Time was, men were men and labels were labels. You knew where you were then. If you were a pressure sensitive label converter, you made PS labels. Period. And if you were a label press manufacturer, you made special presses that were quite different from the ones used to print boxes, packs, headed notepaper or copies of the Washington Post.

Now come with me and read what Lisa Milburn, the boss of Labelexpo, has to say about this year’s show in Brussels. “With 53% of our exhibitors showing products for flexible packaging and 32% featuring products for folding cartons, Labelexpo Europe offers the most extensive showcase of package printing solutions.”  Yes, you read right, less than half the exhibitors at this year’s show will be aiming their products solely at the label business. This is not the first time that the show’s organizers have tried to branch out. A couple of decades ago, there was a rapprochement with the Business Forms sector, then the internet came along and reduced business forms to museum pieces. Then it was the wet label business, which, though declining slightly, is still a huge industry. This should have worked well for Labelexpo, but for some reason it didn’t. Heidelberg, for example, never exhibited, and neither did other big machine manufacturers catering to the wet glue label sector. So this year, the show’s shop window majors on flexible packaging and cartons. It’s a logical strategy given that, in volume terms, these packaging sectors are ten times bigger than the PS label business (as a strategy it does however bring Labelexpo up against other established shows like Interpack and Fachpack).

Several of Europe’s leading narrow web press makers have long had a foot in the package print business. Omet’s flexo/offset press, launched at Labelexpo 2013 and to be presented again this year, is described by sales director Marco Calcagni as “the ideal bridge between label printing and packaging printing, mixing offset’s quality with flexo’s flexibility,” and able to print and convert flexible packaging, shrink sleeves and IML labels as well as pressure sensitives. This Italian press manufacturer is no newcomer to the world of packaging. Some years ago, Omet sold what was then, and maybe still is, the world’s largest press, which is still producing packs for the Chinese tobacco industry. Omet is clearly in bullish mode, having sold ten presses in Italy alone since January of this year and with yet another year of double-digit sales growth predicted for 2015. Nor is it the only one to trumpet rising sales. Germany’s Krones, for whom labels and beverage labeling equipment is an important part of the production, just announced a first half-year sales growth of 4.8% year-on-year, with profitability up to just a smidgen under 7%. Heidelberg, which has now moved closer to the label business with its acquisition of a majority stake in Gallus, reported increased sales and profits for April-June 2015 of 29% and over 750% (EBITDA) respectively! Another newcomer to the narrow web business, KBA, has less to laugh about so far, with first half-year sales 18% down at €427 million ($480 million) and a pre-tax loss of €11 million, but order books are said to be healthy. KBA’s subsidiary KBA Meprint AG will be exhibiting at Labelexpo with its wet-offset label press.

Happy Sappi
Most of the substrate producers exhibiting at Labelexpo will be the old favorites, but there will be at least one newcomer: the paper and

pulp producer Sappi. This Johannesburg-based group produces 3.6 million tons of paper at its seven European mills, and has recently converted one of its paper machines to producing specialty grades, and in particular label face papers and release liners. Commenting on this investment, Thomas Kratochwill, Sappi’s sales and marketing manager for specialty grades, says, “This conversion, costing nearly $70 million, puts us in a good position cost-wise to develop our business in the expanding label and package paper business, and in particular, to supply specialty papers in smaller quantities to suit today’s low inventory, fast-delivery requirements.” At present, only Sappi’s mill in Alfeld, Germany, is making these specialties, but similar conversions are planned for the group’s mills in Maastricht (Holland) and Ehingen (Germany). At Labelexpo Europe, Sappi Specialty Papers will be highlighting its Algro Sol line of silicone-base papers featuring low silicone consumption, 25% lower than other standard liners, according to the manufacturer. If this figure of 25% is to be believed, it could be a game-changer for the release liner market, troubled as it is by rising silicone prices. And Sappi, by the way, will also be exhibiting simultaneously at Fachpack.

France: some news good, some bad
Every summer, a small group of experts (headed by your correspondent) takes the temperature of the top 100 French label converters and analyzes what is going on in the market. This year, the key word is concentration, as four or five major groups expand their market share, mainly by acquisition. With many entrepreneurs in the label sector reaching retirement age, the field is open, and the three market leaders Autajon, Stratus and the US-based Multi-Color, now account for between 20 and 25% of the total French PS label market. Profitability generally is looking up, with 30% of companies showing pre-tax profits in excess of 5% of sales (better than last year and the year before). Surprisingly, there seems to be little or no correlation between size and profitability, with both small and large firms figuring in the top profitability bracket. When it comes to employment, the picture is less encouraging. While productivity is up, employment numbers are slightly down. This is bad news for a country where unemployment seems to be stuck at around 10.5% of the workforce, and where President Hollande has pinned his reputation (and his decision to stand for re-election in 2017) on “inverting the curve” of France’s ever-rising unemployment. Your correspondent is burning to give Monsieur Hollande some great ideas, but so far his advice has not been sought.

Poland: some news good, some better
Here’s a little quiz for you: which European countries are doing best in terms of industrial production? Forget Greece, forget Russia (both over 4% down year on the year). The unlikely winners this summer are Norway (up 5%), and Poland, which tops the charts with +7.6% growth in industrial production, combined with 3.7% annual growth in GDP.

To find out how this good economic news is affecting the Polish label industry, your correspondent spoke to Tomasz Dabrowski, president of KDS, a label converter near Warsaw. With sales of around $7 million and 120 employees, KDS is a force to be reckoned with, both inside and outside Poland. The first question asked was how Poland’s economy can be in such good shape despite the embargo on trade with Russia and the disastrous situation in the Ukraine. “Poland never exported much processed food or other consumer items to its Eastern neighbors,” he explains. “It was mostly grain, apples and things that don’t need much packaging, so our label and packaging sector was not too badly hit. I don’t have any exact figures but I would say the Polish label sector is still growing at around 20% per year, which isn’t bad, all things considered. We Poles are like the Dutch, we’re good at making things, but we’re even better at commerce.” And can small and medium-sized firms in Poland get finance for their investments? “This year, Polish companies, and notably those in the print or packaging sectors, can still get European Union funding for their investments, but this facility will probably come to an end soon,” he says. “That’s part of the reason why there is so much new machinery being installed at the moment. Last year, KDS installed its fourth narrow web press – a 330mm Mark Andy with LED drying. And by the way, we were the first label converter in Europe to install an LED-UV unit. Since then, we have installed a booklet machine, and we’re looking to expand our production more into the package printing business.” He will be going to Labelexpo – of course.

Ease of doing business
The World Bank’s ranking of 189 countries, according to their business-friendliness, is a useful guide for potential investors. Down at the sludge end of the table you find the usual trigger-happy African and middle-Eastern lot. European countries mostly score well, apart from Greece (no surprise) and, curiously, Luxembourg (too many dodgy bankers?). If you prefer to deal only with squeaky-clean countries, then go for Denmark or Norway, both ranking higher than the USA, or UK and Germany, both well placed. It is an interesting fact that with few exceptions, the further north you go in Europe, the more business-friendly the environment. We must leave climatologists to mull over that one.

An unfortunate clash
Labelexpo Europe’s new emphasis is at least partly on package printing, and it is unfortunate that the Brussels event clashes with Fachpack, now one of Europe’s biggest packaging shows. With 1,500 exhibitors, this rapidly growing exhibition in Nuremberg also has a lot to say about labels. Autajon and Rako, respectively the leading label converters in France and Germany, are among the 100 or so label converters exhibiting at the Nuremberg show. Okay, so there’s not too much overlap with Labelexpo, but maybe next time around the organizers could try to schedule things better.

Money for old wine
According to the London-based website Wine Searcher, France’s Burgundy region still tops the world rankings for the most expensive wines. This year’s number one is an Henri Jayer Richebourg Grand Cru, selling at anything from $15,200 to a mind-blowing $23,900 a bottle. Number two in the listing, also a burgundy, is the famous Domaine de la Romanée-Conti, which can be had for a mere $13,400. Of the ten priciest wines listed by Wine Searcher, eight were French and two were German. The most expensive US wine, a Napa Valley Cabernet Sauvignon, hit the charts at number 14. The growers aren’t saying who supplies their labels, but you can bet that wines like these come with some pretty hefty security features. Nobody wants to pay that sort of money and then find the contents are only good enough to pour over your Coq au Vin.