Globalization a reality in Mexico City

Along with labels industry guru Mike Fairley, I recently had the pleasure of chairing the first Latin America Labels Summit in Mexico City, organized by L&L publisher Tarsus Group. More than 650 label printers attended from all across South America, making it one of the biggest label conferences I have chaired in over seven years working for Labels & Labeling. If you add in industry suppliers who had information booths and local journalists there were over 800 people present.

And you can see why. On the first day a series of presentations showed the very high rate of growth in the labels industry in not only in Mexico, but  throughout the Latin and South American region. Some estimates put this growth at up to 14 per cent across all label technologies, which is a similar level to  Eastern Europe and Asia-Pacific.
There are good structural reasons for this growth outside the 'core' label markets of Western Europe, North America and Japan, where growth remains pretty static across the industry as a whole (although certain materials such as pressure-sensitives and unsupported film continue to show strong growth). The labels industry is at the very center of the raging hurricane we call 'globalization'.  As trade barriers come down across the world, driven by the World Trade Organization and a growing number of bi-lateral free trade treaties, it becomes easier for international investment funds to move freely around the world, and it makes the job of launching global brands much easier.
For brand owners - including now the big retail groups with their private, or own brands - this opens up the opportunity to dramatically reduce their costs by outsourcing production from the 'core' areas to the developing regions, where labor and other costs of production are cheaper, but where there is a potential reservoir of highly skilled labor and good infrastructure to deliver products to a regional or global market.

Mexico is a classic example. It has free trade agreements with the EU, it is a member of the North America Free Trade Area (NAFTA) and at the center of a web of trade agreements with Central and Latin American trading partners. This makes Mexico a prime target for investment by global brand owners, both to access the Mexican domestic market, and as a base for moving into South and Latin America.

At the same time Mexico has an established printing industry which provides a firm technical base to meet the global quality standards of the major brands, and the industry as a whole is looking to move up to the next quality level by investing in the latest press technology and materials. That was the clear message of the Mexico City Labels summit, where Nilpeter, for example, announced the sale of three presses despite the fact that no machinery was present at the mini-exhibition. Similar feedback came from all the exhibiting companies.

At the conference, all presentations were at the highest technical level. Indeed, totally new products such as transparent holographic films were introduced first to Mexican printers ahead of their launch at Labelexpo Chicago in September.

As Mike Fairley made clear in his closing address, these 650 printers are now armed with the same level of knowledge as label converters in North America. From the range and depth of questions asked by delegates on subjects as diverse as RFID, digital printing and servo-driven press technology,  it is clear they can see the opportunities now opening up for them by a globalized market. - Andy Thomas