Drupa Critical Trends

FOLLOWING IS INFORMATION FROM PAPER, FILM & FOIL CONVERTER, JUNE 2007, IN WHICH WE PUBLISHED THE RESULTS OF ORIGINAL RESEARCH INTO CRITICAL TRENDS IN THE CONVERTING INDUSTRY. WE PUBLISHED ANSWERS TO QUESTIONS WE POSED TO CONVERTERS I THESE SEGMENTS: flexible packaging (23% of respondents); paperboard packaging (14%); tapes, labels, and tags (25%); unprinted rolls and sheets (25%); and other sectors (13%). The largest segment of respondents (42%) work for companies employing 200 or more people. The remaining reponses were split evenly among smaller companies: 1-19 employees (14%); 20-49 (15%); 50-99 (16%); 100-199 (13%).

While a majority of respondents indicated that their customers' revenue increased in 2006 over 2005 (58%), only a plurality reported an increase in profitability (41%).

Profitability among customers' businesses was twice as likely as revenue to show a decrease versus prior year, according to respondents.

This year, four in ten respondents indicated a negative impact from imports, compared to nearly six in ten last year.

42% of respondents reporting a negative impact say that 2006 sales revenue was down by 5% to 10%. More than eight in ten of these respondents (82%) indicated that these products were imported from China. Mexico was a distant second, chosen by 30% of respondents.

One-third of these respondents (30%) reported that profit margin was down 10% or less as a result of imported converted products.

While the number of respondents reporting an increase in selling prices was similar to that found in the 2006 study, more respondents reported increased pre-tax profitability (47% vs. 38%).

The above is original research conducted by and published in Paper, Film & Foil Converter magazine.