Violent exchange rate fluctuations have been rare in recent years. This year looks like the exception. In late January, and to general surprise, the Swiss Central Bank stopped intervening to hold down the value of the Swiss franc. Within minutes, the currency rose by 30% against the euro and almost as much against the dollar, throwing markets into confusion. The whole Swiss tourist industry was up in arms, followed by the manufacturing and exporting sector. Even the London Economist, rarely short of an epithet, described the normally unflappable Swiss population as “discombobulated.” Your correspondent called Gallus, the narrow web press manufacturer, whose production is almost entirely in Switzerland. “No, we are not making plans to shift production abroad,” said marketing manager Matthias Marx. “But we, along with the whole Swiss industry, are very concerned.”  The only people to profit are those lucky few who have managed to stash their wealth (legally) in Swiss francs and who at this time of the year can be seen laughing all the way to the ski resorts.

If Swiss currency policy has been a shot in the foot for its own industry, the gradual slide of the Euro against the dollar has been a shot in the arm for Euro-zone exporters. Eric Hoendervangers, boss of the Dutch label press manufacturer MPS, did not mince his words: “Does the weaker Euro help our American exports? It surely does – all our presses got 20% cheaper! And the US market (led by you know who) is very price sensitive.”

For very different reasons, another European country is having an exchange rate crisis, and doing it rather publicly. The Russian ruble has lost a quarter of its value against the dollar over the last five months. The causes are political (Ukraine, sanctions) and economic (plummeting oil prices). The effects are inflation, insecurity and hoarding – supermarket shelves are being emptied in a way not seen since the break-up of the Soviet Union back in the late 1980s. Western companies established in Russia, like Avery Dennison and CCL, should in theory profit from import substitution, as Russian manufacturers of foodstuffs, health care etc., expand production to take up the slack. But the Russian economy, particularly the farming and industrial sectors, is notoriously inflexible, and it will be a while before it can catch up. In the meantime, products (and spare parts) still need to be imported and paid for in dollars, hence the rising inflation.

Not everybody is holding back from involvement in Russia. Japan’s Sato has just recently announced that it has acquired a 75% holding in Okil, a St. Petersburg-based converter claiming a 15% share of the Russian PS label market. Okil has been a Russian success story, with a second production plant in Moscow and sales offices in five other Russian cities. Sales topped $50 million in 2013, on the back of a Russian label market that was for several years growing in double figures. For Sato, this investment will consolidate the company’s presence in Russia as part of its strategy to be a global supplier of labels, marking and security systems, according to CEO Kaz Matsuyama.

Organizers of the major Russian packaging machinery show Upakovka, held in Moscow in late January of this year, were anxious to play up positive aspects of the event – 19,000 visitors and 950 exhibitors makes it still a major show. However there was no getting away from the fact that Russian packaging and label producers can no longer raise money to invest in new plants. According to a survey of the (German) Association of Food Processing and Packaging Machinery in October 2014, 70 % of their members “…experienced massive impacts of the Russian crisis on their business with incoming requests and orders substantially declining and projects being postponed.”

The country at the center of the crisis is of course Ukraine, where many FMCG manufacturers set up production in the first decade of this century. Ukraine, once seen as a stepping-stone to the much larger Russian label market is now more of a millstone. Several Western label converters are present in Ukraine, but few must be as unfortunate at Austria’s Marzek Etiketten. In 2009 the group set up a plant in Dnepropetrovsk, pretty much on the present front like between the warring factions. Your correspondent questioned Marzek’s area sales manager Markus Huber during his recent visit to Paris. “We don’t have much recent information from our Ukrainian plant,” he admitted, adding, “And I don’t think any of us is keen to go over and find out.”

Italian flair
Not all label press sales get recorded in L&NW. Looking back over the past six months we can see solid sales successes by one Italian press maker, Nuova Gidue. Back from a near-death experience some eight years ago (hence the Nuova tacked on to the original name), this family-run business is still headed up by Federico D’Annunzio, the short but ebullient CEO and his wife Cristina. Turkey has been a particularly good market for Gidue, with several presses sold in late 2014. Other successful sales operations have placed Gidue presses in Jordan and India. Already in 2015, Gidue has reported sales in Russia, Portugal, China, France and Italy.

The East is digital
It has been over a year since UK’s Dantex started marketing the Screen digital label press in Europe, with an investment in two demo centers (in UK and Germany) and a serious marketing effort to gain entry into a very crowded market. Last year came the first success when Germany’s LabelPrint24 installed Europe’s first press from this Japanese manufacturer, formerly called Dainippon Screen. Now comes news that a British label converter, Limpet Labels, has installed a Screen Truepress to run alongside its Xeikon 3000 and its flexo label presses. This comes after, and maybe because of, the European Digital Press Association’s competition which voted the Screen Truepress Jet L350UV digital press “Best Label Printing Solution” in its 2014 Awards competition. As a serious contender for a slice of the European digital label press market, Screen can now take its place alongside Mimaki, Konica Minolta and other Japanese manufacturers. The East may no longer be quite so red, but it is certainly going digital.

Label shows past and future
For most people, label shows mean Labelexpo, and of course the major event in Europe this year is the Big Show in Brussels in September. But two other shows in the month of February saw label professionals of all stripes congregating. One of them was Label&Print 2015, which took place in Birmingham (ours, not yours). The show, organized by Easyfairs, specializes in low-cost, no-frills events. They announced Label&Print as a sell-out, with around 300 exhibitors, including most of the leading UK label converters. Also exhibiting were digital label press manufacturers Domino, FFEI, Durst, Xeikon and HP, but the show’s visitors were likely overwhelmingly brand owners and other end users, so not a direct challenge to the Big Show in Brussels.

Pharmapack in Paris last week had plenty of innovative products to interest the label converter or end user. Avery and UPM Raflatac both exhibited to promote their specialty security and anti-counterfeit label materials. Other materials suppliers at the show included Stora Enso with a new PET-coated cartonboard, and Gascogne with its wide range of liners, films and packaging materials for the pharmaceutical sector. Schreiner MediPharm, a regular exhibitor at Pharmapack shows, presented its “Flexi-cap” tamper-evident closure system and its “Autoinjector” labels. Fellow German Schäfer Etiketten, a first-time exhibitor at Pharmapack, seemed to be attracting fewer visitors, but these things take time for a company which is a household word in its home market but less well-known on the wider European stage. No such problem for August Faller, a Germany-based but internationally present packaging and label converter specializing in pharma, or for its French rival Autajon. From Austria, Securikett showed combined authentication and tamper-evident label closures. The Belgian group Reynders has four production sites, one in India and the others in Europe, and its Pharma division is expanding fast and profitably according to divisional manager Max Raaf. Hologram Industries, as its name does not suggest, is a 100% Franco-French company (and a regular exhibitor at Pharmapack Paris). It bills itself modestly as the global leader in security and track-and-trace solutions for everything from wine to banknotes. Other French label converters exhibiting at the show included Stratus, APE, CGP-EtiqRoll and Azur Adhésifs. Few American companies took part in the Paris show. They are no doubt keeping their powder dry for the US Pharmapack scheduled for June 2015 in New York. And on a lighter note, visitors planning to attend the US show should not use the world map as shown by Pharmapack in its publicity, which places New York in Northern Florida!