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  • 13 Mar 2018

Herma targets ‘bold and challenging’ growth

The Herma Self-Adhesive Materials division will move into its new production facilities in autumn 2019, which are currently being constructed

Herma is targeting a further increase in sales in 2018 after reporting record sales of €342.3 million (US$422 million) in 2017.

With its three divisions, Self-Adhesive Materials, Labels and Labelling Machines, Herma has grown by 6.5 percent in 2017.

Herma has benefited from a long-term internationalization strategy, with an export ratio of around 60 percent allowing it to profit from strong economies in many important business regions around the world.

This has helped Self-Adhesive Materials see sales of raw materials for label production increase by 5.9 percent in 2017, from €192.8 million to €204.1 million. In Germany and Europe, Herma was able to gain market shares in this field. Online commerce growth rates that were often in the double digits – which in turn caused an increasing demand for logistics labels –provided a boost for the Labels division. Combined with a good development in the school products business, sales in this division increased by 4.8 percent from €81.6 million to €85.5 million. The Labelling Machines division grew by 16.4 percent from €42.8 million to €49.8 million. In addition to the continued internationalization strategy, supplying complete labeling modules in large quantities to manufacturers of complete packaging plants was a growth driver for this division.

For next year, Herma’s managing directors, Sven Schneller and Dr Thomas Baumgärtner, are targeting a sales increase of four percent. ‘That is both bold and challenging, and will certainly require great efforts,’ they commented in a joint statement. ‘But in view of a continuing favourable global outlook, it should be achievable.’

To support these efforts, Herma is investing in new production technologies and capacities. Until the end of next year, Herma will invest a total of €100 million (US$123.3 million) in production technology and buildings at its headquarters. At the end of this year, a new plant for the Labelling Machines division at its headquarters in Filderstadt will be commissioned. The Self-Adhesive Materials division will then move into its new production facilities in autumn 2019. These are currently being built on an eight-hectare area directly adjacent to the company’s headquarters that the self-adhesives specialist bought three years ago.

Further, the number of employees in the Herma group has already increased in 2017, from 966 to 993, with a further 100 to be recruited in the near future.

In a note of caution, Schneller and Baumgärtner stated: ‘Due to exchange rate effects, we are struggling with diminishing returns in euros in the UK. In this market, which is very important for us, we continue to face great uncertainties regarding Brexit. Besides, we are currently registering almost inflationary price increases for important resources such as cellulose which we cannot fully pass on to customers. This situation will hardly improve over the next years, since the boom in many emerging markets has caused real resource shortages.’

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