Release liner is a major contributor to the success of many industries today, from tapes and gaskets to baking papers, medical disposables, and, of course, pressure-sensitive labels. Annually, it is the subject of the AWA Global Release Liner Industry Conference and Exhibition, which alternates between USA and Europe. This year’s event was held in Amsterdam, The Netherlands, 19-21 March. Its in-depth program, further expanded with two parallel seminars on related topics – silicone technology and linerless labels – attracted around 200 participants from all levels of the value chain worldwide.
The release liner industry may be a global market today, but the profile and characteristics of the business are changing. Conference keynote speaker Michael Apperson, CEO of global release liner manufacturer Loparex, summarized the status: ‘Global isn’t global any more’. Around the world, things are changing. The old ‘global’ definition featured multinational sales offices and manufacturing, and a consistent global product offering, with technologies and products developed in the established markets – usually USA, Europe, or Japan. Today’s definition is a complex combination of these basic requirements with a much more regional focus, where products are also developed, manufactured, and serviced to meet local customer needs.
Responding to regional product preferences is the key to successful, profitable business. ‘We must understand regional differences’, said Mr Apperson. He compared the profile of industry-standard US premium graphics liner with that of graphics liner in China, where local quality, performance, and price requirements make the product ‘ten times harder to make’. Loparex, he said, are creatively pursuing this new business route, which they believe will promote product innovation as well as growth. Mr Apperson suggested that such a strategic synergistic approach makes a drive for 6-10% growth ‘not an unrealistic number’ in the release liner business.
AWA Alexander Watson Associates’ President and CEO, Corey Reardon, went on to provide his annual overview of current market characteristics. ‘Consolidation’, he said, ‘and backward and forward integration continue across the supply chain. What were, in Europe, eight companies are now – in a short period of time – reduced to just two.’ Capacity investment continues in the emerging markets; and, while growth in the Asia Pacific region – the world’s largest market for release liner – is slowing, it is still, Mr Reardon commented, ‘a significant driver of global growth’. It is growing annually at two to three times the rate of the markets in North America and Europe. Worldwide, he showed, growth in 2013 increased at around 4.7% over prior year, with 48% of release liner demand focused on pressure-sensitive labelstock, of which approximately 80% is in-house siliconized.
The voice of the industry
Jackie Marolda, Vice President and Senior Consultant with AWA Alexander Watson Associates, presented the results of the 2014 AWA Industry Survey. Respondents, she showed, ‘very much echo Michael Apperson’s insights into globalization’. Costs have increased in the last 12 months in every aspect – transportation, energy, labor, and materials -- and, Ms Marolda said, there is ‘very little expectation of any decreases in the next 12 months’. Among the business influencers the survey identified was a push to drive cost out of product offerings. When survey respondents were asked to comment on whether the release liner industry is ‘in real need of some true innovation’, more than 60% agreed, and identified arenas in which innovation has recently occurred, and where more activity can be expected – for example, linerless labels, sustainability, and recycling programs.
Executive leadership discussion
Mr Reardon drew together two discussion panels: on executive leadership, and on market and industry topics. Participating in the Executive Leadership Panel were Loparex’s Michael Apperson; Thomas Blaige, Chairman and CEO, Blaige & Company; Roland Hill, Chairman and MD, Contra Vision Supplies Ltd; Dr Bernhard Klofat, CEO, Felix Schoeller; and Tomas Rink, President, Ritrama.
On the topic of globalization, and how it will develop in the next five to ten years, Mr Rink observed ‘Globalization also means spreading the risk! But we must indeed be global on a regional basis, because it’s a different story everywhere. There isn’t a common denominator!’ Regarding global competition, Mr Rink commented that in Asia, local suppliers ‘play a different game’, and it is difficult to compete. In South America, he added, ‘it is difficult to follow local rules.’
Speaking on the subject of innovation, Mr Apperson said that Loparex has developed various portfolio channels – ‘but the challenge is to get people to think differently’. Mr Rink said ‘nowadays, innovations in the specialty arena become commodities in weeks, not years!’ Mr Hill, however, said that he ‘would rather see a world where we could co-operate as an industry on innovation. Innovation is a state of mind.’
Defining leadership, Mr Blaige said it is a matter of ‘leading by example, participation, and communication skills’, while Dr Klofat preferred the term ‘managing, and achieving results’. Commenting on industry growth for the next five to ten years, Mr Blaige unequivocally highlighted niche products and markets, while Mr Apperson pinpointed inkjet, India, and electronics (particularly in Asia) as areas where the industry will see positive development.
Market and industry discussion panel
Panelists brought together to discuss relevant market and industry topics were Sjaak Elmendorp, Vice President, Technology, for Avery Dennison’s Materials Group; Sean Duffy, Global Business Manager for Silcolease Release Coatings, Bluestar Silicones; Christian Velasquez, Global PSI Market Leader for Dow Corning; Dr Stefan Stadtmueller, VP Surface Technologies with Evonik Industries; and Patrik Fransehn, Director of Global Business Development for Wacker Chemie’s Performance Silicones Business Unit.
‘When we talk about innovation today’, said Mr Reardon, ‘the conversation always seems to get around to “cost out”. What are we doing in terms of innovation that is NOT focused on taking cost out?’, he asked. Mr Velasquez said that the is actively pursuing new end-use markets, such as electronics. Mr Elmendorp added customer sustainability scorecards and reduced dispensing line downtime to the list, adding that, in the latter context, ‘film liners offer a huge benefit’. Mr Velasquez commented that ‘film liners are growing at a faster rate than paper,’ and Mr Duffy added ‘when they are cheaper – much cheaper! – they will replace paper.’
‘Lead, follow, or get out of the way!’
‘Lead, follow, or get out of the way!’ was the subject addressed by Thomas Blaige, Chairman and CEO of investment bankers Blaige & Company. In an industry context, for a company to ‘lead’, it should ‘acquire’. For a company to ‘follow’, it should merge; and to ‘get out of the way’, a company should sell, divest, or recapitalize where needed. Specializing in plastics, packaging, and chemicals, his company has a unique, in-depth knowledge of mergers and acquisitions in these industries, and said that there are now 40 such transactions a year in the label industry supply chain. He cited as a prime example the recent creation of Coveris, bringing together five leading packaging companies to make a single manufacturing entity with revenues exceeding $2.5 billion, and a presence in more than 20 countries. Additionally, he said, there has been considerable strategic activity in the coatings sector – for example, in Mondi, Loparex, UPM, and Avery Dennison. Checking back on the sector’s top 50 companies in 2001, he showed that there had been a huge change: 58% have merged or sold in the intervening years. ‘The big are getting bigger – widening the gap’, he commented.
The changing face of the US paper industry
Greg Rudder, Editor of US-based PPI Pulp & Paper Week, one of the forest products industry’s leading information sources, looked at how the US paper industry still remains full of change, conversions, and M&A activity. He looked first at developments in the overall US paper industry, where production has declined 7.5% since 2009 as a result of the financial crisis and reduced demand because of ‘technology, computers, mobile devices, and social media’. There have also been 17 Chapter 11 bankruptcies in North American paper companies – particularly in newsprint – since 2009, and China’s paper and board production capacity has grown exponentially, impacting trade flow. Nonetheless, the US industry has seen profits in 2013 rise to their highest for 14 years or longer, at 6.2%.
In specialty release liner production, he showed that the ‘big three’ – Expera, Boise, and UPM – sell 60% of roll demand. However, price increases on some qualities are currently being applied, and industry players are revising their business profiles. Bemis, for example, is closing its pressure-sensitive materials plant; and CCL is now focusing on acquisitions in geographies other than North America.
Looking at polyolefins
The global polyolefins market and pricing outlook is a key factor in filmic release liner production and demand development. Current trends were presented in depth by Remko Koster, Director, Polyolefins, for Europe and Africa at IHS Chemical, specialists in chemical market analysis and forecasting. As global economic growth gradually picks up, Mr Koster showed, ‘the commodities supercycle has ended’. With oil prices currently moving down (although, he said, they will recover), it is critical to note that ‘hydrocarbon feedstock costs are the key drivers in chemical manufacturing’. Based on coal feedstock, China represents 50% of global polymer demand, and continues to lead overall market expansion. North America’s active source of hydrocarbon feedstock, shale gas, is creating capacity growth in that region, making it once again a competitive supplier of PE. Meanwhile, Europe’s major chemical companies are rationalizing capacity, with PE (mainly HDPE) production plants closing in 2013-1015, delivering a resultant 7% capacity reduction. Mr Koster expects to see growth in demand in the short term for PE – levelling off thereafter -- and forecasts that 2018 demand worldwide for HDPE, LDPE, and LLDPE will be 102 million metric tons. The overall price of PE resins will not be dictated by the lower cost base of USA and the Middle East, but by the higher cost base of Europe -- so users may not see the price reductions in PE polymer that the use of sources like shale gas might suggest. Since PP is derived from crude oil, there is less likelihood of PP resin producers gaining price advantage as will the producers of PE resins from shale gas.
See-through pressure-sensitive graphics
Roland Hill, Chairman and Managing Director of Contra Vision Supplies Ltd, explored the world of large-format see-through graphics with a visual presentation of examples of the pressure-sensitive perforated window films pioneered and patented by his company, and now offered in a variety of different qualities to meet the needs of such markets as architecture, automotive, security, packaging and labels, and, of course, indoor and outdoor advertising. His presentation ended the first day’s formal agenda, and delegates enjoyed cocktails around the exhibition, courtesy of the event sponsors.
Profile of a specialty supplier
The second day’s program opened with a company case history – a ‘specialty’ release liner narrative – from Duncan Wall, President, Fox River Associates. As a supplier of silicone paper and film release liner, Mr Wall began, ‘I had to start in specialties – and “C” accounts!’ He continued: ‘all my business is in North America, and today I have 0.008% of the market.’ That 0.008% includes specialty products for such markets as automotive, electronics, roofing, graphic arts and pressure-sensitive labels. Fox River Associates has flourished as a regional supplier based on its focus on customer service and on being close to the customer in terms of both product specifications and inventory. Mr Wall cited some examples of the ways in which the company’s creativity and flexibility have met customers needs – examples, he said, that are ‘not symptomatic but emblematic of what we do.’ He speculated on whether it would it be possible to replicate the Fox River business model in Europe, concluding that the entry cost would be very high, and that the presence of so many commercial siliconizers would make success difficult.
Calvin Frost, CEO of US-based Channeled Resources Group, is a familiar campaigner in the realms of sustainability. He presented an in-depth paper on ‘the complexity of being green’ with particular reference to silicone-coated release liners. He underlined the fact that the release liner industry does not have ‘a very good track record on recovery’. Less than 10% of all spent liner generated in pressure-sensitive roll labeling is currently recovered. Reuse, for example as pelleted fuel, and recycling are both practical for release liner; and recycling PET film liner is, he said, a ‘no brainer’. Paper liner recycling is more complicated, and paper has very little value, so there is no monetary incentive, he observed. However, industry initiatives at various levels are in progress, and FINAT, the European pressure-sensitive labeling association, has also recently launched a liner recycling competition.
One of the problems of the plethora of environmental legislation, scorecards, and other standards today is that there are simply too many of them, said Mr Frost; and he adjured delegates to embrace, at all levels, just one ‘green certification’ standard. Nonetheless, he concluded, in the complex and fragmented pressure-sensitive label value chain, it is legislation that will drive recycling.
EU legislative harmonization
EUROPEN, the European Organization for Packaging and the Environment, represents the views of its members -- the broad packaging industry value chain -- and is committed to lowering its environmental footprint. Managing Director Virginia Janssens looked at the ways the 2014 EU Waste Legislation Review is moving the packaging industry towards resource efficiency. Most European countries, she demonstrated, already meet the Packaging and Packaging Waste Directive’s 55% overall recycling target, with 64% the average figure. Targets are likely to rise significantly, however, said Ms Janssens, across most packaging material categories – including paper and cardboard, currently at 60%, and plastics, currently at just 22.5%. While release liner was removed from the pan-European list of materials considered ‘packaging waste’, individual EU member states can decide for themselves how to categorize liner waste, which continues the uncertainty that is a real concern for the label release liner industry.
A label maker’s perspective
It was appropriate that release liner should be profiled from a label maker’s perspective. Alan Hazlewood, Group Materials, Quality, and Technical Support Manager for Skanem AS, delivered that perspective. Skanem is at the high end of the label market and, Mr Hazlewood said, ‘70% of our business is with the big brand owners.’ The company’s chosen route to adding value with its labels is via web-fed processing, which delivers quality, flexibility, and reliability from start to finish.
Exploring the external influences – political, economic, social, and technological -- on the label market, he outlined the resultant challenges facing end-user brand, purchasing, and operations management. These include pricing, positioning on the retail shelf, shorter time-to-market, environmental and sustainability issues, and labeller uptime and reliability. Taking costs out has, for brand owners, become a standard tactic, but, said Mr Hazlewood, ‘the cost reduction initiative “barrel” is nearly empty now.’
For release liner, said Mr Hazlewood, ‘what we are looking for from the manufacturers is absolute performance -- and that is what the industry is delivering. Label release liners are fit for purpose.’ Release liner options today include glassine, PE, and the relatively-new PP. Glassine, Mr Hazlewood observed, is outstandingly reliable, and he can see no major case for moving away from it – but, he asked, ‘is there sufficient glassine capacity to meet industry needs?’ . He also discussed global availability shortfalls in oil-price-dependent PE liner, and on the films’ downside (wind-up tightening and print ghosting on adhesive), as well as their proven performance in ‘no label look’ applications. Purchasing savings delivered by a switch to PP liners, he said, are balanced by the question as to whether they have yet proved themselves: they are heat sensitive, stretch on press, and suffer some problems in label positioning.
Mr Hazlewood examined the option of switching to film liners from glassine, but the attendant disruption of so doing would require to deliver a significant price reduction which, he said, ‘would have to be a minimum of 7.5% before we would consider it’.
Linerless labels are, he observed, a long-term choice here, and are options in the foods, petrochemicals, home and personal care markets which are already being explored with Skanem Linerless™ labelstocks and dedicated dispensing lines.
Mr Hazlewood forecasts continued disturbance in the label release liner market in the short term, but, in the long term, a ‘coalition market’ for all the currently-available options, with the possibility of the emergence of other types of liner, for which we must ‘wait and see’.
Sealing the envelope
Udo Karpowitz, Vice President, Sales, for Mayer-Kuvert-network, headquartered in Germany and with operations in 23 countries, examined the development and future of pressure-sensitive closures in the European envelope industry. ‘In 2013 our industry sold 70 billion items in Europe’, he said – mostly for commercial applications, since internet and social media communications have reduced the importance of ‘personal’ envelope use. 26% of current commercial envelope use is in stock items, a further 17% of envelope production is bespoke, and 18% is used for mailshots.
Different adhesive formulations are used – gummed and latex, as well as peel-and-seal. Mr Karpowitz said release liner consumption for peel-and-seal applications in Europe was 80 million M2 in 2013. While envelope volumes all round are reducing by 5-8% per annum, release liner volumes will remain more or less stable in the segment, in response to growing demand for document pouches and despatch packaging.
Release liner in wound care
Another important specialty market segment for release liner is medical and wound care, and Mike Yates, Product Development and Technical Manager for Smith & Nephew Extruded Films showed how they contribute in polyurethane film support for professional and consumer wound care, both as process liners and as part of the end product. Release liners, both paper and film, contribute dimensional stability; consistent, controlled release properties; temperature resistance; impart a matt surface to a dressing; and accurate diecutting (especially papers). The technical requirements of the wound care industry are certainly challenging and, in the commercial arena, Mr Yates said, ‘reduced lead times and stable supply chains and pricing’ are key requirements of release liner manufacturers.
Corey Reardon drew the conference program to a close, thanking the speakers and their companies, who had generously donated their time, and the event’s sponsors who, he said, ‘impressively represented the industry value chain’. They were Platinum Sponsors UPM; Gold Sponsors Bluestar Silicones, Dow Corning, Evonik Industries, Loparex, Mondi, and Wacker; Silver Sponsors BillerudKorsnäs, Boise, Delfort Group, Felix Schoeller, and SAScoat Vietnam; alongside leading trade and technical media around the world.
Next on the release liner industry’s schedule is its annual one-day update, the AWA Label Release Liner Seminar, which is scheduled to take place in Chicago, USA, on September 8th 2014, just before the Labelexpo Americas exhibition. Details of all upcoming events are available via the company’s website, www.awa-bv.com.
AWA Alexander Watson Associates regularly publishes market studies and updates on the release liner industry. Recently published is the Global Release Liner Market Update 2014, and 2014 will also see a new edition of the company’s established North American Release Liner Market Study and Asian Release Liner Market Study, complementing the new edition of the European Release Liner Study published last year. www.awa-bv.com