Reporter Clips

Published: April 30, 2005, By Edward Boyle, Contributing Editor

Narrow Web Converting Industry News

PSA materials supplier MACtac, Stow, OH, supplied the self-adhesive construction for the 170 million commemorative stamps issued by the US Postal Service in honor of 40th president Ronald Reagan.

As a qualified supplier for USPS stamps, MACtac has provided materials for many p-s commemorative stamps.

Label Converters at TLMI Anticipate Waves of Change
LOS CABOS, MEXICO—Converter members of the Tag and Label Mfrs. Inst. learned in a relaxed atmosphere how "waves of change" can offer "oceans of opportunity"—the theme of this year’s meeting at the Marquis Los Cabos Resort March 2–5. Chair Michael Ritter of Superior Business Assoc. planned a cohesive program, leaving attendees with useful information they could implement.

Discussing Differentiation
Dick Gorelick of the Graphic Arts Sales Foundation kicked off the meeting with a presentation on "Differentiation: Creating Value for Your Customers." Today, pricing pressures are intense, retailers often adopt a seasonal approach to sales, there is little customer loyalty, and many converted materials have been commoditized. Therefore, says Gorelick, the route to success is through differentiation that will allow your customers to have a memorable experience. Even "dollar stores" are differentiating their offerings with private-labeled products, representing a threat and perhaps a backlash to oligopolistic retailers such as Wal-Mart, Target, and Costco.

Are You Relevant?
David Braun of Virtual Strategies addressed "Remaining Relevant as a Converter." With prices and competition being driven down by competition and overcapacity, converters must contend with fewer resources.

Power is shifting from converter to customer. Even huge companies have little leverage against Wal-Mart, and converters are feeling the squeeze between big suppliers and big customers.

To survive, converters must grow their businesses or go under. Braun’s advice: Determine what your customers are doing—don’t be concerned with what your competition is doing. Examine your relationships with your suppliers. Draw a plan for where your company fits in the marketplace now and in the future.

Braun described a multi-faceted approach to growing business by delivering what a customer wants when it wants it. It requires organic growth with the addition of sales people; increasing or modifying marketing initiatives; making capital investments; investing in research and development for new technologies; diversifying your customer base by increasing the number and types of contracts; marketing the benefits of your value versus other mediums and educating future customers; and initiating external growth through a joint venture, an alliance, Greenfield, franchise, or other marketing agreement.

Braun also offered a top-ten action list to help keep a converting company relevant:

RFID Update
A general session tackling radio frequency identification (RFID) was led by FLEXcon subcommittee chair John Bennett and Bob Zaccone of Graphic Solutions. Doug Borque of Texas Instruments gave a brief history, saying the market is poised for a new generation of RFID and exponential growth from millions to billions by 2006. New standards will be adopted, there will be better authentication between a tag and reader, and there will be more development of sophisticated security algorithms.

Mike Arenson, founder of Matrix, addressed vulnerability issues of RFID, including the need for significantly reduced chip cost, which he says will be difficult to achieve; the potential for cracking codes; and the need for automatic incoming RFID inlay and final inspection testing systems.

Jennifer Forner of the US Naval Surface Warfare Ctr. gave a real-life application for RFID in a "go bang" setting. She thinks the future of RFID is in an imbedded situation but expects "it will take a while before that happens, and the bar code will always be around."

In the meantime, 100% of RFID technology is invested in labels and can represent growth opportunities for companies willing to make an early and hefty investment.

In the final session, Amanda Gore inspired attendees to put some heart and fun back into business by connecting heart to head, letting go, laughing, loving, and learning.

Mesirow Continues M&A Activities
CHICAGO, IL—Mesirow Financial reports it served as exclusive financial advisor to Menasha Corp. in the recent sale of its Promo Edge label business to WS Packaging Group, one of the largest printing and label converting operations in North America. Promo Edge produces promotional labels for the consumer products industry.

The transaction is the 40th packaging merger and acquisition completed by Mesirow in the past several years.