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Avery Dennison growth full of Eastern promise

Avery Dennison Roll Materials Europe is to aggressively target the fast growing Eastern European and Southern Mediterranean label markets through distribution centres gained from the acquisition of its former rival Jackstädt.

The announcement was made in the Czech Republic by senior management of the pressure-sensitive labelling divisions Roll Materials Europe and Worldwide, who revealed the company’s new focus on emerging markets.

Palle Jespersen, marketing director Roll Materials Europe, said that the Western European label market made modest growth of 4% in 2002. North America was also flat at 1.5% growth due to economic slowdown.

In contrast, the Eastern European market is booming. Currently representing 15% of Avery Dennison label sales, it has potential to grow 20% a year. Said Mr Jespersen: “Retailing infrastructure is becoming more like the Western market. Western companies such as L’Oreal are establishing themselves here which means increased labelling requirements at a local level.”

Avery Dennison is now well placed to meet these needs. Jackstädt, which was bought for $295M in 2001, has distribution centres in Prague, Vienna – which will be extended to cover South Eastern Europe – three in Russia, and a newly opened centre in Warsaw.

The Mediterranean, North African and Middle Eastern markets also represent areas of significant potential growth for Avery Dennison to be shortly served by a sales office in Istanbul.

Further investment includes 13 new slitters across Europe in the next two years, along with two coaters – a hot-melt for the French manufacturing plant and an emulsion coater for the facility in Luxembourg.

The merger with Jackstädt has also brought a larger variety of coating assets. Jac’s 1/2m coaters have joined Avery Dennison’s 1m coaters. This enables customers to coat smaller quantities of expensive speciality label stocks, particularly useful in security label applications.

Future product innovation under the Roll Materials umbrella is likely to focus on functional labels such as time-temperature indicators and smell-sensing labels. Said Sjaak Elmendorp, vice president pro-duct technical innovation, Roll Materials Worldwide: “We don’t have a product on sale yet, but it’s a capability that we can deploy if we choose to do so.”

RFID continues to be a strong focus as the company strives for a cost-effective product for consumables. A number of partnerships were made last year, including an agreement with Alien. The California-based company has developed a means of placing the RFID chip close to the antenna in an automated way that is said to lower manufacturing costs.

“We will be manufacturing RFID in-lays in North America over the Summer. Those will not be the low-cost RFID tags that we will eventually have, so they will not go into consumable operations, but they will be used for pallet tracking,” adds Mr Elmendorp.