrid press (in cooperation with Domino) and this was one of the three presses being demonstrated on the day of our visit. MPS marketing director Aakon Schüssel told your
correspondent, “A typical application for this hybrid press would be a high-volume generic label – printed in flexo – with a whole slew of different SKUs, all printed digitally. The machine being demonstrated has been sold to a Russian label converter.” To judge by the number of Russians present when we visited, it will not be the last MPS press to be shipped off to Moscow or wherever. MPS has also recently sold presses to New Zealand, and even to Zimbabwe, which, with the possible exception of North Korea, must be the world’s hardest country to export to.
Drupa also provided the opportunity to meet several Iranians and get some more background on a country where few westerners, as yet, have done business. Gallus, as readers of this column may remember, already has a presence in Tehran, and according to sources who should know, “a leading US label press manufacturer” already has two presses running in Iran. Many Iranian label converters, however, are using equipment dating from the days of the Shah. Iranians repeated again and again the problem of illegal imports, mostly from Turkey. The frontier between the two countries is notoriously porous, and anything from a roll of labels to a crate of AK-14s gets through with a wink and a nod... “…and our government does nothing to protect local industry.” (Haven’t we heard that before somewhere?). Iranian exhibitors at drupa were few and far between. There were supposed to be two, however your correspondent only found one – but a good one. Hamta International, Tehran, represents nine companies in the graphic arts field, including Dimuken, MGI and Nilpeter. Financing import deals is the big problem, a Hamta spokeswoman told your correspondent, but the oil is beginning to flow, its price is rising, and the country desperately needs Western technology in all fields, including graphic arts.
Greek grumbles
Many people think the Greek economy is in a right royal mess – and those people are the optimists. So since the label business generally follows GDP, suppliers must all be going out of business – right? Well no, not if you talk to Joanis Loxas, whose company represents, imports and distributes labelstock for Herma and diecutting tools for Kocher + Beck. Helped by his 30-year experience in the business, Joanis knows almost every Greek label converter personally. So what is the state of the Greek label market? “It’s a strange situation,” he says. “Greek agricultural exports, such as olive oil, used to be shipped out in bulk then repackaged and labeled in the country of destination. Now, with the crisis, our producers are learning that margins can be better if they pack and label their products here. So the label business, despite everything you read in the newspapers about the Greek economy, is doing okay.”
There is no longer any local production of PS labelstock in Greece; per capita consumption of pressure sensitive labels is only around four square meters (compared with over 12 square meters in Northern Europe) so there is plenty of room for growth. Joanis’ son Haris explains that the leading label converters have been investing in new presses. Can they get finance? The answer is yes, for those who can show a healthy balance sheet. The Greek economy is not out of the woods yet. The immediate threat of a “Grexit” (exit from the Euro-zone and/or the European Union itself) seems to have receded; however it still looms like a sword of Damocles over the country. But Joanis Loxas remains cautiously optimistic. “The label market sector is still a stronghold within the otherwise heavily depressed Greek market. It’s not easy to predict how much longer it will take for things to get generally better, but the country will never sink. It can only dive for some time and eventually re-emerge. Another big element that supports optimism is the recovery of the tourist industry that also positively affects the label business. But if you see what happens here in car, real estate, jewelry, fashion business... it’s a real disaster. When you know what we Greeks have been through over the past seven years, things can only get better.”
Let’s hope he’s right.