One-Dimensional Converter Expands Its Reach
- Published: November 01, 2001, By Edward Boyle, Contributing Editor
Today, Multi-Color Corp. is a $75 million label converter with expertise in pressure-sensitive, heat-shrink, and in-mold labels. But just two years ago, the Cincinnati, OH-based company was best known as “a premier supplier of in-mold labels,” says Steve Mulch, senior VP of sales and marketing.
And, Mulch adds, that wasn't necessarily a bad thing. After all, he says Multi-Color literally pioneered the development of the in-mold labeling process, along with Procter & Gamble and Owens Illinois, more than 20 years ago and still maintains substantial market share. In less than two years, however, Multi-Color has diversified into the high quality shrink sleeve and p-s label markets by acquiring established companies with strong positions in both. And that, says Mulch, is an even better thing.
“We're considered a very reliable, cost-effective supplier of labels,” he explains. “And today, we offer more types of labels. If you want in-mold, pressure-sensitive, glue-applied, heat shrink, we're in a position to supply customers with any of those. If you want them printed offset, flexo, or gravure, it doesn't make any difference to us, we've got all those technologies in-house. So, let's focus on delivering the best possible cost structure for you regardless of technology, because we have no need to promote one over the other.”
With two acquisitions in just seven months, Multi-Color went from being a largely one-dimensional label converter — albeit it a pioneer in its chosen niche — to one of the nation's largest label converters. (Annual sales were $67 million in 2000, up from “just” $53 million the year before, thanks in part to the added volumes from its acquisitions).
New Facility is a Spark
Sparking that growth: Multi-Color's Batavia, OH, facility, acquired in December 1999, gave the company the ability to convert p-s, clear in-mold, continuous roll feed, and shrink labels for the first time.
The 30,000-sq-ft plant houses multiple printing capabilities, including UV flexo, UV rotary screen, UV offset, UV offset/gravure, and foil stamping. Because of Multi-Color's established international customer base through its in-mold business, the Batavia facility was shipping labels throughout North and South America, Mexico, and Asia within six months of being acquired by the company.
Equipment there includes a 28×40-in., six-color Komori L640 lithographic press with interstation UV curing and coating; a pair of eight- and ten-color, 18-in. Comco Commanders with UV flexo, UV rotary screen, UV offset/gravure, and foil stamping capabilities; a 16-in. Arpeco Tracker inspection/rewinder; PMC die-cutting lines; 38-in. 812-38 slitter/rewinders; a 57-in. sheeter; 24×30-in. flatbed die-cutters; and 46-in. guillotine cutters. The facility's six-color Komori is a recent addition specifically designed to run film substrates.
The UV capabilities of the Komori press, in particular, were critical in allowing Multi-Color to serve the in-mold market effectively, says Mulch. “We were very interested in getting that type of converting capability within our company, and Batavia brought that to us,” explains Mulch. “There are a limited number of ‘total UV’ offset presses in the marketplace, and that press allows us to dry ink at each print station so the film comes off dry. [Others may] have to depend on heat and oxidation, and that really can cause problems. The Komori allows us to avoid those problems altogether.”
High Volume in the Desert
The company's 42,000-sq-ft Uniflex Div., located in Las Vegas, NV, specializes in heat-shrink labels and neck bands. The facility, acquired in June 2000, converts millions of labels daily for a variety of market niches, including beverage, personal care, distilled spirits, food, and pharmaceuticals. A nine-color, 39-in. rotogravure press features dual unwind and rewind splicing stations, allowing it to run two jobs simultaneously. The facility also houses slitting machines, seaming machines, rewinders, and die-cutters.
“The rationale behind the Batavia acquisition was that we wanted to bring offset and combination flexo/screen printing into our operation,” Mulch explains. “When we purchased Uniflex, we acquired a well-established, well-run, quality operation that brought us another product line with excellent growth potential. So, it really is our intention to operate within specialized markets that have excellent growth potential in high value-added areas.”
Multi-Color also operates Laser Graphics Systems to produce gravure cylinders for the company's in-mold label business, as well as outside customers. Staying true to Multi-Color's “pioneering spirit,” it was reportedly the first US facility capable of producing cylinders without using films when it was established in 1991. That facility houses a Macintosh design system, a Scitex Dolev 800V imagesetter capable of outputting films up to 33 × 44 in., two Think Laboratory laser stream imaging lines, and a multistation plating and etching line.
“We're certainly working hard to grow the company,” says Mulch, “but we're also working hard to grow it profitably. We're not interested in acquisition and growth just for growth's sake. We've got a vision of what we want this company to be, and we're very disciplined about carrying out that vision. I think our two recent acquisitions tell that tale rather well.”
IML Remains a Mainstay
Still, in-mold labels remain both the past and, very definitely, a key ingredient in the future of this growing converting operation. Multi-Color's Scottsburg, IN, facility, located just outside Cincinnati, is the world's largest producer of in-mold labels, Mulch says. In fact, it converts more than 10 million IML labels daily and and ships them to more than 40 blow-molding locations in the US, Mexico, and South America. The facility, which employs 230 people in 24-hr-a-day operation, was expanded to 110,000 sq ft in 1999.
The plant converts in-mold labels for many of the world's leading consumer products companies in markets such as laundry and fabric care, household cleaners, fruit juices, automotive, and food products. Customers include the likes of Colgate-Palmolive, General Mills, Kraft, Minute Maid, Procter & Gamble, Unilever, and the Wrigley Co. (Multi-Color's very first customer when the company was founded in 1918). Multi-Color specializes in the use of fluorescent inks and “bold colors” to deliver high-impact graphics and recently installed an electron beam coating line to provide high gloss and greater label durability.
The Scottsburg facility houses two nine- and ten-color, 40-in Schiavi gravure presses; an eight-color, 40-in. Uteco gravure press; an eight-color, 44-in. Bobst Champlain gravure press; PMC die-cutters; as well as slitters and sheeters. The presses were designed specially to handle both paper and film substrates and are equipped with sophisticated systems to apply the adhesives and coatings required in the IML process.
Leading by Technical Expertise
Although in-mold labels are a unique market niche, Mulch says Multi-Color's extensive IML background was ideal preparation for its entry into both p-s and shrink sleeve labels, because they all require a high degree of technical expertise.
Notes Mulch, “What we've said is that as we grow the newest segments of our business, we want to do so with an eye toward technically demanding products.”
It was just such a desire that put Multi-Color at the forefront of in-mold label converting 20 years ago. At the time, Procter & Gamble was looking for a process that would attach labels to plastic detergent bottles and other large containers more securely. Glue-applied labels were damaged easily in shipping or in household use, so P&G turned to its long-time vendor for an alternative. In doing so, the companies created an industry.
“Absolutely nobody, particularly in detergent packaging, was happy with the performance of glue-applied labels,” recalls Mulch. “On large bottles, glue-applied labels are more difficult to control and position reliably without getting wrinkles, edge lifting, or separation. Also, the technology doesn't offer very good product resistance. Invariably, either in the filling lines or in the household, you'll get overflows and spill-age that tend to attack the label. An in-mold label offers excellent adhesion, and with the barrier properties we can build into the overprint varnishes, we have excellent product resistance. It's solved a lot of problems.”
Mulch says cost reduction was also a driving force in the development and popularity of in-mold labels. The process essentially eliminates a production step by “applying” the decorative or informational label while the bottle is being formed, rather than applying it in a separate, off-line process. Gravure- and flexo-printed in-mold labels also offer greater esthetic appeal, he notes, since essentially they become a part of the finished package, much like the “no-label look,” enhancing the appearance of many products in the health and beauty field today.
Challenges to Meet
Even after 20 years of in-mold label production, Mulch says it is still a “challenging” process. But he adds the very technical nature of the process also has helped to keep many potential competitors on the sidelines, allowing Multi-Color to maintain a significant market share. In addition to the skill and experience required to produce an in-mold label, Mulch says that assuring the labels can be “applied” by its 42 different end-users worldwide is another critical aspect of the process, especially since a wide variety of blow-mold equipment is used by the various blow molding operations.
“Each of those locations has various generations and brands of blow-molding equipment,” Mulch says. “There are new machines and some that were retrofitted when the product was developed 20 years ago. And our labels have to work with all that equipment in all those locations.”
Although Multi-Color has added p-s to its product mix, it isn't likely flexo will replace gravure as the converting process of choice for high-volume in-mold, says Mulch, quickly adding, “except in the health and beauty care markets, where UV flexo coupled with rotary screen and foil stamping are often needed to meet our customers' graphics expectations. For one thing, run lengths average between 2 and 5 million labels, an ideal length for the high-speed output of the gravure process. Also, the adhesives used in in-mold labeling require a specialized pattern that can only be achieved through gravure application.”
However, says Mulch, what's really important is not trying to switch labels over from in-mold to p-s but converting existing buyers of in-mold labels to become users of Multi-Color's p-s products as well. In fact, according to Mulch, that was an essential part of the company's aggressive growth plans. By providing in-mold, p-s, and shrink technologies from a single source, Multi-Color has become more valuable to its formerly in-mold-only customers — and to its potential customers as well.
“We're not starting at ground zero, because we have a strong reputation for quality and service from our established accounts,” notes Mulch. “So we don't have to prove ourselves a reliable source of labels for many of our ‘new’ pressure-sensitive accounts. We're already considered as such by the Unilevers, Procter & Gambles, Colgates, and Dials of the world.
“I know this term gets overused, but we're really working hard to become a ‘solutions’ company,” says Mulch. “And we're working hard to give our customers the best possible products. In order to do that, we really needed to develop a portfolio of converting options to help our customers make good decisions, and I think we've done that quite well.”
CONVERTER CONNECTION
Multi-Color Corp., Cincinnati, OH; 513/381-1480
SUPPLIER INFORMATION
Komori America, Rolling Meadows, IL; 847/806-9000; komori.com
Comco Intl., div. of Mark Andy Inc., Milford, OH; 513/248-1600; markandy.com
Arpeco Engineering Ltd., Mississauga, ON, Canada; 905/564-5150; arpeco.com
PMC Printing Machinery, Cincinnati, OH; 513/891-9000
Scitex America Corp., Bedford, MA; 617/275-5150
Think Laboratory Co. Ltd., Chiba, Japan; ph: +81 (0) 471 46 0566
Schiavi spa, a member of the Bobst Group, Piacenza, Italy; +39 (0) 523 493 1; bobstgroup.com
Uteco USA Inc., Mt. Prospect, IL; 847/290-0022; uteco.com
The Bobst Group Inc., Roseland, NJ; 973/226-8000; bobstgroup.com
