John Penhallow04.04.23
The venerable German Institute for Economic Research has published its latest survey of the business climate in the packaging sector. Prospects for the coming months are bleak and have never been bleaker, so say most respondents. Insecurity about energy and raw material prices are among their worries. And can we blame them? Well, up to a point we can. Rather than wait for a unified European answer to soaring energy prices, Germany went its own way. Relatively favorable conditions now shield Germany’s industries as they adapt to the non-availability of cheap Russian gas. This may be good news for Germany’s heavy industry, but the paper and packaging sectors don’t share it.
The latest opinion poll published by the Institut für Wirtschaftsforschung shows rank pessimism caused mainly by insecurity about future prices for paper and other raw materials. FINAT’s Q4/2022 statistics reflect this, showing a 24% fall in labelstock deliveries to European converters, the steepest fall since records were started. As for paper and board as a whole in Europe, total production in 2022 was 6% down on the previous year, but imports were up, leaving total 2022 consumption unchanged. Cepi, which provides detailed paper and board statistics, attributes this poor performance to Europe’s economic slowdown and to rising energy costs.
Hence the fourth quarter FINAT statistics, which record tonnage volumes shipped from mills. The French label association UNFEA tracks euro sales, and surprise surprise, last year was pretty jolly, particularly toward the end. Label sales over the year were up by 15%, which allowing for inflation still gives a real increase of at least 5-6%, enough to keep converters smiling. But how have converters managed to pass on hefty price increases?
Under the cloak of anonymity, a converter told your correspondent how it’s done. Brand owners and food manufacturers are playing the blame game, and some of the blame falls on packaging manufacturers. But while blaming Nestlé or Mars gets you prime-time headlines, blaming the packaging industry doesn’t because they’re not household names. An added advantage for labels, says the anonymous informer, is that the extra 15% on the price is too little for the brand owner to worry about. Could be true, sounds plausible.
With 120 employees, Makro is in the same business as Sidel but has been assured that it will continue as a separate entity within the group. Sidel is also burnishing its ecological credentials by opening up a new plant for PET recycling. “There is a big demand for recycled PET,” says Sidel’s packaging expert Naimi Boutroy, who adds, “But demand is outstripping supply.”
With perhaps just a tad of hyperbole, Sidel reckons its pilot r-PET line “…will also empower Sidel in shaping the packaging solutions of tomorrow.”
This center is specialized in RFID and printed electronics, and Fedrigoni has acquired it lock, stock and barrel with a view of taking advantage of its patents and the expertise of its technicians, as well as cooperating with the local International Paper College. We can expect to see more of Fedrigoni as it expands its presence in the label market.
Making paper from grass is not a brand-new idea, but Germany’s Creapapier has taken the technology one step further. Once harvested, the hay is air-dried and shredded, then pressed into pellets. According to the manufacturer, these can be used directly by any paper mill, needing no chemical treatment and providing a “green” alternative to chopping down trees. In 2022, Creapaper made it into the Global Top 100 innovators of the US magazine RedHerring. If and when major paper mills find it is more expensive than conventional wood-based cellulose, hay may have had its day.
With a printable surface and an adhesive backing, according to Alasdair McEwen, Innovia’s global product manager, “These trays have to be labeled to not only help market the product on the shelf but to provide mandatory information like nutrition facts and recycling guidance. The print performance of the matte white coating means that the finished label and pack can give the brand a premium on-shelf appearance.”
The latest opinion poll published by the Institut für Wirtschaftsforschung shows rank pessimism caused mainly by insecurity about future prices for paper and other raw materials. FINAT’s Q4/2022 statistics reflect this, showing a 24% fall in labelstock deliveries to European converters, the steepest fall since records were started. As for paper and board as a whole in Europe, total production in 2022 was 6% down on the previous year, but imports were up, leaving total 2022 consumption unchanged. Cepi, which provides detailed paper and board statistics, attributes this poor performance to Europe’s economic slowdown and to rising energy costs.
A ray of hope
French businessmen enjoy a bit of economic gloom, particularly if they can blame the government for it. So, how to explain the noises of muffled contentment arising from this country’s label converters? Let’s start with stock levels. In mid-2022, everyone was worried about getting enough labelstock. Result: panic buying. Then UPM Raflatac came back on stream (but at a price – see below), and toward the end of the year converters’ warehouses were full to overflowing. The same thing was happening in other countries, and labelstock producers suddenly found their customers saying, “No thanks, we’ve got enough.”Hence the fourth quarter FINAT statistics, which record tonnage volumes shipped from mills. The French label association UNFEA tracks euro sales, and surprise surprise, last year was pretty jolly, particularly toward the end. Label sales over the year were up by 15%, which allowing for inflation still gives a real increase of at least 5-6%, enough to keep converters smiling. But how have converters managed to pass on hefty price increases?
Under the cloak of anonymity, a converter told your correspondent how it’s done. Brand owners and food manufacturers are playing the blame game, and some of the blame falls on packaging manufacturers. But while blaming Nestlé or Mars gets you prime-time headlines, blaming the packaging industry doesn’t because they’re not household names. An added advantage for labels, says the anonymous informer, is that the extra 15% on the price is too little for the brand owner to worry about. Could be true, sounds plausible.
An oily fog
Since January 2023, new French (not European!) legislation imposes restrictions on many oils used in making printing ink. This is part of a wider campaign to reduce or ban harmful chemicals. However, according to industry association Intergraf, the limits imposed by the new law are too strict, and the testing methods are too imprecise. This creates a cloud of judicial fog over the whole European printing industry, says Intergraf’s General Secretary Beatrice Klose, as it affects both inks made in France and cross-border trade. The French government has promised to look into the problem, urgently, just as soon as it has the time.UPM strikes a record
Not a record for the industrial action that stopped the Finnish paper giant for the early part of last year, but a surprising turnaround in results. Profits for 2022 were up by a staggering 42% over 2021. Sales were not far short of 12 billion euros, up 19%, with a particular success for UPM Raflatac and UPM Specialty Papers. CEO Jussi Pesonen comments fulsomely on these results, noting that the effects of destocking “were offset by declining input costs, especially energy costs, bringing about excellent Q4 earnings.”Sidel reaches over the Alps
Sooner or later, every label gets applied to a product. The Sidel Group, based in Le Havre, France, is a world leader in industrial bottle labeling machinery. It has 40,000 machines in operation in 190 countries worldwide, supported by 50 branch offices and depots. Now Sidel has acquired Italy’s Makro Labeling.With 120 employees, Makro is in the same business as Sidel but has been assured that it will continue as a separate entity within the group. Sidel is also burnishing its ecological credentials by opening up a new plant for PET recycling. “There is a big demand for recycled PET,” says Sidel’s packaging expert Naimi Boutroy, who adds, “But demand is outstripping supply.”
With perhaps just a tad of hyperbole, Sidel reckons its pilot r-PET line “…will also empower Sidel in shaping the packaging solutions of tomorrow.”
Fedrigoni picks up the pieces
When a well-respected brand name goes under, there is usually someone around to pick up the best pieces. ArjoWiggins is dead, but its Spanish Guarro Casas mill was snapped up by Fedrigoni. Now this same producer has acquired ArjoWiggins’ research center in Grenoble, France.This center is specialized in RFID and printed electronics, and Fedrigoni has acquired it lock, stock and barrel with a view of taking advantage of its patents and the expertise of its technicians, as well as cooperating with the local International Paper College. We can expect to see more of Fedrigoni as it expands its presence in the label market.
Anyone for grass?
Making paper from grass is not a brand-new idea, but Germany’s Creapapier has taken the technology one step further. Once harvested, the hay is air-dried and shredded, then pressed into pellets. According to the manufacturer, these can be used directly by any paper mill, needing no chemical treatment and providing a “green” alternative to chopping down trees. In 2022, Creapaper made it into the Global Top 100 innovators of the US magazine RedHerring. If and when major paper mills find it is more expensive than conventional wood-based cellulose, hay may have had its day.More news on linerless
Linerless labels have not yet fulfilled the promises of when they were first introduced, but the latest product launch from Britain’s Innovia could be a minor breakthrough. Its new white synthetic BOPP paper is designed for linerless labeling of plastic trays containing meat, fish and other foods.With a printable surface and an adhesive backing, according to Alasdair McEwen, Innovia’s global product manager, “These trays have to be labeled to not only help market the product on the shelf but to provide mandatory information like nutrition facts and recycling guidance. The print performance of the matte white coating means that the finished label and pack can give the brand a premium on-shelf appearance.”