Pauline Covell reports from 'Gravure Makes the Brand' the European Rotogravure Association's packaging conference
Nearly 100 delegates were treated to a series of exceptional presentations on October 23-24, 2002, in Münster, Germany when ERA tackled trends and market developments in packaging gravure, as well as technical innovations designed to improve the efficiency and competitiveness of the process.
Mike Fairley (Labels and Labelling Consultancy) underlined that “globalization and consolidation in the packaging chain is now dramatically speeding up and will change the way that the packaging industry operates”. Reduction in trade barriers and tariffs, together with improvements in transport and communications, have led to an explosion in the growth of global trade which offers new opportunities for converters. “However, giant global buying groups dominate purchasing negotiations.”
He cited how large brand owners are opening plants in Asia and South America. “They are also looking to reduce packaging spend, and want suppliers to help provide better management of their supply chains. They will use the internet to do that.” An example was a US producer who had pushed down its labels spend by 20 per cent using an e-auction.
Amcor Flexibles Europe chief operating officer John Durston told delegates that the world’s fifth largest packaging company’s ambition was “to be in the top three and to be a globally recognized brand itself – in order to generate above average returns”.
The message was clear and simple: “We have to be strong enough to fight back.” As far as brand owners and retailers are concerned that means a fair price for material produced in cost effective plants. “We have a target of 15 per cent return on funds,” says Durston, who has been appointed to the ERA board to represent gravure packaging converters.
“The European Flexibles operation is on target. It is the European team that drives the strategic direction and technology” (of the global flexibles operation), he added.
To achieve that ‘Holy Grail’ of profitability the company has taken some key decisions. “We have closed five plants in our restructuring. If they cannot perform then we will close plants and, if we can’t make a profit on a product then we will not make it,” he said emphatically.
There’s good news for brand owners. Strong cash generation means investment. And the company is also committed to geographical expansion wherever it is needed. “We want to make a big acquisition in the USA when we can find the right company,” he announced. “In our vision it is our main target.”
Eastern Europe has been cited by many as attractive from a production point of view, but Durston cautioned: “In Eastern Europe there is in total gravure equipment capable of producing more than the volume needed to fill it. That’s worrying. The best manu- facturing areas for us are Poland and Portugal.” The company will also be manufacturing in Russia.
In addition to returns, key drivers for Amcor are safe manufacture (part of bonuses are paid for 0% accidents), zero defects, leadership through innovation and the way the company approaches environmental matters.
Providing innovations for packaging users is an essential part of the overall strategy. “We have appointed an innovations director. The company will be offering what the customer wants and not what technical managers think would be a good idea,” he revealed.
Looking at flexibles companies in today’s market he sees a future where “there will be large companies and niche players. It is those in the middle that will struggle,” predicted Durston
“I see a vigorous business in gravure, although we are also strongly committed to flexo,” he said. (It has far more flexo capacity in the Nordic countries and the UK than elsewhere.) To get some idea of the sheer size of the operation, Amcor Flexibles Europe has 65 gravure presses which produce 1.6 billion running metres a year! The company buys four gravure presses each year. “On average we are using 8.7 elements per press and currently 19 of our presses also have in-line lamination,” he reported. For the future he sees that new presses will be general purpose, high speed and wide. And there is a requirement for “short run fast change-over presses, which will not necessarily be flexo.”
Asked about e-auctions for converted materials he replied: “A protocol should be set up; we ought to subscribe to rules; they should be underwritten by Brussels. E-auctions have gone too far, so we have to live with it.” However, the company’s experiences with auctions have included “dishonesty and dummy bidders”.
Jan Duffhues, print development manager for Masterfoods Europe, explained brand strategy from creative design to gravure printed packaging material. In the three divisions of the company (food, snackfood and petfood) some 11,000 new packaging items are created per year by a recently established single in-house graphics team.
Albert Scheffer (VAW flexible packaging) commented on the different print processes in packaging printing: “Gravure is the process for long production runs and repeat orders.” Lothar Roth, managing director of the international cylinder engraver Janoschka, looked into cost saving possibilities and came to the conclusion that “better communication is the key factor”. And Barry Griffiths, of the Tecnograv Group, showed examples of packaging print jobs coming back from flexo to gravure. He cited reasons such as the truly seamless printing forme, and reduction in the number of printing units required to achieve the same colour gamut.
Two new members were welcomed into the ERA Packaging Division during the meeting: Alfa Roto, a gravure packaging printer from Athens, Greece, and Gravure International, a gravure cylinder engraver from Izmir, Turkey.
ERA used the event to launch its Packaging Gravure Award 2003 competition, which for the first time will offer a prize for creative brand design to packaging agencies. This is in addition to flexible packaging, paper/foil/film, folding cartons and speciality categories and an innovation prize offered to converters and suppliers. The Awards will be presented at the ERA Packaging Conference in the UK next autumn.
The conference concluded with a visit to Saueressig, where innovative cylinder engraving technology was presented.
Conference presentations can be found on www.era.eu.org