‘Will 2009 end better than it started?’ asks FINAT

Signs are emerging that the economic recession is bottoming out, as far as self-adhesive labels are concerned – but the European industry could face the prospect of a seven percent fall in output in 2009. However, the performance of the industry during the present (second) quarter of this year will be crucial in determining the actual level, FINAT managing director Jules Lejeune told delegates at the organization’s annual Congress in Antalya, Turkey. He expects a ‘significantly’ improved picture in a year’s time.
 
Drawing a true picture of the effects of the recession on the basis of the first quarter is difficult because year-on-year comparisons give a false picture: the first half of 2008 was buoyant, albeit decelerating, which exaggerates the double digital fall in year by year comparisons.

‘We cannot take these figures as indicative for the year as a whole. Assuming that demand for labelstock will remain the same as in the first quarter of 2009 that would give us a decrease in output of around seven percent overall for 2009, compared with the 5.35 billion square meters consumed in 2008 all over Europe,’ Lejeune said.
 
Only the Central European area showed a positive growth in sales in 2008 – and then only by a marginal 0.1 percent – with the UK and Ireland seeing sales fall by 8.3 percent, Southern Europe seeing a 3.2 percent fall, Scandinavia going down by 2.7 percent and Eastern Europe receding by two percent. On balance, in spite of a positive first half, labelstock demand for all regions and products concerned in Europe declined by 2.8 percent in 2008.
 
Paper roll labels, which account for 70 percent of the market, took bigger hits than their non-paper equivalents. Falls in paper roll sales last year were 12.1 percent in the UK and Ireland, 4.7 percent in Scandinavia, 4.5 percent in Southern Europe, 1.7 percent in Central Europe and one percent in Eastern Europe. Non-paper rolls sales only saw a 0.5 percent decrease in Eastern Europe, with Scandinavia seeing a 7.2 percent increase, the UK and Ireland improving by 5.2 percent, South Europe up by 2.8 per cent and Central Europe improving by 1.5 percent.
 
Across Europe, 2009 started badly with an 11.2 percent regression in non-paper rolls and a 10.5 percent loss in paper roll output in the first quarter. Overall labelstock demand (rolls as well as sheets) declined by 12.1 percent over the same period of 2008.
 
While Lejeune anticipates a seven percent fall in 2009 (based on an assumption that the three remaining quarters will show no change), he stresses that only time will tell the extent of negative growth. In the first quarter of 2009, regional variances showed Scandinavia receding by only 2.1 percent but Southern Europe taking a 16.1 percent hit. Central Europe went down by 9.3 percent, Eastern Europe saw an 8.6 percent fall and the UK and Ireland were 5.1 percent worse off.
 
He added: ‘The positive news is that having reached rock bottom there is no way but up. I am convinced that the dynamic entrepreneurial and innovative spirit that has always characterized this industry will be instrumental in eliminating the present doom and gloom and that I will be able to present a significantly different outlook 12 months from now.’

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