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FLEXO Magazine : January 2009
INDUSTRY INDICATORS cent to customers. There was talk of customer push back, with the general understanding from consumer products companies be- ing that business was tough all around. For narrow-web leaders, top challenges and concerns relating to the economy, in no particular order, were listed as: ??Stability ??Liquidity ??Buyouts and acquisitions ??Fear (itself ) The Council noted that, while costs have risen in China and quality remains sub par, there is still competition from the region. However, the reduced competitiveness has brought business back to the U.S. In addition, narrow-web leaders said that outsourcing overseas can be bad PR, as many areas are not as regulated as North America. Some North American printers that have bought plants in China and/or India and are regulating them as they would locally, the Council claimed. This allows the customer to know it is still getting quality. The group claimed opening an off- shore operation was a smart move, if financially feasible. Sustainability was mentioned. There was concern about inconsistent definitions of the concept, and that customers, despite the demand, were not willing to pay extra for greener products. Some members stated they were working with suppli- ers on the issue. Desires were expressed to reduce one’s carbon footprint. Other comments included the importance of publi- cizing achievements. Emerging technologies and markets of interest to the NWLC included newer digital/hybrid presses, which, while interesting, still have kinks that need to be worked out. RFID was singled out as something to keep watching, as was different types of finish- ing. Single-serve packaging, a competitive niche field, was being looked at by some members. NEWSPAPER/PUBLICATION Flexographic newspaper and publication printing was hit hard in the past few years. According to the Newspaper Leadership Council, business was down an estimated 10 percent to 15 per- cent. Declines happened in both circulation and ad revenue. Most expect these declines to continue. Council members noted efforts to battle this throughout opportunities in Web-based business, niche publications, and commercial printing. At this point, the flexo newspaper/publication industry’s key goals revolve around muting losses and stopping slides in circula- tion and advertising. Circulation itself comes to forefront, as in- creased readership can justify increased advertising. Most noted they were looking for efficiencies, but were not specific as to how they were trying to achieve this. WIDE WEB In the wide-web segment, members of the Wide Web Leadership Council (WWLC) generally saw business as remain- ing level, with some observing small increases in business. Most identified snack food flexible packaging as a notable growth area, with one Council member estimating as much as 6 percent growth. Another was stand-up pouches, particularly for pet food. Shrink sleeves dropped the most, by as much as 22 percent by 18 FLEXO JANUARY 2009 some estimation. Shrink over-wraps also fell. Overall, the Council expected business to at least remain level if not gain in some areas in 2009. Increases are expected in bakery, snack food, and stand-up pouches. Council members plan to focus on existing accounts and markets or growing business at new accounts that fit current strengths. As such, there were little plans to engage new or emerging markets. There was some discussion on sustainability, with some interest in the SGP Partnership and SGP certification. For some, strategic investment in capital equipment helped reduce energy consumption and offset some energy and raw ma- terial cost increases. Wide web leaders also referred to effective communication when it came to passing along price increases, even helping customers reduce their own costs. When it came to the economy, there was concern among wide web printers about restriction of financing for capital improve- ments and acquisitions. Still, there was confidence that money will get back to flowing in the near future, though few would state a time- line. One insisted that, barring a deep recession, the impact on business would be minimal. A lack of cash for capital investment was also of concern when it came to efficiency and continuous improve- ment goals. Small order sizes also posed a threat. Lack of operator train- ing was the most commonly men- tioned obstacle. Members indicated they were implementing 5S and Lean concepts. One managed to purchase new capital equipment to help boost efficiencies. Top challenges/concerns relating to process control included controlling color on press, and convincing man- agement to support expenditures for additional equipment and employee training. Council members claimed to be evaluating procedures involved in color measurement, attempting to develop color standards, and better ink handling. The goals were to achieve less waste, shorter press setup time, more consistent product, higher customer satis- faction, and maintain competitiveness with other suppliers. Most members of the WWLC were not concerned with global- In-store displays are expected to rise in 2009, insisted FTA’s Corrugated Leadership Council. ization, but some noted struggles with customers that have over- seas distribution, and understanding and meeting the regional regulations, e.g., EU standards. The key global concern for some was the competitive threat of low-cost Asian prepress/packaging suppliers undercutting business in the U.S. at negative profit levels. Technologies of interest to the Council were wide ranging, and included expanded gamut printing, digital printing, flat-top digital plates, G7 color separations, in-the-round plate technology, and online defect detection. Many of these were currently under evaluation by the companies who named them. For some tech- nologies, the issue was whether they could improve print quality at little or no additional cost. ? www. f le xography. org
End of Year 2008