Avery set to expand Japanese operations

Avery Dennison has made a major commitment to the Japanese pressure-sensitive label market with the opening of its first distribution center in the country and the appointment of a new president for its combined Japanese operations. The distribution center will be located in Chiba and use the Chiba port for distribution. The 2,000 square meter facility, representing an investment of some USD $5 million, will include a special applications and testing facility. Materials imported from Avery Dennison’s coating plants in China and Korea will include a standard range of paper VIP/product ID labels as well as higher quality filmic products.

Speaking at the Label Forum Japan, Avery president and CEO Dean Scarborough (pictured) also announced the establishment of an Avery Dennison Japan headquarters office in Tokyo. The new organization will be led by Gary LePon, who becomes president and general manager Avery Dennison Japan. A former executive for AB SKF in Yokohama with extensive business experience in Japan, LePon will oversee the company's expansion efforts and spearhead the development of new partnerships and strategic alliances.

‘With so many manufacturing facilities in nearby countries, we believe now is the time for us to significantly increase our investment and presence in Japan,’ commented Dean Scarborough. ‘Our strategy and investment in Japan will enable us to serve several important constituencies in one of the most important and vital economies in the world and help them grow not only in Japan, but in other global markets.’

In particular, Avery Dennison’s move will allow the company’s global customers, such as Procter & Gamble and Unilever, to access in Japan the same Avery products they use elsewhere in the world. ‘Avery Dennison has worked closely with these customers to develop packaging solutions that help market and differentiate their products, but these solutions have been limited in Japan to the products they import,’ said Dean Scarborough.

Another important target group is Japanese-based companies with global operations, such as Toyota and Sapporo. ‘Avery Dennison's close proximity to their offices will enable it to work closer with them to develop worldwide solutions that can be applied in all of their facilities.’

Andrew Crawford, marketing director Roll Materials Asia Pacific, pointed out that Japan has a relatively low consumption of PS materials compared to other advanced economies – around 8 square meters per capita compared to 11 square meters for North America, for example – which means there are significant opportunities for PS growth against competitive packaging formats. Another sign of the growth opportunities in the Japanese market has been CCL’s announcement of a new label converting plant in the country.

Dean Scarborough said there were opportunities to grow Avery’s business not only in the pressure-sensitive label arena in Japan, but also in RFID and Retail Information Services. The RIS division is looking to work with retailers who source outside Japan – for example in China and Bangladesh – providing design and sampling services.

Avery will also seek to work in partnership with Japanese-based companies that have significant Asian market share or special technologies, but lack a market presence outside of Asia. ‘Avery Dennison intends to form partnerships and strategic alliances with these enterprises that will allow them to access the company's global resources and infrastructure to grow their businesses in Asia and expand into new markets,’ said Scarborough.

Avery Dennison had a strong presence in Japan back in the 1990s, when it had a joint venture with Toppan-Printing Co. Ltd. Avery sold its stake in 1996 as part of a global strategy to exit the label printing business.