Decade of growth continues for self-adhesive labels

European consumption of self-adhesive labels increased 3.2 per cent last year to total 4,905m square meters in 2005 - which represents a 72 per cent growth over the last ten years, FINAT members were told at their annual Congress in Warsaw. The organization is forecasting an overall 5.8 per cent growth this year with Eastern Europe continuing to show the greatest year on year improvement in demand.

FINAT, the trade association for the self-adhesive label makers, has commissioned an independent research agency to compile its statistics from the eight largest manufacturers who comprise 85 per cent of the industry and believes its projections are a valid picture for the market as a whole.

Mr Jules Lejeune, FINAT's managing director, revealed that growth in the paper roll sector, which is nearly 75 per cent of the business, was up in 2005 by five per cent although filmic material roll output was up by 13 per cent - and is now 2.5 times greater than it was in 1996. Output on paper sheets slumped by 4.5 per cent and on filmic sheets was down by 2.4 per cent.

The organization’s statistics show some startling differences in the amount of self-adhesive labels passing through the public's hands in different parts of the continent.  In the UK and Ireland this per capita consumption is now more than 14 square meters of labels per person per year whereas in Eastern Europe individuals will only handle about two square meters of labels on the products they buy.

However this region is only just starting to appreciate the benefits of self-adhesive and last year showed the greatest label sales increase - of 12.6 per cent - while in the UK and Ireland, label sales fell by 1.4 per cent.

On the same basis, consumption in Central Europe and Scandinavia was just under 12 square meters per person - which represents a 5.1 per cent growth in the former region but 1.4 per cent decline in the latter. Southern Europe, with just over six square meters of labels per person, showed a 2.4 per cent sales growth.

Only the UK and Ireland showed a decline in the use of paper roll labels, down by 2.3 per cent whereas Scandinavia showed a marginal 0.2 per cent increase, Southern Europe a 0.6 per cent improvement, Central Europe a 3.9 per cent growth and Eastern Europe a massive 14.3 per cent improvement - which, said Mr Lejeune, demonstrated how fast that region was coming into line with the rest of the continent.

In the non-paper roll filmic sector the growth rates were: Scandinavia - 0.8 per cent; UK and Ireland, 3.2 per cent; Southern Europe, 11 per cent; Central Europe, 12.6 per cent; and Eastern Europe, 23.2 per cent.

The performance of the paper sheet market showed a mainly negative trend with Southern Europe improving by just 0.5 per cent, Eastern Europe having a 0.9 per cent decline, the UK and Ireland a 3.4 per cent drop, Central Europe a 4.9 per cent fall and Scandinavia a massive 43.6 per cent retreat.

Non-paper sheet performance was totally negative with falls registered in each region: Southern Europe -5.3 per cent; Scandinavia -6.7 per cent; UK and Ireland -7.8 per cent; Central Europe -23.4 per cent; and Eastern Europe -25.2 per cent.

Business sentiment, which tended to fall in 2005, has shown a marked improvement since the second half of that year with label converters, material suppliers and labelstock demand all indicating improved performances.

His forecast for the whole of 2006 is for improvements of four to five per cent on paper rolls, 15 to 15 per cent on non-paper rolls, one to two per cent on paper sheets but a drop of ten to 12 per cent in the use of non-paper sheets, making an overall total improvement for the year of 5.5-6 per cent.

Geographically, Eastern Europe would continue to show the most growth with more than 15 per cent improvement, Central Europe up by six to seven per cent, Southern Europe expanding by four to five per cent, Scandinavia having a three to four per cent improvement while the UK and Ireland would retreat by almost one per cent.

Mr Lejeune described year-on-year performance since 2003 as ‘erratic’. Events in the first quarter of 2006 showed that growth in GDP across all 25 member EU states was up by 2.2 per cent fuelled by greater household consumption, domestic demand and exports but energy price increases are pushing up industrial producer prices which are now 6.6 per cent higher than a year ago.

‘It is a mixed picture, country by country, with Germany and Spain showing a substantial improvement in May, France and Italy remaining flat and the UK producing a significant deterioration. The overall economic confidence indicators published by Eurostat point at improved production expectations, slightly more negative assessments of order books and unchanged views of stocks of finished products,’ he added.