Shrinkflex embraces flexo to capture SME growth

Shrinkflex is betting big on flexo printing as the publicly listed label manufacturer seeks to capture a lucrative, but underserved market segment in Southeast Asia. The company’s installation of a Nilpeter FA-22 flexo press marks a strategic pivot toward serving small and medium enterprises (SMEs) with more cost-effective printing options.

Founded in 2007, Shrinkflex (Thailand) Public Company Limited has built its reputation primarily on gravure printing, which accounts for nearly 90 percent of its business. The company started with shrink sleeve labels for the beverage market before expanding into cosmetics, household products, personal care and pharmaceutical segments. However, the company’s leadership sees flexo as the key to unlocking new growth opportunities in a region where SMEs represent the vast majority of businesses.

The journey to flexo began with a simple observation about market gaps.

‘In Southeast Asia, more than 85 percent are small and medium enterprises,’ explains Michael Tsoi, CEO of Shrinkflex. ‘This is the biggest market. Everybody has already forgotten this market, and everybody’s using stickers or pressure-sensitive labels for the medium market.’

Strategic market positioning

The mathematics of this market opportunity are compelling. While multinational companies dominated the high-volume gravure segment and digital printing served short-run needs, a substantial middle market remained underserved. This segment requires medium-volume runs with cost-effective pricing; precisely the opportunity that drew Shrinkflex into flexible packaging three years ago.

“Flexo printing technology focuses on delivering cost-effective approaches to SME clients as well as building customer confidence toward environmental consciousness”

The challenge for SMEs has been economic rather than technical. Gravure printing requires expensive cylinder setup costs that only make sense for large-volume runs, while digital printing becomes expensive for medium-volume orders. Flexo printing bridges this gap with faster setup times than gravure and better economics than digital for medium runs.

‘Flexo printing technology focuses on delivering cost-effective approaches to SME clients as well as building customer confidence toward environmental consciousness,’ notes Tsoi.

The Nilpeter FA-22 installation comes as part of Shrinkflex’s investment strategy, which totaled 83.8m Thai Baht (2.58m USD) in 2024. The flexo press joins other new equipment, including plate-making machinery and pouch bag-making machines, all designed to enhance the company’s production capabilities and serve diverse customer needs.

This investment represents the latest phase in Shrinkflex’s aggressive expansion program. Over the past three years, the company has invested 188.6m Baht (5.8m USD) in machinery alone, building production capacity that now includes 175.5m meters per year of gravure printing capability and 4.5m meters of digital printing. The flexo addition creates synergies across all three technologies while opening new market opportunities.

Danish partnership deepens

The relationship between Shrinkflex and Nilpeter extends well beyond a simple vendor-customer arrangement. The Thai company has designated its facility as an ‘open house’ location, welcoming both national and international visitors to witness its operational excellence of one of Southeast Asia’s most successful packaging companies.

‘This relationship is not just enduring; it’s evolving and strengthening,’ says Erik Blankenstein, sales director of Nilpeter Asia Pacific. ‘The collaboration extends beyond business transactions, involving strategic cooperation concerning technological developments.’

Shrinkflex’s decision to partner with the Danish press manufacturer stems from Nilpeter’s century-long heritage in the printing industry.

‘We chose Nilpeter because they have 100 years of reputation and history in Denmark,’ Tsoi explains. ‘We are happy with the Danish sincerity of the people. We trust we can make a partnership with Nilpeter.’

Comprehensive technology strategy

For Shrinkflex, the addition of flexo printing completes a comprehensive technology portfolio addressing different market segments: gravure for high-volume mass production, digital for short runs and personalization and flexo for the crucial middle ground serving SMEs. This three-pronged approach creates synergies across technologies while also opening up new market opportunities.

‘Our collaboration with Nilpeter is not just about adding a press to our floor,’ Tsoi emphasizes. ‘It’s a strategic alliance that brings technological innovation to the forefront. The Nilpeter FA-22 flexo press stands as a symbol of our commitment toward increased automation and digitalization, driving us forward in the competitive packaging industry.’

The flexo addition supports multiple strategic objectives simultaneously. Beyond addressing the SME market gap, the technology offers environmental advantages through reduced carbon emissions compared to traditional gravure printing. The company has focused on UV LED technology, which reduces energy consumption and carbon emissions compared to traditional UV systems.

Shrinkflex’s broader commitment to sustainability includes joining SEDEX in 2024, a global platform for sharing ethical supply chain data, and obtaining SMETA 4 Pillars certification covering labor standards, health and safety, environment, and business ethics. The company also participates in environmental initiatives, such as the Care the Bear and Care the Whale projects, while disclosing its annual carbon footprint information. These initiatives demonstrate how the flexo investment aligns with comprehensive ESG objectives rather than representing an isolated equipment decision.

Market expansion strategy

The timing of Shrinkflex’s flexo investment aligns with broader industry trends favoring sustainable packaging approaches and the continued growth of e-commerce, which has increased demand for smaller, customized packaging runs. The company sees significant opportunities in helping local businesses expand into export markets, where smaller initial orders are often required to test international waters. Export market development represents a particular strength for Shrinkflex. The company’s digital capabilities have proven successful in this area, creating a pathway where customers use short runs to establish market presence before scaling up.

‘We use digital to help our customers explore the market, and then they come back with big volumes to gravure,’ explains Tsoi. ‘So, we are very successful with digital. Every month, we have many new projects, therefore, digital and gravure continue to increase.’

The flexo press strategically fills the gap between these technologies, offering better profit margins than digital while requiring lower setup costs than gravure. This positioning attracts medium-run jobs that were previously either too expensive for digital or too small for gravure while enabling faster turnaround times that brands increasingly demand from packaging providers.

Regional leadership ambitions

Shrinkflex’s flexo investment supports its vision of leading Southeast Asia’s packaging industry with smart and sustainable approaches. The company achieved revenue of 978.8 m Thai Baht (30.14 m USD) in 2024, representing 6.4 percent year-over-year growth, with an ambitious target of exceeding one billion Baht in revenue for 2025.

This growth reflects the successful diversification strategy execution. While gravure shrink labels dominate at 89.8 percent of revenue, flexible packaging has grown to 3.3 percent, digital shrink labels account for 4.3 percent, and gravure cylinders contribute 2.3 percent. The flexo addition creates new revenue streams while strengthening existing business lines across beverages, cosmetics, household products, personal care, pharmaceuticals and food products.

‘Our vision is to lead Southeast Asia’s packaging industry with smart and sustainable approaches,’ states the company’s mission. The flexo installation directly supports this goal by providing technology that balances cost-effectiveness with environmental responsibility.

Open house concept

Perhaps most significantly, Shrinkflex’s role as a Nilpeter open house facility positions the company as a knowledge hub for the regional printing industry. This arrangement benefits both partners: Nilpeter gains a high-profile showcase for its technology in a key Asian market, while Shrinkflex enhances its reputation as an industry leader and innovation center.

“Our collaboration with Nilpeter is not just about adding a press to our floor. It’s a strategic alliance that brings technological innovation to the forefront”

The open house concept allows other printing companies to observe real-world applications of flexo technology, potentially accelerating adoption throughout the region. For Shrinkflex, hosting these visits reinforces its position as a thought leader and can lead to valuable industry connections and partnerships.

This educational role aligns with Shrinkflex’s industry leadership aspirations. As one of Southeast Asia’s most successful packaging companies in terms of revenue and growth, the company has a significant influence on regional industry development. The open house facility demonstrates practical applications of multi-technology printing strategies adaptable to various market conditions, while creating opportunities for collaborative technology development where Shrinkflex participates in strategic cooperation concerning technological developments, potentially influencing future Nilpeter innovations for Asian market requirements.

Future outlook

The Nilpeter FA-22 flexo press represents a strategic tool for capturing market share in an underserved but substantial customer segment. Shrinkflex’s comprehensive three-technology approach positions it to serve virtually any customer requirement while maintaining operational efficiency.

The company’s 2025 strategy encompasses four key areas: enhancing efficiency through growing orders, staying ahead through premium products, optimizing production and managing costs efficiently to drive profitability. The flexo press contributes to all strategic pillars by enabling new customer acquisition, offering premium flexible packaging options, optimizing production through technology diversification and improving cost management through better capacity utilization.

This flexo initiative could influence broader regional industry trends, where many printing companies have traditionally focused on either high-volume gravure work or small-run digital jobs. Shrinkflex’s demonstration that flexo can profitably serve the middle market may encourage other regional printers to adopt similar strategies, potentially transforming SME access to professional packaging printing that was previously out of reach.

Looking ahead, Shrinkflex’s public company status provides additional advantages in executing growth strategy through transparent financial reporting and governance structures that build customer confidence while providing capital market access for future expansion. The successful flexo integration could support additional investments in capacity and capability expansion throughout Southeast Asia.