Russia Label materials business booming
The “other” half of Europe gets relatively little media coverage here in France, particularly during a run-up to a presidential election. But for anyone in the label or packaging business, Eastern and Central Europe is where the action is. Poland was the only country in Europe never to have been in recession over the past five years, and now that China is looking less like an El Dorado for brand owners seeking low-cost production sites, Poland could well be 2012’s flavor of the year. Major international label converters like CCL and Skanem bought or built plants there a decade ago, and UPM Raflatac chose Poland for its coating plant, opened in November 2008.
Trade exhibitions have had a bad couple of years, but label shows seem to be pretty good bet, to judge by the success of the Labelexpo series in Brussels, Chicago and elsewhere. It is all the more surprising that the Moscow label show Etiketka, launched to great acclaim in the mid-1990s, has breathed its last. The show was never quite the same since it was moved from the modest, bucolic exhibition halls in the Sokolniki Park to the brand new, gargantuan Crocus site. When your correspondent last visited the show three years ago, the Crocus Centre was not connected to the subway system, and took nearly two hours by car or bus from the center of town (Moscow’s traffic jams are horrendous). The show’s organizers’ other mistake, in retrospect, was to encourage label converters to take space. This increased the number of booths and boosted visitor attendance, but profoundly altered the nature of the show, making it less attractive for those label equipment manufacturers who form the backbone of the exhibitors at Labelexpo events. Finally, the Moscow label show was brought to its knees by the increasing popularity of the Brussels show, which meant that Russian label converters preferred to hop on a plane to Belgium and see all the label equipment providers rather that brave the Moscow traffic and see just some of them.
The Russian market, nonetheless, is now once again up and running (after a dizzy downswing in 2009). Pepsico Russia for example reported 2011 net revenue growth of 160% year-on-year to $4.95 billion. In 2011 retail sales in Russia increased 11% by value, with more SKUs and an emphasis on trading up to more luxurious packaging. This trend is feeding straight through to the label sector, with Gallus reporting ten presses sold in Russia, and Mark Andy nine. Geographically, growth in the Russian label business is spreading away from the Moscow and St Petersburg areas which are becoming saturated, and towards the farther flung provinces, and in particular the newer industrial centers like Rostov, Kazan and Volgograd (ex Stalingrad). Barring unexpected upheavals – and Russia’s once-and-future president Vladimir Putin is good at discouraging these – business prospects there look promising. With crude prices hitting $120 per barrel with worse to come, Russians, knowing their country exports 10 million barrels per day of the stuff, can laugh all the way to the bank. Another example of the old adage that it’s an ill wind that blows nobody any good.
Russia of course is only one part – admittedly a big part – of the former USSR, and the latest Brussels Labelexpo saw a big increase in visitors from Ukraine, Belarus, Kazakhstan and even the Moldavian Republic. L&NW readers with a taste for adventure might like to note that several label equipment makers intend to exhibit in October 2012 at PackTec in the Uzbek capital Tashkent, which also hosted the International Packaging and Printing show in April of this year. The even more adventurous were probably attending the Digital Print Trade Fair in the Belarus capital Minsk in April, or planning to go to the Poligrafia show in Kiev in September, which will contain a separate label section.
From Internet
