Label materials business booming.

Author:Penhallow, John
Position:NARROW WEB Europe
 
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Between raw material price hikes and stagnant European demand, not many labelstock manufacturers are making really good money at the moment. Meet the exception: Henna, based in Germany, which has just announced record 2011 sales of [euro]237 million. Hernia also reported "a slight fall" in profits, but overall. according to CEO Thomas Baumgartnei, 2011 was "a record year." The company did it, what's more, by going against conventional wisdom on how to cope with an economic crisis. Cut investment? Hernia just completed a [euro]50 million investment program to make its plant the most modern in Europe. Reduce start? The company in 2011 went from 800 to 830 employees. Relocate production to lower-cost countries (almost everywhere is lower-cost than Germany)? Henna advertises the fact that its production is 100% in Germany. Its secret, if it can be called a secret, is its highly efficient production lines with low operating costs (that's what the [euro]50 million investment was for), and a range of special products like laser-activated face materials.

On the plastics side, another German company has been in the news. Klockner Pentaplast, which is controlled by US investor Blackstone, is building its first production plant in China: the new facility, in Suzhou, will initially make film for shrink labels. Klocknei, which has worldwide sales of over $1.3 billion and 3000 employees, is said to be financially overstretched, and recently asked its US parent for a fresh capital injection. At the time of writing this article, no definite reply had been received.

EASTERN PROMISE

The "other" half of Europe gets relatively little media coverage here in France, particularly during a run-up to a presidential election. But for anyone in the label or packaging business, Eastern and Central Europe is where the action is. Poland was the only country in Europe never to have been in recession over the past five years, and now that China is looking less like an El Dorado for brand owners seeking low-cost production sites, Poland could well be 2012's flavor of the year. Major international label converters like CCL and Skanem bought or built plants there a decade ago, and UPM Raflatac chose Poland for its coating plant, opened in November 2008.

Trade exhibitions have had a bad couple of years, but label shows seem to be pretty good bet, to judge by the success of the Labelexpo series in Brussels, Chicago and elsewhere. It is all the more surprising that the Moscow...

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