As pressure grew on the industry, FlexoTech magazine helped to guide its readers through the hard times.
FlexoTech: March 2008
Labels feel the pressure on profits
Weaker profitability is hitting narrow web label converters but the still have many options for growth.
According to some pundits, the current economic uncertainty does not seem to dampen the Pollyanna like instincts of the label fraternity. After all, it was only six months ago when the industry was decked out in all its finery at the record breaking Labelexpo at Labelexpo in Brussels.
Whilst most established European label converters and printers are keeping their presses busy, they are generally less happy about overall profitability. Eroded margins and weaker returns on investments are the consequences of rising costs for materials, labour and energy. Meanwhile, end-users capitalise on excess capacity by naming their own prices. Other business threats include longer payment schedules, small orders required at bulk order prices and the cost of financing customers’ inventories.
A profit led strategy may include diversification into specialised or high performance products, serving such niche markets as pharmaceutical, health care, industrial electronic and security related sectors. Swing tickets, garment tags, booklet labels and multi-part labels are among a wide range of products all possible on modern equipment.
