- December 10, 2001, PRESS RELEASE
RONKONKOMA, NY, USA—North America's 6,000-plus flexographic printing establishments will produce in excess of $85 billion (US) of printed work in 2002. That's the Flexographic Technical Association's best estimate and is part of the organization's business-based analysis that was presented to the FTA's board of directors in early December.
According to the FTA, the volume will be spread across several distinct market segments: flexible film packaging, paper bags and multi-wall sacks, labels and tags, corrugated/preprint, folding carton, envelopes, and newspapers. Reports FTA president Mark Cisternino, "Forecasts within the food packaging and pharmaceutical marketplace continue to show strong growth expectations. Ongoing developments in flexible packaging substrates and converting-application technology have continued to the healthy market gains of the past few years and will continue to do so in 2002."
FTA says the growth across the flexo industry will outpace the performance of the Gross National Product (GNP), coming in somewhere between four and five percent, as compared to the slightly less than two-percent improvement expected as listed in the US government's benchmark index. In 2001, says the assn., the flexo printing business grew by approximately six percent, and now controls 74% of the North American package-printing market, as well as 24 percent of the worldwide printing and publishing market.
Charting the Trends
Cisternino notes, "A major trend toward cost reduction throughout the flexographic production process has been necessitated, due to the heightened demands being put on printers by consumer product companies to maintain or reduce pricing levels in order to keep the business. In 2002, management looks for continued product development and evolution that will allow converters to enjoy the productivity improvements that are necessary to drive the ongoing market growth through the realization of technological advancements and process improvements.
He continues: "The increasing trend toward incorporating digital-imaging technology within the prepress arena and the use of thinner, digitally produced printing plates and sleeves has allowed printers to achieve better and more consistent quality. Advancements that have been occurring in substrate technology are contributing to the migration of print jobs from offset, letterpress, and screen over to flexo. Whether it is stand-up pouches, in-mold labeling, thinner flute/higher quality corrugated board or fiber substitutes for the traditional envelope, the flexographic process remains best suited to utilize these new substrates in enhancing the value that the end product offers to the consumer."
Market Segments Studied
Corrugated/preprint production will lead all flexographic business segments in terms of the value of product produced, according to FTA research. Revenue should total $29 billion (US), representing 34% of the industry’s volume. Some 1,400 facilities produce flexographically printed corrugated boxes and preprinted linerboard within North America. FTA’s corrugated converter members report they're being forced to provide additional services and meet increased demand for shorter delivery cycles and enhanced graphics at the same time that they maintain a competitive cost structure.
Flexible film packaging will lead all sectors in terms of percentage of growth charted in 2002, the FTA reports. Volume is expected to amount to $20.4 billion, representing growth of 3.5 percent to 4 percent over 2001 levels. Flexible film packaging will control 24 percent of the flexographic printing market. Some 950 North American printers/converters engage in the process. They have indicated flexible packaging will continue to gain market share as it replaces rigid containers in current product lines and is identified as the most viable option for new products. Above average growth levels are being credited to continued utilization of new substrate structures in the soft drinks, beer, and food categories.
The folding carton sector represents a tremendous opportunity for flexography, the FTA reports. At present, less than one-quarter of all output is printed flexographically and 125 plants produce the materials. Still, the sector represents 19.3% of flexographic printing revenues, with 2002 business expected to translate to $16.5 billion (US).
UV Inks, In-Line Ops, CTP
Utilization of UV inks and increased reliance on flexography’s in-line converting capabilities continue to influence migration of business away from offset and gravure and toward flexography. Increased reliance on computer-to-plate (CTP) technology has resulted in significant enhancements to tonal range and detail rendition that aligns well with needs dictated by low production runs.
North America’s 3,000-plus label printers saw volume grow by 3 percent to 4 percent in 2001, but increased competition and tight operating budgets contributed to a small erosion in margins. Revenue is estimated at $10.5 billion in 2002, an estimated 12.3 percent of the flexographic printing business. New labeling regulations in the pharmaceutical industry, soon to take effect, definitely will drive growth. FTA forecasters are predicting a return to historically higher levels of 5 percent or better within one year’s time. Converters that utilize digital technologies increasingly claim that their ability to produce short-run work quickly, with excellent results, has been enhanced.
Envelopes, Bags, Sacks
Envelope shipments will remain sluggish through the majority of 2002. Revenue is forecasted at $3.8 billion. Volume growth will approximate 1 percent. Some 260 converters print envelopes flexographically. Work turned out represents 4.5 percent of flexographic print volume. Paper bags and multi-wall sacks are seen as a flat market segment for 2002. Revenue will remain at the $3 billion plateau and account for 3.5 percent of the flexographic printing market.
Flexo-Printed News on Rise
The number of newspapers printed flexographically continues to rise and now stands at 45. Revenue approximates $2 billion in this segment and accounts for 2.4 percent of the flexographic printing industry volume. Daily newspapers that recently converted to flexo include The Lincoln Star Journal, Lincoln, NE; and The Boston Herald, Boston, MA.
Visit the FTA at flexography.org.