Some readers of recent Europe News articles have accused the hapless author of having a Cassandra syndrome, of always seeing the worst possible outcome for today’s sticky mess. This issue will try to concentrate on brighter visions, but it ain’t easy.

Let’s start with the world’s fourth biggest economy: Germany is still having a rough time. Having virtually abandoned nuclear power in favor of natural gas, mostly imported from Russia, it is confronted with the prospect of no more gas from that country (and somebody just blew up two of the undersea gas pipelines). To cap it all, Germany’s industry was heavily geared toward both the Russian and Chinese markets, now largely blocked by sanctions (Russia) or lockdowns and falling demand (China). The $100 billion that German firms exported to China last year is now only a fond memory. Ecological concerns loom large in German industries, and nowhere more than in the label and packaging sectors. But with exploding energy prices and supply shortages, the greening of German industry will have to wait.

The German Industrial Federation has described the situation as “toxic” due to a dramatic fall in output. Medium-sized companies (which comprises most label converters) in particular are struggling. Label converters cannot, in most cases, shift production to lower-cost countries, but at least they know much of their clientele will just have to swallow higher prices. If you want fast-track delivery for your labels, you don’t order them from the other side of the world – or even the other side of Europe.

Now let’s move up to the world’s third biggest economy: Japan was once just a distant land of smiles for Europe’s label business – and then the digital revolution arrived. From virtually nothing 15 years ago, Japanese print equipment manufacturers have been making up for lost time on European label markets. Konica, Toyo (inks), Miyakoshi, Brother (who bought Domino), Canon (which bought Océ and has just acquired UK’s Edale), and Epson are well-known suppliers in France and in major European countries.

Another well-known brand has plans to expand in Europe: Screen, which is shortly to move its European headquarters in Amsterdam to a nearby site five times larger. The company recently invited label converters from around Europe to a “Labelfest” to present its latest Truepress 350 UV SAI (SAI means please or thank you in Japanese). Discussions in French, Dutch, Portuguese, Turkish and a few others rose from the 40 or so converters present.
In addition to the L350UV SAI range, Screen also demonstrated its range of finishing equipment, developed in partnership with a leading European flexo press maker and marketed under the Refine brand. According to Screen, some 250 Truepress systems have so far been installed worldwide.

Russia was, until last year, a big and growing market for all kinds of printing equipment, but since February of this year there have been few reported sales, and even exporters legally allowed to export there despite the sanctions are having second thoughts, especially since some Western governments have suspended export credit guarantees on sales to Russia.

In addition, several major paper and packaging manufacturers, including Stora Enso, have shut down or sold their Russian plants. Russia is a net exporter of pulp – Germany alone imported 175,000 tons of cellulose from Russia in a typical year, according to “Die Papierindustrie,” the leading industrial association of the German pulp and paper industry. However, this scarcely registers given Germany’s total annual cellulose imports of 10 million tons.

Exit Arjo Wiggins

Older readers will recognize the Arjo Wiggins brand from its days of glory. Now it is experiencing what the poet Thomas Grey wrote: “The paths of glory lead but to the grave.” Well respected for its imaginative paper and packaging products, the group is down and out. Headquartered in Aberdeen (Scotland), ArjoWiggins has been hard hit by the effects of the pandemic, and the recent energy and cost crisis. As a result, the British sites (Stoneywood in Aberdeen and Chartham in Kent), and all the group’s commercial structures in the United Kingdom, were placed under trusteeship on September 22, 2022, as part of an insolvency proceeding. So far, investors have not been flocking to rescue this historic brand.

Flexo fights back

Alive to the threat from digital, flexo press makers have not been idle, and Nilpeter is one of the leaders in innovation. One of its most faithful customers is Color Label with no less than 10 Nilpeter flexo presses. This Danish converter will shortly replace two old FA-4200s with a new 8-color FA-17, complete with advanced equipment for extended content label printing.

CEO Erik Grønning calls these latest presses “a milestone for us towards digitizing flexo, giving us a wide range of new possibilities when it comes to automation of our in-house processes.”

Fighting back of a different sort has been Canon’s strategy, which might be called “If you can’t beat ‘em, buy ‘em.” Its latest acquisition is Edale, a well-known UK-based maker of flexo and hybrid label presses. The Océ brand, acquired by Canon several years ago and now marketed as Canon Production Printing, brought the Japan-based group into the competition for a share of the digital label/packaging press market. Italian converter Etica is the first in its country to install a Canon Labelstream 4000, an inkjet based configuration that also sports two flexo units.

Pierotti invests

As one of the biggest label converters in the South of France, Pierotti printed 43 million labels in the year to end July 2022. It has just finished installing an impressive lineup of finishing equipment, with two complete lines from the Japanese Horizon Corp., and other equipment from GM and Grafotronic. Pierotti’s printing units are screen printing, offset and digital. The strategy for this converter is to bring in-house certain manufacturing operations by increasing its production capacities and to develop its range of specialty products.

Sappi does too

Packaging and specialty paper manufacturer Sappi Europe will soon start producing moisture-resistant label papers at its plant in Gratkorn, Austria. Thanks to the central location of the Gratkorn production site, delivery times will be sped up, which will reduce environmental impact. 

The group clearly sees labels as its growth market: In mid-2021, Sappi expanded its non-wet strength wet glue label paper product portfolio, and in January 2022, this was followed by Parade Label SG, a high performance semi-gloss paper for pressure sensitive labels.

…and Mayr Melnhof (MM) presses on regardless

In a major European acquisition, Austria’s Mayr Melnhof has finalized its acquisition of Essentra, the British packaging group. Essentra has 21 packaging plants in US and in 10 European countries, and employs 3,500. The deal, reported as worth 364 million euros, will greatly strengthen MM’s position, particularly on secondary packaging for pharmaceuticals. MM’s latest half-yearly returns (to end June 2022) show worldwide sales of 2.2 billion euros, up by a staggering 72% over the previous year. Its EBITDA for the same half-year 2022 clocks in at 17%.

The All4Pack Paris show is back!

After four years of repeated cancellations, the All4Pack show will take place November 21-24 of this year. At the time of writing these lines, striking French workers have closed refineries and disrupted trains. This is, however, not what the show’s organizers were thinking of when they chose “Lead the Revolution” as this year’s theme.

With no European Labelexpo to compete with, the 1,100 listed exhibitors will include many leading manufacturers from the label field. Between 60,000 and 70,000 visitors are expected.

Cassandra constrained

With these few items of cheering news, your correspondent has tried to take your minds off the daunting economic and political perils hanging over Europe like the sword of Damocles. But don’t relax too soon – remember the snag with Cassandra’s baleful prophecies was that they generally turned out to be true!