1

An Overview of theAn Overview of theFlexible Packaging IndustryFlexible Packaging Industry

By Peter SchottlandBy Peter Schottland

Flexible Packaging DefinedFlexible Packaging Defined!! Flexible PackagingFlexible Packaging: : A package orA package or

container made of flexible or easilycontainer made of flexible or easilyyielding materials that, when filled oryielding materials that, when filled orclosed, can be readily changed in shape.closed, can be readily changed in shape.  The construction may be of paper, plasticThe construction may be of paper, plasticfilm, foil or any combination of these.film, foil or any combination of these.Includes Includes rollstockrollstock, bags, pouches,, bags, pouches,labels/wraps, lidding, shrink sleeves andlabels/wraps, lidding, shrink sleeves andstretch film.stretch film.

  

2

!! Flexible Packaging has been one of the fasted growingFlexible Packaging has been one of the fasted growingsegments of the overall packaging industry.segments of the overall packaging industry.

U. S. FLEXIBLE PACKGING SHIPMENTSU. S. FLEXIBLE PACKGING SHIPMENTS

($ in Billions)($ in Billions)

INDUSTRYINDUSTRY

17.0 17.5 18.118.9 19.3 20.0

21.222.4

0

5

10

15

20

25

1996 1997 1998 1999 2000 2001 2002 2003

3

GROWTH OF INDUSTRYGROWTH OF INDUSTRY

!! Growth in the flexible packaging market hasGrowth in the flexible packaging market hasbeen driven by an expanding economy and abeen driven by an expanding economy and ashift from rigid packaging to flexibleshift from rigid packaging to flexiblepackaging alternatives. Flexible packagingpackaging alternatives. Flexible packaginghas taken market share from rigid packaginghas taken market share from rigid packagingas a result of a number of factors, including:as a result of a number of factors, including:

!!Advances in TechnologyAdvances in Technology!!Lower Costs and Lower MaterialLower Costs and Lower Material

ConsumptionConsumption!!Advantages of Paper, Film andAdvantages of Paper, Film and

Aluminum FoilAluminum Foil

INDUSTRYINDUSTRYTOP 9TOP 9

1.1. Alcan Alcan Pkg.Pkg.2.2. Sealed Air CorpSealed Air Corp3.3. Bemis Co.Bemis Co.4.4. Aloca Aloca FlexibleFlexible5.5. PrintpackPrintpack

6.6. SonocoSonoco7.7. ExopackExopack8.8. Bryce Corp.Bryce Corp.9.9. AmericanAmerican

Packaging CorpPackaging Corp..

4

APC PLANT LOCATIONSAPC PLANT LOCATIONS

American Packaging is the 2nd Largest PrivatelyHeld Company in the U. S.

$175MM Sales500 Employees3 Plant locations:• Columbus, WI• Rochester, NY• Story City, IAMultiple SalesOffices

Major AccountsMajor Accounts

5

Types of PrintingTypes of PrintingProcessesProcesses

The majority of flexible packaging is printedusing either the rotogravure or the flexographicprinting process but lithography is occasionallyused.

1.) Flexography (63% of market)*

2.) Rotogravure (30% of market)*

There are, of course, other printing methodssuch as screen, electronic, letter press, etc., but

the afore mentioned processes dominate theflexible packaging printing industry today.

*New England Extrusion, Inc, 2003

ROTOGRAVUREROTOGRAVURE

Advantages! Fine graphics reproduction capabilities! Cylinders can be used for press runs in

excess of millions of feet/impressions! High degree of consistency throughout

press run! Prints a number of substrates such as

paper, film, foil,! Relatively simple mechanical features

6

ROTOGRAVUREROTOGRAVUREDisadvantages! High prepress costs! High engraving / cylinder costs! Process used for long runs! Many gravure printers continue to rest on being

“the process of choice” while ignoring theerosion of their market.

FLEXOGRAPHYFLEXOGRAPHYAdvantages• Very good process and line print quality• Less expensive plate costs than

rotogravure cylinders• Excellent print registration• Fast turn-around time for plates and

finished product• Can be used with a wide variety of inks,

including water-based, solvent-based andUV curable

7

Disadvantages• Larger color-to-color traps

than offset rotogravure• Requirement of a small plate

gap• Barcode orientation and size

FLEXOGRAPHYFLEXOGRAPHY

Threats Facing GravureThreats Facing Gravure!! FlexographyFlexography

!! Flexo industry has done a remarkable job ofFlexo industry has done a remarkable job of““sellingselling”” the benefits of their process. the benefits of their process.

!! Flexo industry has improved their processFlexo industry has improved their processover the years making it harder for gravure toover the years making it harder for gravure toclaim superior print quality and consistency.claim superior print quality and consistency.

!! A perception throughout the packaging worldA perception throughout the packaging worldthat Flexo is lower in price. Gravure needs tothat Flexo is lower in price. Gravure needs to““attackattack”” its cost structure and market its its cost structure and market itsbenefits.benefits.

8

Vision for GravureVision for Gravure!! Build a long term strategic plan to insureBuild a long term strategic plan to insure

competitiveness and profitability.competitiveness and profitability.!! Gravure is still the most consistent andGravure is still the most consistent and

has the sharpest print quality.has the sharpest print quality.!! Need to deliver benefits of gravure at aNeed to deliver benefits of gravure at a

price that meets other options.price that meets other options.

Career OpportunityCareer Opportunity!! Growing industryGrowing industry!! Always changing technologyAlways changing technology!! Items you use every dayItems you use every day!! Technology oriented Technology oriented –– need a degree in need a degree in

this field to be considered a viablethis field to be considered a viablecandidatecandidate