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    Narrow Web Europe

    Suitable statistics

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    Nilpeter’s new production plant and demo center in Chennai, India.
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    French President Macron selects the PS stamps he likes best.
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    John Penhallow10.12.18
    We all know how Winston Churchill viewed statistics – “Lies, damned lies and statistics.” He, like some other heads of government, was not averse to picking out the statistics that suited him. But when European label association FINAT commissions its six-month survey of its members (carried out by an independent consultancy), there is at least a fair chance that the conclusions are valid. And those published by FINAT in August of this year bear out what many label converters have been thinking.

    The latest survey contains a special section on the evolution of digital printing, with the number of presses installed by every digital label press manufacturer for 2017. Last year for the first time, with nearly 300 digital press installations, more digital label presses than conventional ones were installed in Europe. The report also gives prices for digital presses: nearly 60% of digital presses sold into the European marketplace in 2017 were in the price range of €250,000 to €750,000. And 8% of installations were more than €1million (or around $1.17 million). Converters indicated that 2017 was a year of robust growth in end-user markets, in particular in beverage, automotive, consumer durables and industrial chemicals labels.

    Big Ink
    In 1837, Andrew Jackson had just been elected US president and the war with Mexico was raging as Americans started remembering the Alamo. In the same year, across the water in Germany, Siegwerk Company started making and selling inks. And 180 years later, they are still very much in business, with 5,000 employees and a presence in all the world’s major markets. This family-owned business is probably correct in claiming to be the world’s third biggest producer of inks, after Sun Chemical and Flint Group. It has grown internationally by a series of strategic acquisitions, including UK’s Hi-Tech, the Dutch producer Van Son and US-based Color Converting. In the narrow web segment, Siegwerk acquired a substantial part of Swiss-based Sicpa, then, in 2017, the UV coatings business from Schekolin, and this year the UV inkjet business from Agfa. Now, Siegwerk has made another transatlantic acquisition, buying up the Quebec-based Encres Ultra. The Canadian company focuses primarily on water-based flexo inks for narrow web and paper and board applications and should beef up Siegwerk’s market share, particularly in Quebec, Ontario and Canada’s maritime provinces.

    It looks as if the big three of narrow web ink producers are gaining market dominance. There are two main reasons for this, and they are not hard to find. Ink accounts for a tiny part of label converters’ raw materials, but the potential damage done by using an inferior ink (particularly for food labels) is something to keep the converter awake at nights. So why buy inks from Joe-down-the-road, even if he is 10% cheaper? The second reason for concentration in the ink business is technology. Developing a new ink needs an R&D division with deep pockets, something that smaller producers find hard to match. A whole new world of expertise has been born out of the different drying/curing properties of label inks, from hot air through UV to LED and electron beam.

    Nilpeter Goes East
    If the label ink manufacturing sector is growing more concentrated, the same does not seem to be true for label press manufacturers. Yes, there have been a few mergers, but most of the leading makers of conventional label presses have been around for over 20 years, and some go right back to the invention of the PS label. On the digital press side, the threatened rash of mergers and bankruptcies has also not happened, or not yet. One of the logic-defeating success stories is that of Nilpeter. How can a label press maker with scarcely any home market, and very high local wage costs, survive in a cutthroat world? By subcontracting its production to low-cost countries? Nilpeter insists that all its production, even the metal bashing, is done at its Slagelse, Denmark  headquarters, and what’s more it has an active social commitment to the welfare of its staff. Part of the answer lies in its highly capital-intensive production, and part in the skill and devotion of its workforce. Due credit must also go to strategy decisions in 2001 to open a production facility in Cincinnati, OH to serve the North American market and six years later a plant in Saõ Paolo, Brazil. This year, Nilpeter opened a new production plant and demo center in Chennai, India. This factory will serve label converters throughout the Middle East and the Indian subcontinent. But not only these regions. “With the new facility and the corporate decision to move all FB-Line production to India,” says Alan Barretto, Nilpeter India’s managing director, “We expect to supply more presses to Europe and the Americas in the near future.” This move reflects the rising quality of Indian workmanship. It is also – just possibly – the acknowledgement that labor costs in Chennai are, after all, much, much lower than in Denmark.

    …And Edale Looks East And West
    UK-based label press manufacturer Edale has been in the news recently, with the sale of a 10-color FL3 flexo press to India’s Uflex. This proves that it is still possible (though difficult) to sell Western-made flexo technology into the very price-conscious Indian market where imported used presses can be bought at knockdown prices. Edale’s success may be partly due to the fact that this was a customized press to produce security labels. According to Edale’s recently appointed sales manager Darren Pickford, “It was important for Uflex to find a solution that would deliver sustained quality and ensure high reliability. Edale’s unique experience in vacuum collating conveyors was a huge benefit when the client was making a selection.”

    Edale has also been successfully selling its equipment in North America, with several FL3s delivered in 2017. Some of these were the Graphium hybrid model, sold in partnership with Fujifilm North America. In September 2018, Edale decided to appoint Fujifilm as its distributor for all its North and South American markets. This comes as no surprise as Fujifilm Specialty Ink Systems in the UK was one of the original partners, with Edale, in the development of the Graphium hybrid press. Joining forces with Fujifilm means that Edale can now expand its offering to include Fujifilm’s range of inks, plates, LED curing and imprinting technologies as part of a total package. This was on demo at Labelexpo Americas, where Edale exhibited at the Fujifilm booth.

    No More Turkish Delight
    Not two months ago your correspondent spoke to a leading Turkish label converter to ask how he was coping with the problems of the Turkish economy. “Problems? What problems?” he replied. The answer to that question is becoming increasingly obvious, with Turkish inflation hovering around 18% and with a currency that has lost 40% of its value so far this year. While the slide of the Turkish lira could bolster exports, companies who bought equipment (like label presses) on credit are feeling the noose tightening as local banks charge rates of over 30%. The worst off are those who thought they were on to a good thing borrowing euros or dollars at near-zero interest rates, and who now find themselves being taken for a ride to a very hot Turkish bath.

    Now We Start To Know How It Will Feel
    The emperor Nero, we are told, fiddled while Rome burned. London is not burning, but the burning issue of Brexit, two years after the referendum, seems no closer to being resolved. Supply chains in North America are being shaken by the sudden imposition of tariffs. In Britain,  political deadlock still paralyzes Theresa May’s ruling coalition, the Irish Border Question is unresolved, and the cliff-edge deadline of  March 29, 2019 gets nearer and nearer. If by that date there is no agreement between the UK and the rest of the European Union, nobody knows what will happen. One business that has felt which way the wind is blowing is RotoMetrics, maker of rotary dies, a US-based company with European headquarters in England. Your correspondent questioned them on their plans for post-Brexit and was told that the group’s European HQ and main production plant would shortly be transferred to Germany. This sort of move will not, of course, solve every problem, as supply chains will continue to crisscross the English Channel whatever the politicians decide or fail to decide. They will just be slower. And cost more.

    The Stamp Of Authority
    Being president of France has its pleasant and less pleasant duties, but one of Monsieur Macron’s more pleasant ones must have been his recent visit to Boulazac in the Périgord, a region well known for its truffles, wines and British expatriates. But President Macron’s destination did not involve any of these, but was to the Imprimerie de la Poste, which prints all of France’s (pressure sensitive) postage stamps. American stamps used to portray past presidents (maybe they still do), but France’s show an attractive young lady called Marianne, who is the symbol of the French Republic. The stamps are redesigned regularly, often with Miss France winners serving as models. The president then has the pleasant duty of selecting the one he likes most (the design, not the lady) and the Imprimerie de la Poste sets to work printing them. This state-owned printing company has 450 employees, which must make it one of France’s biggest. With postal business declining every year, some people may wonder what they all do. Ah well, maybe philately will get you anywhere.
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