In January, Shanghai Xuteng Label Printing Co acquired the first MGI Jetvarnish 3D Evolution digital post-press machine to be sold in the Chinese label market. Robert Lu, founder and general manager of Xuteng Label, explains that the investment completes the company’s ‘internet + label’ offering which combines added value label production with Big Data analysis.
Robert Lu used to work for Avery Dennison before starting his own business in 2009. Xuteng Label’s production hall covers an area of 1,800 square meters with more than 20 employees, Xuteng’s primary business is self-adhesive label products for a wide range of end use markets including clothing and wine labels.
As a small player in China’s fiercely competitive label market, the question for Xuteng Label was how to find its own unique path to success. Based on his years accumulating technical industry experience, Robert Lu has his own understanding of the way the industry would develop in the future: ‘With the advent of the “internet plus” era, short run versions, digitization and personalization will become a growing trend in the future label market. We can develop quickly providing we can seize the initiative in digital printing.’
Xuteng Label purchased an HP Indigo ws4500 digital press in 2014 to satisfy these growing variable data label demands. Along with its previously installed Bengraphic F3 flexo press, Xuteng Label achieved an annual turnover exceeding 16million Yuan (US$2.33m). ‘At present, 30 percent of our business is done with the digital press, and the proportion will increase in future,’ says Lu.
Recent years have seen an increasing demand for higher quality finished labels in the Chinese market, especially in the health and beauty sector. Digital printing has up to now not been able to satisfy the requirement for complex post-press processing, which is an important source of added value for label converters.
Explains Robert Lu: ‘Post-press processing for labels improves the aesthetics and adds most value. The growing trend of industry digitalization will cover the whole manufacturing process, especially digital post-press.’
The MGI Jetvarnish 3D Evolution installed at Xuteng Label is claimed the first modular and field-upgradable digital UV inkjet coating and foil stamping system in the world.
Available in multiple widths (B1, B2), the Jetvarnish 3D Evolution can perform 2D/3D coating/varnishing and multi-color hot-stamping in up to five colors with variable data in one pass. There is no makeready, no plates, no screens or hot stamping dies.
Label rolls from the HP Indigo ws4500 are first sheeted then fed into the Jetvarnish 3D Evolution. The machine employs what MGI calls its Artificial Intelligence SmartScanner (AIS), using AI to create an automatic varnish and foil registration profile for the inkjet heads over the preprinted sheet. This effectively avoids any registration issues caused by overall or local sheet deformation, distortion or skewing.
The new equipment has allowed Xuteng Label to digitize the whole process of print and finishing, making the whole manufacturing process much more flexible. What’s more important, it has both simplified the design process and brought a new range of tactile effects for the company’s customers.
‘Konica Minolta is one of the few suppliers in the world that has mastered the core technology of the inkjet head,’ said Robert Lu. ‘It manufactures heads with high accuracy, quality and durability, and French company MGI has strong capabilities in software system development. So the cooperation between Konica Minolta and MGI is a powerful mega-merger between software and hardware suppliers.’
‘Internet + label’ platform
Although digital printing has become a new engine of growth for Xuteng Label, Robert Lu still keeps a cool head. ‘The introduction of advanced equipment is only the start of the digital transformation – changing to a digital mindset is the key.’
Lu states clearly that digital printing does not merely refer to production processes but also to services. Converters need to create new business models – which includes making their labels more richly creative and tactile.
In 2016, Robert Lu started a partnership with internet expert Richie Yu, jointly establishing Shanghai Xuhe Network Technology. This combination of conventional label production and internet mindset has placed Xuteng Label at the leading frontier of the label industry.
Currently, Xuteng Label’s ‘internet + label’ workflow covers everything from initial design options, to job specification, online design approval, product manufacturing and post-sales market monitoring and feedback for the client.
‘The new services we can offer based on this crossover have helped us develop many new customers, and our customers have reached more consumers through this offering – and this in turn has greatly increased our sales,’ says Richie Yu, deputy general manager of Shanghai Xuhe Network Technology.
Within the partnership Yu is primarily responsible for the development of the network and system data for the label operation, focusing on communication with customers and the design and control of the overall project.
Combining QR codes on the label with Big Data analysis has allowed Xuteng Label to offer value-added services such as anti-counterfeit, product tracking, channel protection and product promotion. This use of QR codes not only inspires consumer participation and improves their brand loyalty, but also facilitates brand owners’ monitoring of product sales using real-time collection of consumer data. This allows brands to adjust their marketing in real time and effectively achieve a closed-loop sales system.
Explains Robert Lu: ‘By virtue of its “internet + label” transformation, Xuteng Label is not oriented to be a manufacturing enterprise any more, but is devoted to providing label solutions for the whole industrial chain, and thereby improving the added-value of labels.’
Robert Lu is frank about the ROI on his new machine investment. ‘From the equipment investment standpoint, we are taking on certain risks. Current potential customers and orders are not sufficient for this equipment.’
In the past half year, Xuteng Label has produced numerous product samples targeting growing applications such as personalized wine labels and VIP cards, aiming to demonstrate the equipment’s limitless possibilities and provide as many product solutions for customers as possible.
In the future, Xuteng Label intends to enter the packaging market using this equipment. ‘The Chinese packaging market is much larger than the adhesive label market, and this will be one of our future directions,’ said Lu.
China is the second largest packaging market in the world after the United States. However, according to the latest 2017 statistics, the average annual packaging consumption of Chinese people is 12 US dollars per person, which is only 3-4 percent of that of developed countries.
With continued economic development in China and the growth of middle class disposable income, overall national consumption of packaging will also rise, Lu points out. As a supporting service for the commodity market, the packaging industry will have a rapidly growing role to play in elaborating design, product diversification, and ensuring quality, safety and functional aspects are taken into account. In a word, the future potential of packaging market is immense.
‘This immense sea allows fish to leap, and the vast sky lets birds fly freely,’ quotes Robert Lu. ‘We believe that Xuteng Label could not only meet customers’ differentiation and functional requirements using the MGI digital post-press equipment, they can also accomplish the transition from labels to packaging under the guidance of our “internet plus” mindset and practice, then exploit more markets with this professional service offering.’