John Penhallow04.07.22
Business, they say, should stay out of politics. But politics has a nasty habit of elbowing its way into business. The events in Ukraine have not only sown insecurity in Europe’s energy markets. They have also brought gloom and despondency to every aspect of Europe’s label business. Russia’s label sector was healthy and expanding – a paradise market almost entirely equipped with western-made machinery.
Netherlands-based MPS, for example, via its local agent Ogard, has installed over 50 label presses in Russia. A few months ago it installed its sixth press in the St. Petersburg plant of label converter Okil, which claims a 15% share of the Russian market.
On the digital front, HP Indigo, through its local partner Nissa, is well established and last year installed its latest HP Indigo 25K to Azimutprint. Mark Andy is active in all Eastern European markets, and Bobst has substantial sales and its own company in Moscow, as well as an agency in Kyiv. Here again, business is believed to be at a standstill.
Technicians from France’s MGI had a narrow escape: having finished installing a digital label/packaging unit near Moscow in February, they caught the last flight home before all flights to and from Russia were stopped. And the payment?
Your correspondent asked MGI’s Nicolas Venance, who said, “We delivered ex works. No cash, no shipping. So, we got our money and our personnel. But it may be a while before we get our next order from Russia, unfortunately.”
Now the delay is anything between 8-12 weeks. For glassine, the situation is just as bad. As for inks, spare parts and other accessories are often held up in shipping containers worldwide. Scarcity, of course, means price increases. Some unfortunate label converters are locked into price and delivery contracts with their customers. Where major brand owners are involved, corporate lawyers are sharpening their knives and preparing to demand damages for breach of contract from their label and packaging suppliers. Smaller brands, lacking the same clout, are being told to wait indefinitely.
UNFEA has joined with other European label associations in urging UPM and the striking workers to settle their differences, opining that, “This strike is not proportionate to the lasting damage that may be created if it is continued any further. We urge all stakeholders (employer, unions and authorities alike), to take into consideration the European macro-economic implications of this dispute and to assess their social responsibility to the wider European community in resolving this dispute.” So far, this appeal has fallen on deaf ears.
At a label convention in Paris on March 17, Thomas Leroy of UPM courageously faced the unease of label converters present to explain why this strike had occurred in a country not known for social unrest. As he explained, a long-standing legal framework in Finland ended on January 1 of this year, and pent-up frustration on the side of the unions met with we-shall-not-be-moved resistance from UPM, which reckons it is too big to fail and not profitable enough to concede. Leroy could not see a short term ending to the strike. Cassandra-like, he also reminded his listeners that paper mills cannot be brought back into production in less than 3-4 months. When the crisis broke in Ukraine, UPM was among the first labelstock producers to announce (on March 3) that it was stopping all deliveries to Russia. In view of the present paralysis of its Finnish mills, the decision cannot have been too difficult. Its Russian distribution centers are said to be still running normally, but the distribution terminal in the Kyiv region with 13 employees is at a standstill. Stora Enso announced on March 11 that it would suspend production and sales in Russia until further notice, “Due to the ongoing invasion of Ukraine.”
“Where major brand owners are involved, corporate lawyers are sharpening their knives and preparing to demand damages for breach of contract from their label and packaging suppliers.”
At last, the sale of Chapelle Darblay will go ahead – or will it?Will the sale of UPM’s French mill really be signed and sealed? On March 1, the regional authorities of Rouen-Normandy officially and unanimously decided that they would buy the site and then resell it to the recycling company Veolia and the pulp producer Fibre Excellence. The two companies plan to recycle waste paper and cardboard there.
The main project of the consortium is to convert the existing line into the production of packaging paper. Initially, the duo plans to produce 400,000 tons of packaging board, rising to 7-800,000 tons with the start-up of the second paper machine. But there are still some bureaucratic hurdles to overcome, and the transfer of ownership and payment could take place in May or June 2022. Readers of this column may remember that this site closed in mid-2021 with the loss of 250 jobs. However, the militant trade union CGT fought a long and finally successful campaign to restart production. This is proof, if proof were needed, that Finland is not the only European country with tenacious unions.
The show’s managing director, Lisa Milburn, was ecstatic: “After the gap in real-world exhibitions caused by the Covid-19 pandemic” she announced, “The industry’s response to Labelexpo Europe 2022 shows that the international label and packaging printing industry is as vibrant as ever and is now driven by a renewed enthusiasm.” But other big names, such as Nilpeter, Gallus and Bobst, were absent and alas, rumor has it that many of those 600-odd exhibitors had not actually put their money on the table. When the postponement (to September 2023) was finally announced, it must have been a relief to put part of the blame on Mr. Putin.
Founded in 1984 by the Carré family, this company has a turnover of around 10 million euros and employs 60 people. Alliance Labels now has a total group turnover of around 95 million euros.
Netherlands-based MPS, for example, via its local agent Ogard, has installed over 50 label presses in Russia. A few months ago it installed its sixth press in the St. Petersburg plant of label converter Okil, which claims a 15% share of the Russian market.
On the digital front, HP Indigo, through its local partner Nissa, is well established and last year installed its latest HP Indigo 25K to Azimutprint. Mark Andy is active in all Eastern European markets, and Bobst has substantial sales and its own company in Moscow, as well as an agency in Kyiv. Here again, business is believed to be at a standstill.
Technicians from France’s MGI had a narrow escape: having finished installing a digital label/packaging unit near Moscow in February, they caught the last flight home before all flights to and from Russia were stopped. And the payment?
Your correspondent asked MGI’s Nicolas Venance, who said, “We delivered ex works. No cash, no shipping. So, we got our money and our personnel. But it may be a while before we get our next order from Russia, unfortunately.”
Three subjects for debate in France
There are two things that dominate conversations in France today: Ukraine, and the French presidential elections. But for the label and packaging sectors, there is a third – the acute squeeze on raw materials. UPM has around a 40% share of the French labelstock market, and the strike at the group’s Finnish mills, now in its third month (and just extended to April 16), is sufficient in itself to cause chaos. But to this must be added rising demand as the European economies continue to expand and cause panic buying by brand owners. Less than a year ago, label converters could expect to receive their labelstock within 48 hours of order.Now the delay is anything between 8-12 weeks. For glassine, the situation is just as bad. As for inks, spare parts and other accessories are often held up in shipping containers worldwide. Scarcity, of course, means price increases. Some unfortunate label converters are locked into price and delivery contracts with their customers. Where major brand owners are involved, corporate lawyers are sharpening their knives and preparing to demand damages for breach of contract from their label and packaging suppliers. Smaller brands, lacking the same clout, are being told to wait indefinitely.
UNFEA has joined with other European label associations in urging UPM and the striking workers to settle their differences, opining that, “This strike is not proportionate to the lasting damage that may be created if it is continued any further. We urge all stakeholders (employer, unions and authorities alike), to take into consideration the European macro-economic implications of this dispute and to assess their social responsibility to the wider European community in resolving this dispute.” So far, this appeal has fallen on deaf ears.
At a label convention in Paris on March 17, Thomas Leroy of UPM courageously faced the unease of label converters present to explain why this strike had occurred in a country not known for social unrest. As he explained, a long-standing legal framework in Finland ended on January 1 of this year, and pent-up frustration on the side of the unions met with we-shall-not-be-moved resistance from UPM, which reckons it is too big to fail and not profitable enough to concede. Leroy could not see a short term ending to the strike. Cassandra-like, he also reminded his listeners that paper mills cannot be brought back into production in less than 3-4 months. When the crisis broke in Ukraine, UPM was among the first labelstock producers to announce (on March 3) that it was stopping all deliveries to Russia. In view of the present paralysis of its Finnish mills, the decision cannot have been too difficult. Its Russian distribution centers are said to be still running normally, but the distribution terminal in the Kyiv region with 13 employees is at a standstill. Stora Enso announced on March 11 that it would suspend production and sales in Russia until further notice, “Due to the ongoing invasion of Ukraine.”
“Where major brand owners are involved, corporate lawyers are sharpening their knives and preparing to demand damages for breach of contract from their label and packaging suppliers.”
At last, the sale of Chapelle Darblay will go ahead – or will it?Will the sale of UPM’s French mill really be signed and sealed? On March 1, the regional authorities of Rouen-Normandy officially and unanimously decided that they would buy the site and then resell it to the recycling company Veolia and the pulp producer Fibre Excellence. The two companies plan to recycle waste paper and cardboard there.
The main project of the consortium is to convert the existing line into the production of packaging paper. Initially, the duo plans to produce 400,000 tons of packaging board, rising to 7-800,000 tons with the start-up of the second paper machine. But there are still some bureaucratic hurdles to overcome, and the transfer of ownership and payment could take place in May or June 2022. Readers of this column may remember that this site closed in mid-2021 with the loss of 250 jobs. However, the militant trade union CGT fought a long and finally successful campaign to restart production. This is proof, if proof were needed, that Finland is not the only European country with tenacious unions.
Goodbye to Labelexpo Europe 2022
At the end of last December it was all systems go for the Brussels show scheduled for late April of this year. Over 600 exhibitors, including such big crowd pullers as HP, Xeikon, Domino, Fujifilm, Konica Minolta, Epson, Durst and Canon, were already signed up, according to the organizers.The show’s managing director, Lisa Milburn, was ecstatic: “After the gap in real-world exhibitions caused by the Covid-19 pandemic” she announced, “The industry’s response to Labelexpo Europe 2022 shows that the international label and packaging printing industry is as vibrant as ever and is now driven by a renewed enthusiasm.” But other big names, such as Nilpeter, Gallus and Bobst, were absent and alas, rumor has it that many of those 600-odd exhibitors had not actually put their money on the table. When the postponement (to September 2023) was finally announced, it must have been a relief to put part of the blame on Mr. Putin.
Another acquisition for Alliance Etiquettes
Only a few months after acquiring 5/7 Etiquettes, the Alliance group, headed by Olivier Laulan, has taken control of Bernétic, a label specialist for food products and industry, based in Brittany.Founded in 1984 by the Carré family, this company has a turnover of around 10 million euros and employs 60 people. Alliance Labels now has a total group turnover of around 95 million euros.