labels  appointments 
The biannual conference of Australia’s label and tag making fraternity (Latma) gave plenty of food for thought for the delegates in Melbourne. Wayne Robinson reports I’m going nowhere, somebody help me" – the words from the Bee Gees’ record Staying Alive echoed around the conference hall in Melbourne, and had many delegates nodding in recognition of the situation. The last few years have seen label industry across the Asia Pacific region, and including Australia, adjusting to harsher realities, with a surge in competition, customers that have become significantly more demanding in the price requirements, and an upswing in technological innovation to consider.

Opening the conference outgoing Latma president John Buckham says the theme had been chosen because indeed many label printers needed some help to ride through the gathering storm clouds, the next two days aiming to provide some of that help.

First on the podium were the state associations reporting on the year gone. The Australian label heartlands of Victoria, South Australia and New South Wales were all doing reasonably well, although like all trade associations, struggling to see new talent come though. Western Australia though is on its knees, unable to raised a quorum of just four for its AGM. Queensland had not sent a delegate to the conference, but New Zealand reported a great year, with an increase in membership and well attended events.

Virtually every print association from every sector of the industry is facing a slide in membership. Gasaa for instance, the old prepress association, managed to attract less than 40 printers / trade houses to its conference, held at the same weekend, its membership has dropped dramatically in the last ten years, and it is currently trying to redefine itself for the new millennium. Latma clearly has strong support in some areas, indeed the gala dinner dance with the new label awards held on the Saturday night attracted a record crowd of 240. Latma like other associations needs to generate and communicate compelling reasons for non-members to join.

Keynote speaker for the conference was Gary Gates, CEO of Gates Packaging in the USA and a 40 year veteran of the industry. Gates gave a briefer than expected opening presentation, under the title "narrow web beyond pressure sensitive", a theme that was to be taken up by other speakers over the conference, essentially inviting label printers to look beyond just labels for their market.
Gates outlined the six areas he believed summed up customer demand:
• Inventory management
• Increased frequency of production runs
• Reduction in supplier numbers
• Clear communications
• Converters who know the industry – they talk
• Converters who listened to customer needs
Gates claims that price is way down the list of customers’ criteria for winning their work, with ideas and innovation at the top of the pile, followed by repeatability and quality, with technical support, price and delivery, making up the rest.

The world according to Gates is made up of three type of companies, symbolised by Wal-Mart, FedEx and Harley Davidson. The Wal-Mart type company typified those that control the life of products, demanded specific packaging, and were driving a proliferation of products. The FedEx type companies are those that wanted the packaging and wanted it now. Harley Davidson type operations are those that set out to exceed their customers demands.

The US is seeing a fast growing recognition of the unrivalled position of packaging for POS applications. According to Gates two-thirds of all purchasing decisions within the supermarket are made as a result of the packaging. He also claims that the average American supermarket shopper goes into the shop for nine products and comes out with 19, the majority of which have been chosen according to their packaging.

Gates then turned his attention to label printers, claiming that narrow web flexo could be used by label printers to enter as yet untapped markets with huge potential. He urges label printers to look at the broader picture, and gave several areas he believed were prime targets. These included wrap around labels, shrink sleeves, stretch shrink sleeves, and the fast growing pouch product. Gates says there was a strong move away from paper to film among customers, because of the depth of colour perception that could be achieved. Folding carton too was an area Gates saw narrow web flexo as providing a workable solution to the market.

The next person to give a presentation was legal identity Henry Jolson QC. Jolson has made his name in conflict mediation, and provided valuable insight into how this operated when it came to commercial litigation. Claiming Australia is the world leader in mediation he says that it is a simpler, faster and crucially a lot less expensive than court-based resolution.
Conflict mediation will cost around $8000 per day, and is essentially a means whereby the court grants the power of resolution to the mediator, whose job is then to bring the two sides together and make a judgement. Mediated conflict resolution is not limited to single issues, but is especially useful in a multi-party dispute.

Olsen gives the example of a label which comes of the product once the consumer has it at home. Determining who is responsible, and therefore who pays any damages is a complex job. Possibly responsible are the label stock manufacturer, the adhesive manufacturer, the label printer, the label applicator, the transport company, plural if more than one has been involved, the product filling company, and the supermarket. All these companies will be involved, as will all the insurers. Taking this through the courts would be very costly.

However taking the route of mediation would reduce this cost considerably, and further may mean the commercial relationship between the parties is not destroyed, as it would be in a court case.

Olson cites the case of a person who became a print franchisee in Queensland. He paid $140,000 for the franchise, which soon turned out to be a dud. The franchisee took the case to court, which took 13 days when it eventually arrived before the judge. Although the judge found in the franchisee’s favour, and awarded him costs, which by that time had amounted to some $200,000, the defendant immediately went bankrupt, meaning the franchisee was now $340,000 out of pocket. Olson says that with mediation those costs would not have occurred, and resolution may have been reached.
According to Olson it would be prudent of each company in their working contract to insert a clause stating that in case of dispute mediation shall be the first port of call, as mediation does not need to come through the court judge’s direction, but can be a pre-court event, and one which is aimed at keeping the dispute out of court.

Citing the multi-party case where the label fell off Olson says that the aim is to separate the people from the problem, taking as much heat out of the situation as possible. The traditional method of firing off letters to each other from lawyers is not only expensive, but often irreparably fractures commercial relationships. The objective according to Olson is a win-win situation.

The next speaker focused on nitty gritty technical issues. Val Rimas, a Canadian ex-classical musician now working with Rotoflex gave an in-depth assessment of automated label inspection system. Beginning by stating that the human eye remained the supreme inspection system, he says that an automated system never slept or grew tired, is constant and is predictable. It has no imagination, no discernment and no self will, although with the uptake of fuzzy logic self learning system will apparently become available. Automated systems helped customer relations because they reduced waste, eliminated defective products and provided an objective measure of quality.

Rimas then went on to give an in-depth overview of systems requirements, summarising by stating that when a label printer is looking at buying an automated web viewing system they need to ensure the supplier understands their requirements, ensure it becomes part of an integrated procedure, have good training, ensure good support, and over all define the objectives at the outset.

The final speaker of the Friday session, before delegates departed for golf followed by an evening cruise, was Sericol Europe application specialist Ian Isherwood, speaking on emerging technologies. Isherwood first shocked the delegates by stating that 15 of the UK’s top 23 label printers were in the red. He claims that power has migrated almost entirely to the packaging buyers, that technology was offering opportunities but also threats, and that globalisation is presenting additional challenges to label printers.

Isherwood calls on label printers to recognise true production costs, to understand the unit price as against the price increase, to stay in touch with technology, and not to re-invent the wheel where it was not necessary. He reckons that true technological innovations a few and far between, and the real issue is in implementing technology. He poses the question of how do companies maintain momentum and keep pace with technological change, and gives the answer as partnerships with suppliers.

As an example he uses the narrow web UV flexo printer. There, technology is moving forward quickly, but with new plates, new presses, new inks, new stocks, new mounting tapes, new anilox the potential for problems is clear. According to Isherwood one company implementing new technology was seeing pin-holing in the finished print. The printer called all the suppliers together, and together those suppliers worked through the process until the source of the problem was identified. Isherwood makes the point that for the printer to do that would be impossible considering the amount of time that was involved, but suppliers have the in-house expertise and the desire to identify where problems are coming from.

Next morning a quartet of suppliers laid out their view of current issues; Edale, Gallus, Rotra Pacific and Rapid Machinery, with servo motors one of the hot topics. Klaus Aarestrup from Gallus identifies servo motors as being a primary cause of reduced set up time, which he says is the primary need in label production, rather than increased press speeds. Edale’s Alan Chandler, over from the UK talked about the opportunities with hot foiling and combination presses, including label printers getting into web fed carton production. Bruce Mansell from Rapid Machinery highlighted his company’s innovative approach to the market, and banged the drum for the Aussie spirit.

Another international speaker, Raflatac Group vice president Ilkka Ylipoti, defended the recent consolidations within the label stock companies, rebutting the fears of some in the industry about a perceived lack of choice. Ylipoti says there will be little further consolidation, as the regulators in Europe and the US will not allow it.

Ylipoti claims that Asia is the fastest growing region for label stock. Currently growing at 4.5 per cent a year, with plenty of room for growth. Label consumption among the Chinese population is 30 while North America it stands at 331, 10 times as big.

Industry consultant Nigel Taylor gave a highly informative presentation on digital presses, which label printers are beginning to look at seriously, indeed the first installations are already going in.

Speaking with a good dose of commonsense Taylor asserts that label printers needed a "good reason" to get involved in digital printing, but that for short turnaround and short run length digital presses do offer compelling arguments. Variable data, one of the big selling arguments of digital press manufacturers is not really needed in label printing.

Taylor outlined the three primary methods of digital printing; toner based systems such as those from Xerox, Heidelberg and Xeikon; the liquid ink system from Indigo; and inkjet printing, either Scitex water based or Xaar-Barco solvent-based systems.
A five-point checklist was provided for label printers looking to get into digital printing:
• Is it easy to operate?
• Is it robust?
• Does it use inexpensive consumables?
• Is it substrate independent?
• Will it integrate with finishing equipment?

Six factors were essential to consider, according to Taylor:
• Cost of the software and upgrades
• Staff costs
• Rip time
• Consumables cost
• Substrate suitability
• Supplier support.

A quick overview of the different digital presses was then given to the delegates, and a three pint summary given:
• Determine the total cost
• Have a definite market
• Work with a supplier you are comfortable with.

Keynote speaker Gates then returned, and although again finishing somewhat short of his allocated time, he delved further into the opportunities of narrow web flexo printing for label printing companies.

According to Gates’ economics, any print run of less than 30million square inches is a surefire candidate for narrow web printing, as opposed to wide web, and even with the 30-50million square inch run length narrow web competed strongly against flexo.

Gates says the trend for narrow web is irrevocable, and predicts a huge rise in pouch production, replacing glass jars, as well as creating new packaging, for instance for cat litter, which previously came in brown bags at best. In the US pouches are already proving their worth as a selling tool, one manufacturer reporting a four to one sales ratio with the same product in pouch to box.

The final speaker of the session was also one of the best received, Frank Gavrilos, ebullient managing director of Avery Dennison Australia. He states that the growth for pressure sensitive label material was 5.5 per cent in Australia, relatively healthy, but a figure which paled compared with the 21 per cent that Asia was recording.

Major factors currently impinging on the industry were globalisation, with single supplier contracts, the internet economy which is generating an increase in labelling requirements as people the products people buy have labels on them, and retail transition, with more bigger stores and fewer smaller ones. According to Gavrilos this all means a compression of both price and working capital, a surge in the need for innovation, shorter run lengths and shorter lead times, and a need for re-investment in information hardware.
Passing on some corporate guidance, Gavrilos believes that a company strategy needs to be a balance of passion, competency and economic opportunity, and that brutal facts need to be faced. He calls on label printers to grow the pie themselves, in other words their sphere of operations, as the market share would only otherwise grow at the expense of each other.

And then it was on to the ’70s Gala Dinner Dance and Label Awards, by way of a lifestyle seminar by Di McDonald. Gavrilos in fact was one of the star attractions of the 70s night, due to his full-on 70s outfit, as were the many other delegates who had been to the back of their wardrobes, dusted off the flares, let out the waistband by a good few inches, and plunged headlong back into that crazy era. "Somebody help me, I’m going nowhere" may have been how some delegates felt at the start of the bi-annual Latma conference, but by the end of the conference they had a clearer idea of where they, and the industry as a whole, are going.