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FLEXO Magazine : September 2010
Industry Indicators 600m/min HIGH SPEED FLEXO PRINTING ©EN03/10HP-RANGE Leading edge innovation in flexographic printing • P2P®: dynamic adjustment system controls printing pressures • PCT®: Press Control during Transition • PTC®: Predictable Torque Control • SprintWash®: new automatic washup system • FlexoSmartPackHP®: Uteco engineering platform for improved performance and profitability in flexographic printing • ShopWare® Production Management, Control & Monitoring: easy machine-operator interface to manage productivity • LogiPack®: automatic handling of reels and cores • Print configurations: 8 or 10 color • Maximum print speed: 600 m/min • Printing widths: 1000 to 1700 mm • Print repeat range: 350 to 1250 mm • High productivity machine • Reduced job changeover times • Innovative and dynamic machine design • Consistent return on investment email@example.com • www.uteco.com UTECO CONVERTING SPA • I 37030 COLOGNOLA AI COLLI (VR) • PH.: +39 045 6174555 • FAX: +39 045 6150855 And a new innovation is coming... GENETIC INNOVATION Uteco North AmericA • 3400 t owN PoiN t Drive, SU ite 160 • KeNNe SAw, GA 30144 • Ph : 770 427 4100 F: 770 427 4872 firstname.lastname@example.org • www.uteco.com FLX_May10_sec1.indd 33 4/17/10 11:06 PM Keep your Calendar Open the Week of November 16–18 , 2010 The Diamond HP 808 will be available for printing demonstrations at the Uteco North America Open House, to be held in 3400 Town Point Drive Suite 160, Kennesaw, Georgia, 30144 Uteco_OHad_mech.indd 1 7/15/10 9:36 AM In general, the overall packaging paper segment has declined slightly less than 1 percent in the past five years due, in large part, to the overall market decline that took place in 2009 which negated the growth in previous years. However, the category clearly does not perform uniformly across the different seg- ments as growth rates by application have varied significantly over this time. This primarily reflects the fact that different dynamics are at work in each one of these markets, and which have affected demand differently. For example, while multiwall bags have declined by about 9 percent per year over the last five years, release papers have grown by about 3 percent over the same time frame. In the case of multiwall bags, film-based materials have demonstrated key advantages such as strength, durabil- ity, cost, and surface gloss in certain applications that have caused converters and CPCs to switch to these materials. However, these advantages are not so significant or impor- tant in release-base applications to the same extent where paper has a much stronger value proposition relative to sub- strate alternatives. Other categories reflect similar differences in dynamics, resulting in different levels of demand growth over this time period. Looking ahead, the demand loss of the last five years should turn into a slight overall demand gain as we come out of the recession (resulting in a low demand base in 2009) and begin to make up some of the demand losses over the next few years. While part of the improvement will be due to the fact that the next five year period is starting from a low base year, there are numerous developments that we believe will have a positive impact on the use of paper based packaging materials. Some of these positive drivers include the following: • Growing importance of sustainability efforts (at the retailer, converter, and CPC levels) that will shift demand in some cases to paper based materials that are biodegradable, compostable, and recyclable to a greater extent than film based materials. In addition, these substrates generally have higher recycled contents, are not made with petro- leum based materials, and are largely produced with certified fibers and renewable energy sources. • New technologies that will be commercialized over the next few years that will utilize packaging paper sub- strates. Examples of these developments include a) ac- tive packaging, b) intelligent packaging, c) new surface treatments that improve strength, aesthetic properties, and other functional characteristics, d) enhanced fibers and materials, e) new package structural designs and innovations, and e) innovations in related industries such as printing, coating technologies, converting processes, and papermaking, to name a few. • Industry consolidation, which will result in the remaining mills operating more efficiently and focusing on the high- est potential markets that yield above average returns. This will reduce relative cost structures and promote product development programs that allow these materi- als to be more competitive relative to alternatives. So, what are the key implications to converters and print- ers of packaging papers in the years ahead? A few thoughts include the following: • Paper-based materials will likely gain acceptance among CPCs in many of these packaging applications due to a favorable environmental profile and expected technol- ogy developments. This suggests that converters should reconsider paper alternatives for some applications that may have switched to film or other competing substrates in the past few years. • Digital printing will continue to make inroads into pack- aging paper applications, particularly those where paper is the primary print surface, where aesthetics are an important aspect of the package, and where run sizes (at least a sizeable percentage) tend to be less than 10,000 impressions. • Most packaging paper segments are highly fragmented today, but continuing competition and low growth rates will result in further consolidation and streamlining in the next few years. It is important therefore for converters to understand the relative com- petitiveness of their different paper sup- pliers to ensure that they are a long term survivor in the market with the capabilities to respond to emerging opportunities and ensure their continued competitiveness going forward. n ABOUT THE AUTHOR: Frank Perkowski is the president of Business Development Advisory (BDA), a specialized consulting firm focused on North American paper and paper-based packaging markets. The com- pany is based in Marietta, GA and works with companies to identify and assess growth opportunities. More information on the referenced study on packaging papers can be found on the company ’s website at www.bd -advisory.com or by contacting Frank at email@example.com. Figure 3 18 FLEXO september 2010 www.flexography.org FLX_Sept2010_mech.indd 18 8/31/10 5:40 PM