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A resilient industry

Materials manufacturers are making deep cuts in their global workforce; press sales, in the words of one manufacturer, have 'fallen off a cliff' and there has been a steep fall in the volume of pressure-sensitive labelstock sales.

But what is truly extraordinary is the resilience of this industry. Rotoflex has been snapped up by Mark Andy/MAI, and CEO Paul Brauss says the company will honor the deposits taken for Rotoflex machines before the acquisition. There is no legal obligation on Mark Andy to do this, but it is the honorable course of action, and already the company is reporting its first new orders. Gidue's Federico d'Annunzio says all press orders taken before the company was liquidated will be fulfilled through his new vehicle, Gidue-Nuova Castagnoli.

If we look at converters, while business has been hit hard, there has not yet been the surge of liquidations we have seen in other industrial sectors. L&L has seen many cycles of downturns and recessions in its 30-year history, and the pattern has been similar. Consumers still require similar volumes of pharma, food, household, personal care and beverage products - although there may be a migration to 'value' brands - and these goods still need to be shipped. End users run down existing inventories, but will replenish them. And as the upcoming Tarsus Digital Label Summit will show, the recession opens up new possibilities to work with retailers on short run, targeted promotions.

What is different in this recession is the drying up of credit lines for new machinery. This, clearly, is outside our control as an industry. We will just have to see what the world’s politicians can do to force the banks to start lending again.

ABOUT THE AUTHOR

Andy Thomas is strategic director of Labels & Labeling.

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