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What is packaging? Europe faces tough times over label waste.

The European Union's latest Directive on Packaging and Packaging Waste imposes penalties on converters and end users who fail to reduce or recycle their packaging. However, not everyone agrees on what constitutes packaging, and in particular whether release liner for pressure sensitive labels falls within the scope of the directive. Most national governments have so far dithered, much to the relief of their label industries. But Britain, where the ecology movement is particularly vocal, has decreed that liner is an integral part of the Label, and hence is "packaging" in the terms of the directive.

The British situation could pose problems for the UK's label industry, says a recent report, because "it will make a huge difference to the amount UK label converters will have to pay. If the new definition continues to apply to the UK alone then they will be at a serious competitive disadvantage to the rest of Europe." There is no doubt that pressure could grow for harmonization of the new definition of release liner waste across Europe, which would mean substantial extra costs to be met by label end users (who will smilingly "invite" their label suppliers to pay their share). Just to put the problem in perspective, in Europe liner waste alone amounts to some 250,000 tons per year. As a material it is recyclable, but the silicone coating plus frequent traces of adhesive make it unattractive for many recycling solutions. Dutch recycling specialist Jacques van Leeuwen has for many years taken a pro-active approach to label waste recycling, but admits that so far he has been shouting into the wind. It is clear that so long as there are no legal sanctions to encourage innovative packaging recycling, incineration and landfill will remain the least costly solutions.

The label association FINAT has also, surprisingly, decided to step back from actively promoting new waste solutions for liner and matrix waste, but will merely "serve the passive information needs of its members." However, the association will continue to participate at the political level in the European Recovered Paper Council, and has given its support to a scheme to turn used release liners into paper hand towels.

Shall they beat their liner into decking?

Major labelstock manufacturers meanwhile have all seen the writing on the wall, and have no wish to be found wanting. UPM Raflatac must surely get high marks for its RafCycle and ProFi initiatives (as reported in L&NWs July/August issue). The new service now being tested, called RafCycle, involves collecting waste from label printers to be utilized in the production of UPM's new product, UPM ProFi. This is a wood-plastic composite material used to make decking, reusable containers, pallets and flooring.

What UPM Raflatac doesn't say is whether the new material can compete in quality and cost with existing building materials. However, the fact that UPM is opening its second wood-plastic composite factory in Europe later this year is at the very least an indicator that the project is more than just an ecologist's pipe-dream. Already, Raflatac is talking of launching both UPM ProFi and RafCycle on the North American market.

Eastern underwear

The British clothing retailer Marks & Spencer (M&S), affectionately known as Marks & Sparks, is a pioneer in using RF1D labels to move stock more easily through its supply chain. (A few years ago M&S caused consternation to the British expatriate community when it closed all its stores in continental Europe, leaving many, including your correspondent, with no idea where to buy their underwear.) Now comes the news that the group is opening outlets throughout Ukraine, so that shoppers from Odessa to Dnepropetrovsk will soon be smartly dressed by M&S, with the ubiquitous RFID labels to ensure they get the right fashion goods at the right time.

A roll call of prestigious brands

While Ukraine is welcoming Western apparel, Russia and other Eastern European countries continue to see an influx of factories making fast-moving consumer goods, and not just in the major population centers. This year, French-based Carrefour--the world's second biggest retailer--has opened two more supermarkets in provincial Russian towns. (Russia as a whole added 10 million square feet of shopping malls in 2007, with over 60 million square feet planned for 2008-2009.) Kellogg's acquired no fewer than six production plants in Russia. Pepsico, after a major acquisition, announced that Russia is now its biggest growth market, while Eastern Europeans who prefer something more alcoholic can take comfort in the fact that the world's biggest brewer, Inbev, future owner of Anheuser Busch, sold 22 million hectoliters of beer in the region in the first quarter of this year. All this Eastward movement of major brands helps to explain the phenomenal rise in label consumption throughout the Eastern European region, and particularly in Russia. This sharply rising trend was not reflected in the turnout for the Russian label show Etiketka (See coverage on page 68) which, although well reviewed by many exhibitors, was substantially smaller than the previous Moscow show two years ago.

Cheaper chips

Electronics will do away with paper, and printers will go the way of the blacksmith--that was the conventional wisdom a couple of decades ago. You have only to look around your shopping mall (or your desk) to realize it hasn't quite worked out that way. And the RFID label, which was to transform the labeling industry, hasn't--yet. Now comes news of a research project at the New University of Lisbon, Portugal, which could revolutionize the whole field of printed electronics. Silicon-based transistors are powerful, expensive, and rigid. That makes them ill-suited to labeling low cost items like washing powder. The Portuguese project replaces the silicone by a simple sheet of paper coated both sides with semi-conductors made of various oxides. This, say the researchers, gives a transponder which is both cheap and flexible--and ideally suited to further printing or finishing on roll-to-roll machinery.

The Lisbon team is not the only one in Europe to develop printed electronics. Germany's PolylC is a commercial company with powerful financial backing (it is jointly owned by Siemens and hot foil specialist Leonhard Kurz). PolylCs tags are printed onto a PET substrate and use a 13.56MHz wavelength, and the company, which gets support from the German government, looks well advanced on the road to a commercial roll-out of its technology. So far trials have been made using the new tags in a range of transport tickets, labels and security documents. Experimental use of the technology for baggage labels was tried out by Lufthansa but rejected as not sufficiently secure.

It is difficult for the layman to evaluate rival technologies in the printed electronics field. However, given that PolylC is now two years down the road from its first successful testing of a non-silicone transponder, it could well be first in Europe with a fully tested, high volume, low cost RFID tag.

Meanwhile things are not standing still in Europe with the "classic" silicone-based RFID tag. Metro Cash-and-Carry stores, in partnership with DHL, now use RFID tags for all pallets delivered to its 89 stores in France, a volume of 1.3 million units per year. Both Metro and DHL are members of the European EPC Competence Center for the development of RF technology.

Labelstock production in Germany

Sandwiched uncomfortably between global market leaders and small, highly specialized producers, Hernia is a medium sized labelstock manufacturer producing some 700 million square meters of product per year, and selling almost entirely in Europe. At its main plant in Stuttgart the company recently inaugurated its new two-meter wide coating line, modestly described by Herma CEO Sven Schneller as "the most up to date in the world."

When the new line was nearing completion in 2007 the company went on record as saying the extra capacity would enable it to burst through its production ceiling and capture new markets. That was before the current crisis had everybody revising their sales estimates downwards. It might take some aggressive salesmanship--and/or price cutting-to keep the new line fully occupied.

An inclination to Port

Portugal's second city, Oporto, is the heart of the Port wine industry. Gone are the days when Port was a vintage luxury consumed by Oxford professors and retired officers in London clubs. Today this export-oriented industry has annual sales of half a billion dollars, and is marketing itself worldwide as a trendy drink for all seasons.

Labels, of course, are a key part of this promotion, and label converter Vox Artes Graficas claims to have a 90 percent share of the market. Vox aims to turn out quality labels fast, using mainly three HP Indigo digital presses and nine Gallus combination machines. This battery of equipment, along with screen, embossing, and foil stamping machinery, enables Vox to respond rapidly to new orders. (Most local wineries have very limited storage and produce many different qualities.) With an average of nearly 100 orders each day, Vox uses computer-controlled production planning, process control, plus a track-and-trace RFID system to keep tabs on every order.

European patent awarded

Montreal based manufacturer ETI Converting has now received a patent covering all 27 European Union countries for its "Labeline" equipment, which, in a single inline process, can print onto unsupported film, then add adhesive, silicone and liner plus diecutting to produce a finished roll of printed, self-adhesive labels. France's second biggest label converter is said to have ETI machines in each of its plants, as does leading Spanish PS label converter Germark, and Russia's number one, Okil Label.

FINAT and Russia

The Europe based label association is also extending a hand to Russian label printers, hoping to enroll them as members and to encourage them to attend the next FINAT congress in Antalya, Turkey. "We provide the means for all parts of the self-adhesive label industry to get together to discuss mutual problems, encourage trading links and identify emerging trends, set world-class technical specification standards, organize technical seminars to explain new techniques and methods, and encourage better management of their companies," says FINAT Managing Director Jules Lejeune. "Russian printers can obtain these benefits through the value of FINAT membership, which has already been recognized in the Far East."

Business booms in Balkans

Most machinery suppliers have fought shy of the Balkans over the past decade. Wars, ethnic cleansings and corruption have grabbed the headlines ever since the breakup of Yugoslavia in 1990. But Italian narrow web press manufacturer GIDUE, in partnership with Slovenia-based Simark, has since Labelexpo 2007 installed no less than five label presses in Slovenia (two to Fleksotisk Logar, one to Tenova and one to Radece Papir), and one to Kiro Dandaro Company in Macedonia.

With sales prospects looking bleak in Western Europe, this latest piece of news may offer some comfort, but probably not much, to Europe's hard-pressed label equipment suppliers.
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Title Annotation:NARROW WEB EUROPE
Author:Penhallow, John
Publication:Label & Narrow Web
Geographic Code:4EUUK
Date:Nov 1, 2008
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