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FLEXO Magazine : March 2014
Overall, U.S . economic growth and modest increases in areas such as durable labels have underpinned im- proving demand for pressure sensitive labels. The number of label converters in North America is still high and the sector can be described as fragment- ed. However, in recent years a core of major converters has emerged that has not limited its activities to North America but has acquired companies across the world—often focusing on specific mar- ket segments such as wine, beverage and health and beauty labels. ASIA The Asian market remains the con- sistent driver for global growth, with an estimated volume increase of 6.5 per- cent to 7 percent in 2012, led by China and India. While the region represents around 36 percent of the global label market, China alone represents around 16 percent—for comparison, the U.S. represents about 16.7 percent—and with an annual growth rate of around 8 percent to 9 percent, it will soon outstrip U.S. demand. Glue applied labels remain the mainstay of Asia’s label demand, but pressure sensitive labels have experi- enced considerable growth because of their flexibility in range of materials and ease of entry for both laminators and converters. Sleeve labels are also proving attractive and integrated man- ufacture of base films by converters is a strong feature across the region. Investment in Chinese material manufacturing and in converting has been intense and there is over capacity in many areas. The numbers of new pressure sensitive label laminators entering the Chinese market each year can be measured in double digit figures and investment in printing and converting, as well as in film manu- facture by local and foreign investors, has been significant. Combine these capacity investments with a market that is showing some slowdown in growth— albeit at 7 percent to 8 percent—there is a now a need for Chinese companies to look outside China for business, and they are increasingly doing so, across the region. SOUTH AMERICA South America—especially Brazil—is a growth market for labels. Its positive growth in 2012, around 4.5 percent, con- ceals a degree of continuing volatility, influenced by the changing economic situation within individual countries. Brazil, with it strong economy and high share of regional population, dictates overall regional performance. Argentina is the second most significant market, but suffers from highly variable economic performance. Colombia and then Chile are next in demand. Glue applied labels are the most pop- ular labeling format, but in this region wraparound glue applied labels may also be produced by flexible packaging companies rather than by traditional label producers, since they have the medium to wide width presses capable of converting the significant volumes of film labels used for sodas and mineral waters. Pressure sensitive labels are growing, supported both by a number of domestic label laminators as well as by inward infrastructure investment by international players. AFRICA & THE MIDDLE EAST Africa and the Middle East regions perform in line with, or marginally ahead of, global market growth rates, albeit from a relatively low market share. Global & Regional Label Market – Growth Rates 2012 Source: AWA Labeling & Product Decoration Markets Global Review 2013 0 1 2 3 4 5 6 7 8 Global Europe North America Asia Pacific South America Africa & Middle East LABELS, REGION BY REGION • U.S .: “Overall, U.S . economic growth and modest increases in areas such as durable labels have underpinned improving demand for pressure sensitive labels” • Asia: “The Asian market remains the consistent driver for global growth” • South America: “South America’s ... positive growth in 2012, around 4.5 percent, conceals a degree of continuing volatility, influenced by the changing economic situation within individual countries” • Africa & Middle East: “The regions perform in line with, or marginally ahead of, global market growth rates” • Europe: “Undoubtedly, the prevailing economic situation across much of Europe has impacted label market growth” www.flexography.org MARCH 2014 FLEXO 13