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    Features

    Latin America’s Label Market

    Competition and emerging print technologies define this region.

    Latin America’s Label Market
    UPM Raflatac participated in a reforestation project of Brazil’s Jaguari River.
    Latin America’s Label Market
    ACOBAN meets with Channeled Resources in Monterrey.
    Latin America’s Label Market
    Etirama hopes its equipment will reach 80% of Latin America.
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    Greg Hrinya, Associate Editor03.13.17
    The competitive label market in Latin America is far-reaching and incorporates a multitude of technologies and sustainable initiatives. Like other markets around the globe, Latin America has been growing, although it is more robust in some areas compared to others, where financial struggles play a role.

    Many of the industry’s prominent North American suppliers and manufacturers maintain a stronghold in Latin America, designed to capitalize on the latest trends. Some countries are more prosperous than others, however, and businesses must contend with varying economies in the region. Brazil, Argentina, Mexico and Colombia boast some of the area’s largest economies, which contribute to their growth. Other countries are growing, but at a slower rate.

    Views differ, though, as some areas of Latin America are struggling due to a strong US dollar and a high cost of borrowing money. Mark Andy finds that many companies are retrofitting existing equipment to help support demand, but it finds that this is not a sustainable long-term solution. Mark Andy’s retrofits are being used to print specialty labels, including extended content and multi-web printing.

    According to Rick Clendenning, president and CEO of INX International Ink Co., printed packaging and label sales in Latin America were valued at approximately $24.50 billion for the full year 2015. That figure represents an increase of 2.3% versus 2014. Sales, meanwhile, are expected to grow by 2.0% annually at constant terms through to 2020, reaching $27.09 billion.

    There is the expectation that the Latin American label market will stabilize in the countries that have been affected by political instability and fluctuating commodity prices. The parts of Latin America that are growing do so at a small rate. According to ACOBAN, the Mexican Association of Label Converters and Narrow Web, the label market varies quite a bit among South America, Central America and Mexico.

    Latin America is not limited to one type of printing technology either. “The strongest trend that we have started to notice is digital printing,” says ACOBAN president Gerardo Gonzalez, who is also the commercial director for EtiPrint. “Without a doubt, you’ll probably find at least one digital press in a medium to large company. Another trend we’ve come to see is that many companies tend to have a large variety of presses. This forces many companies to be up to date with new and better machines in order to provide better service to both their clients and potential clients.”

    “The flexo market has witnessed noticeable interest and growth in the packaging segment, with many of our customers requesting support with shrink films, thin films, in-mold labeling and flexible packaging applications,” says John Cavey, Latin American sales manager at Mark Andy. “Shorter runs with more SKUs are causing customers to look more closely at entry-level digital solutions like the Mark Andy Digital One press or the Digital +3600 (Colordyne) retrofit.”

    UPM Raflatac finds that the region is seeing more demand for wine and beverage labels, specifically. “You are seeing more of a demand for ‘fancy’ labels to help bottles stand out on shelves and gain consumer attention,” says Jose Garcia, area sales director and general manager, Mexico, Central America, Caribbean, UPM Raflatac. “Digital printing is growing quickly, and as there are more price reductions we will continue to see more of this.”

    INX International sees films and PS materials gaining share in the future. “Opportunities in pressure sensitive labels and sleeving technologies exist, and in-mold labeling is growing as well,” he says. “Overall, the use of film in label formats is increasing at a faster rate than paper materials, not only in pressures sensitive primary product labeling, but also in hot-melt wraparound glue-applied labels, sleeve labels and in in-mold labels.”

    According to Esko, more converters are trying to bring plate engraving solutions like CTP platemaking in house. This can help avoid the costs associated with outsourcing, transportation of plates from the trade shop to the printer, and associated delay times.

    While flexo is still the leading technology, digital printing is more prevalent in certain regions. “In the label market, the most popular technology is flexography. Obviously, in some specific markets, digital printing is also used – for example, in vineyard regions like Argentina, Chile and Southern Brazil,” explains Ronnie Schroter, commercial and marketing director at Etirama, a Brazilian press manufacturer.

    Schroter adds that UV drying in the flexo process is popular but still growing as companies migrate from water to UV inks. “The Latin American market has always been characterized by big label converters with state-of-the art equipment, plus many small and medium companies,” he says. “A big part of those small converters with more simple machines like central drum presses or old-style modular presses are often bought as second hand machines.”

    Latin American converters are seeking newer machines that operate at faster speeds and lower setup costs. Etirama has noticed an increased demand for modular flexo presses with UV dryers between the print stations. While this trend has existed in Europe for some time, it is gradually making its mark in Latin America.

    According to ACOBAN, the number one technology in Mexico is water-based flexo, which is followed by UV flexo. Digital printing, while not at the same levels as traditional presses, is growing rapidly and has a larger presence than silkscreen printing, which tends to occur in smaller markets.

    Esko finds that automated technologies are taking more of a hold in the Latin American market. This allows converters to keep up with a large number of jobs, the speed of the presses, and to carefully eliminate errors. Expanded gamut printing is also gaining traction in Latin America. “By expanding the breadth of colors available on press, most Pantone colors can be faithfully reproduced and separations and graphics can be more brilliant and powerful,” says Marcos Cardinale, marketing manager, Latin America, Esko. “However, the real reason why printers are thinking of installing expanded gamut is due to an economic story. By printing with the same inks for every job, print units do not have to be cleaned, make-readies are much faster, and different jobs with different colors can be combined on the same sheet. Work is printed faster. Inventories can be kept to a minimum.”

    Companies have taken measures to ensure their success in Latin America, and these initiatives are further strengthened by the presence of associations like ACOBAN. The organization is comprised of label converters, industrial organizations, educators and suppliers within the industry. ACOBAN is designed to strengthen the Mexican label market, making it more competitive. “Instead of hurting the industry and putting up barriers, the idea is to find strategic ways to help one another grow and give ourselves the opportunity to compete with other countries,” explains Gonzalez. “In Latin America, we’d like to open our opportunities to communicating with other associations and create more knowledge about our association with other label companies.”

    The members of the association must be able to make a commitment to maintain a high and acceptable level of training, technology and human relations for its member companies.
    Major North American suppliers like Etirama, Esko, Mark Andy, Nilpeter, and UPM Raflatac have made significant investments in the region.

    Etirama has undergone a transformation in the last five years. The company has stopped manufacturing smaller modular flexo presses and has since shifted its focus to modular flexo presses with higher quality.

    “The market realized that with an Etirama machine, it is possible to produce the same label as a North American or European machine with the same quality and the same setup cost,” says Schroter. “A big advantage is Etirama equipment costs less than the half of its North American or European competitors. The proximity of countries, in particular within South America, makes it much easier to provide technical support and to send spare parts.”

    Mark Andy boasts a team of distributors and agents in Latin American, many of whom have full service and support capabilities to quickly manage customer requests in the area. The company also sells directly to Mexico and Central America, with localized support for consumables and aftermarket services in Mexico.

    Nilpeter has a solid presence in the region with its main base in Brazil, and regional sales and service offices in Colombia, Peru, Chile, Argentina, and Central America. “Our philosophy is to be global and still remain local to be close to our customers and provide service and consultancy on site with solid knowledge of local challenges and access to networks,” says Jesper Jorgensen, global sales manager at Nilpeter.

    Nilpeter has placed concentrated efforts on building its organization in Latin America over the last 25 years. According to Jorgensen, the company has cultivated relationships with a multitude of label producers. He adds that Nilpeter’s supply of printing presses to the various markets in Latin America continues “unabated.”  

    UPM Raflatac, meanwhile, offers a wide array of substrates to the region, including semi-gloss, transfer, direct thermal, films and specific faces for the wine and beverage segment. The substrate supplier estimates a 7% market share in South America and 18% in Mexico, although the latter is harder to quantify. UPM Raflatac operates two terminals in Mexico (Mexico City and Guadalajara) and a terminal in both Brazil and Argentina.

    ACOBAN notes that Mexico has three to four large American companies with plants, in addition to various prime label plants. “The competition can become a little bit more complicated in Mexico because we’ve seen more and more industries moving from the US to Mexico, bringing larger label competitors,” says Gonzalez. “This isn’t the same case for South America. Not many plants have become established in South America, so we tend to see a bit more national product consumption and a bit of foreign investment.”

    With the United States’ new president taking office in January, the region is taking a wait-and-see approach in regards to how the shifting political state will affect its business. The United States’ relationship with Mexico could impact the rest of the Latin American market.

    “Right now, we find that Mexico’s future is in question and unsure,” says Gonzalez. “We have an incredible tie with the US, and because the new president just stepped into office, we are still waiting and watching to see how things turn out for us. Most of us hope that by May we might have a better understanding of how things will turn out. As for now, many investments are on hold because of the unclear path that might be taken in the next few months.”

    Gonzalez adds that if Mexico’s relationship with the United States deteriorates, South American companies might view Mexico as an important business partner.

    Industry Events
    To accommodate the industry’s economic growth, the label and packaging industry takes part in a number of Latin American events. Label Summit Latin America, Label LatinoAmerica, and Plastico Brasil are all scheduled for 2017.

    Label Summit Latin America will take place on May 16-17 in Santiago, Chile. The event is designed for label converters, package printers and manufacturers, and it will take place in Chile for the first time. The two-day tabletop exhibition is expected to attract more than 70 manufacturers and suppliers.

    Etirama is using Plastico Brasil to launch its new press line,  the E-Series, in 2017. The event will take place from March 20-24 in Sao Paulo. The company will also be present at Label LatinoAmerica, displaying its new technologies, and, in fact, will exhibit at Labelexpo Europe later in the year.

    “The new line has a more modern printing system, which we call Easy Concept, in which the printing pre-register is electronic and automatic, the setup is much faster and the equipment can produce adhesive labels, as well as shrink labels,” says Etirama’s Schroter. Etirama will continue to sell its traditional line of equipment, which includes Fit, SuperPrint and Evo.

    Etirama hosts educational and promotional events to help achieve its goals within the region. In addition to Brzil, the company is organizing several technical events in the region, ranging from Peru and Colombia to Argentina. The events will boast the theme, “Innovation.”

    Booming Brazil
    Brazil is widely recognized as the leading Latin American label and packaging market.

    According to Maurício Médici, general manager, UPM Raflatac Brazil, the label market in Brazil represents half the size of South America (650M/m2 year). “The pressure sensitive material market historically grows 2.5 times the GDP, but it has had some retraction during recent years due to the economic and political crisis. We are optimistic about this year and our target is to grow 38%.

    Etirama is a leader in the Brazilian market for flexo presses, with approximately 80% of market share, the company says. According to Schroter, Etirama has 49 installed machines in Latin American, excluding Brazil, where more than 100 machines have been installed in the same period.  “Our project for 2017 is to be more bold when it comes marketing – we intend to reach 80% market share, like we do in the Brazilian market,” says Schroter.

    INX International Ink Co. is invested heavily in the region, having recently acquired leading Brazlian ink company Creative Industria e Comercio Ltda. CEO Clendenning says, “Our Latin American and Caribbean activities until recently were executed solely through distributors directly working with the North American group. Distributors include sales, service and in certain instances manufacturing capabilities,” says Clendenning. “INX’s strategy is to establish a physical presence in South America with a focus on the packaging ink market, which will give Brazilian customers access to world class technologies.”
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