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FLEXO Magazine : September 2014
MICHAEL LANE CEO, Lo on Label FLEXO®: What is the state of the label industry? Where does it stand compared to three or ve years ago and where is it going? Michael Lane: e label business is as vibrant as ever. Although we'd like to see the growth rate higher than 1.5 percent to 2 percent, at least we operate in one of the brightest areas of the printing industry. Using Porter's Five Forces model as a guide, we have a marketplace where the buyers have considerable leverage over con- verters, regulation is driving change in some verticals---GHS and food labeling, to mention two---and digital technology continues to be a game changer vs. traditional exographic technology. e relative low barriers to entry will continue to support a highly fragmented market in terms of the numbers of converters for years to come. FLEXO®: What are some challenges facing the label industry? Lane: Customer consolidation among large label and lm buyers, market fragmentation and the belief we are entering an in ationary environment with the power in the buyers' hands. FLEXO®: Where are new growth opportunities emerging in the label industry? Lane: We rmly believe the growth opportunities have to be devel- oped by working closely with existing customers to drive innovation and increased labeling concepts and applications. Stealing market share from competitors is a lose lose game. FLEXO®: Tell us a bit about your presentation at Labelexpo. What will you be discussing and what can attendees expect to learn? Lane: I'm participating on the converter panel. I understand it will be more of a Q&A. I will be commenting on the strategy behind Lo on's nancial turnaround. Converters can drive pro tability by focusing on disciplined cost control across the enterprise, increased sales from existing capacity, adding strategic digital technology to the product mix, re thinking organizational structure towards lean, and identifying and training all employees on a rm's brand essence to create value for customers. SCOTT FISHER President, Smyth Companies FLEXO®: What are some challenges facing the label industry? Scott Fisher: I think there are three primary challenges the industry is grappling with today: • Overall Growth Potential ere's a lot of open capacity and a lot of organizations that aren't exercising good pricing discipline. at makes it tough to land new business. Plenty of companies are in what I refer to as "protect and preserve mode" • Workforce ere are lots of tenured workers and for people who want to come into the industry, it's challenging for them. at's at all levels of the business, in every functional area. Packaging is probably not a real "sexy" business, compared to technology companies; the likes of Google, Apple, Amazon, Yahoo! and other tech focused businesses • e Evolution of Digital e rise of digital is challenging all of us. Quality is outstanding and that is challenging all of us to look at operational e ciencies because of the demand being put on us. Some customers talk about exo and in conversations, it's being considered analog, i.e. analog vs. digital. at makes exo sound old FLEXO®: Where is the industry headed? Fisher: Digital is promising. ere are a couple of hurdles for the technology to overcome but once that happens, exo will see a sub- stantial impact---not just the technology but all the support groups around it. Digital requires much less space, because it does not use a lot of square footage. Management is much more controllable, because digital needs a di erent type of workforce, one that's tech savvy. Labelexpo will be interesting. e speeds on digital are increasing and there are lots of really interesting developments. Smyth, we're looking strongly at expanding our digital capabilities. Today, if you don't have digital, you don't make the list of preferred suppliers. It's a "must" to compete in today's graphically changing environment. FLEXO®: Tell us a bit about your presentation at Labelexpo. What will you be discussing and what can attendees expect to learn? Fisher: I'll be part of a panel of top executives at some of the larger converters, talking what we're doing internally, what we see, where things are going, mergers and acquisitions, etc. 28 FLEXO | SEPTEMBER 2014