Few people would quarrel with the word exponential to describe the rise in the number of manufacturers offering narrow web digital presses. At the Labelexpo show in Brussels in 2003 there were just three companies making them. By last year there were 20, including many from the USA and Japan. Today there are closer to 30 in Europe alone.

Among the least talked about is probably Heidelberg. The German print machinery giant has only put its toe into digital printing so far, through its Linoprint division. Its latest brainchild is DriveLine B, a standalone digital press said to be “especially suited for printing on foils and labels.” The technology is drop-on-demand inkjet, and according to the supplier, the print system can be rapidly adjusted to run a wide range of substrates, including stretchable and temperature sensitive ones.

With so much digital ink technology hemmed in by patents, Heidelberg has decided to go it alone, and during the recent IPEX show in England, signed a technical cooperation agreement with fellow German Pelikan covering the development of inkjet inks. Two DriveLine B’s were sold in 2009, says the company, which claims that in total-cost-of-ownership terms, runs up to 280,000 labels are more economically run on a DriveLine than on a conventional flexo press.

So far, little publicity has been given to this development in Heidelberg’s business model – possibly because so many other parts of the model were in danger of falling apart last year – but now the patient seems to be out of the danger zone. Heidelberg dwarfs all the other manufacturers of narrow web digital presses (except HP) and if it decides to enter the digital arena in a big way there could be a major redistribution of market shares.

Wherever you look, the digital label printing sector is bubbling with new ideas. The paper and packaging group Mondi has teamed up with Belgium’s Xeikon to develop Mondi Transferpaper Xeikon 62. Until now it has been difficult to decorate pails, paint pots and similar-sized containers in small volumes. Now the images and texts can be printed on a Xeikon digital press using the new transfer paper, then the roll is fed into a “Digital Decorating System” which transfers the printed image by heat transfer to the pails or containers. “No additional pre-treatment or glue coating is required, and the result is an exceptional high-quality digitally printed image with extremely high durability.” says Philip Weymans, Xeikon’s business development manager.

Pulling the supply chain
Now that the mood among Europe’s label converters is getting rosier along with their sales, another problem is lurking in the wings. During the recession, several manufacturers of paper, film and ink reduced capacity and ran down stocks. Now that their order books are filling up again, they cannot always deliver, and where they can, the prices are frequently higher. This is particularly true of wood pulp, and of the petrochemical feedstocks that go into synthetic films. For converters in the 15 Eurozone countries, the price problem is magnified by the falling value of the euro, since certain raw materials are priced in dollars. Flint Group, for example, a major supplier of label inks, is to raise prices to its European customers by between 6 and 7 percent in mid-July.

Pharma labeling
The Great and the Good of Europe’s pharmaceutical industry will be meeting in Germany in September forthe Pharma Packaging and Labeling conference. Speakers at the event will discuss security and anti-counterfeit labeling with RFID or datamatrix bar codes, track-and-trace technology, and Braille marking (soon to become compulsory on all drugs sold in Europe).

Sponsors of the event include label specialists Schreiner Medipharm and CCL Label, and also, perhaps more surprising, Avery Dennison and UPM Raflatac. This seems to support the view that labelstock suppliers are increasingly reaching out to the label end users who are the customers of their customers.

All are not equal
It has been said that all the world’s labelstock manufacturers were equally hit by the downturn of 2009, but some were definitely less equal than others. Finland’s UPM Kymmene lost the bagatelle of €158 million in the first quarter of 2009 alone, and was forced to cut back on capacity and jobs. That in turn caused strikes at several of its plants (the group makes pulp and many different papers, as well as labelstock). Reporting on first quarter 2010 results, UPM’s top manager Jussi Pesonen was guardedly optimistic as he reported a €70 million profit in Q1 of this year, despite continuing labor unrest at certain plants.

With total sales last year of just under €200 million (±$245 million), Herma (which makes labelstock, labels and labeling equipment) is only a fraction the size of UPM Kymmene and other world market leaders. What’s more, this German manufacturer invested massively in new coating capacity in 2008, and should by rights be seriously overextended and gasping for air. Instead of which Herma has apparently emerged in rude good health and has just embarked on a further €10 million extension to its plant.Managing Director Thomas Baumgärtner sounded almost cocky when in May 2010 he commented on Herma’s 2009 results: “Sales of labelstock increased by 8 percent year-on-year, from 96 to 104 million euros,” he said. “And since the market shrank overall, we can say we grew exclusively by displacing competitors. Our market share therefore advanced disproportionately. Our sales in the domestic German market grew by 11 percent, and we performed exceptionally in Central European countries in particular, some of which also yielded double-digit advances.”

High wage costs have driven many German industrialists to invest in lower-cost areas of the world, and we may infer that Herma’s decision to stay in Germany raised some eyebrows. “Fully automated processes enable us to stay competitive even in a high-cost country like Germany,” says Baumgärtner, “and with expanding capacity we can even create new jobs.”

Klöckner Pentaplast, like Herma, is based in Germany, and recently announced expansion plans for its shrink-label films. However, this $37 million investment is not for Europe but for Thailand. It will add 15,000 tons of shrink-film capacity to the company’s existing global production, and will come on stream – economics and politics permitting – in 2011.It is believed that the group may be planning to close some of its older plants in Germany and Switzerland.

Taking French sleeves
Although no hard and fast figures are available, the French market for all types of shrink labels seems to be expanding. France is home to leading player Sleever International, with world sales of $180 million. The only vertically integrated European manufacturer in this sector, Sleever makes its own shrink films, its own labels and its own application equipment.

Others on the French sleeve market are mostly specialized label converters, who buy (and sometimes rebrand) application machinery and shrink tunnels. Bopack, for example (recently acquired by the Autajon Group), with total production of 65 million square meters of labels, makes shrink sleeves at several of its seven plants in France and Belgium, and has an exclusive supply agreement with a Taiwanese application and tunnel manufacturer. Stratus Packaging, with 240 employees in France, makes all kinds of labels and recently innovated with Braille-printed shrink sleeves. Another French market leader is JPL with 180 employees; here the specialty product is the flexo-printed sleeve. All these converters (except Sleever) make a wide range of label types, but not so Decomatic: With its annual sales of just $12 million, this company specializes in PVC and PET-based shrink sleeves.

The Pain in Spain
The FINAT Annual Congress (see page 44) was also the venue for the annual meeting of the Spanish label association ANFEC. Association president Iban Cid pulled no punches in reporting on two very difficult years 2008-2009 for the Spanish market. Membership of the association dropped to 93 converters (out of a total of over 400), but members’ sales still accounted for 70 percent of the market total, said Señor Cid. The association collects materials and machinery suppliers’ statistics of sales on the Spanish market: From a peak in 2007, labelstock sales last year fell by 14 percent in volume (and rather more in value). New press installations fell from 54 in 2007 to just 37 last year.

Despite all this, the Spanish label converters present were in good spirits, particularly when shown photos taken at the first ANFEC congress in 1998: Pride of place went to a shot of a slightly younger Iban Cid getting the worst of an encounter with a young bull.

The bull was unhurt.