LABELS&LABELLING 10/2008
Born in the Czech Republic
The success of S&K LABEL in Central and Eastern Europe demonstrates how fast the region’s label industry is growing – and the opportunities for further expansion. Andy Thomas reports.
Founded in 1990, S&K LABEL is the Czech Republic’s biggest label converter, accounting for 25 percent of the country’s pressure-sensitive label output.
As with so many successful converters in the fast growing markets of Central and Eastern Europe, S&K LABEL has grown rapidly over the last ten years, more than doubling revenue between 1997 and 2007. In its drive for expansion, S&K LABEL has been able to call on the resources of its €30 million parent company, S&K GROUP, which consists of six companies specializing in a range of industrial applications.
S&K LABEL started out as a small advertising agency handling commercial print and promotional labels before taking the decision to print labels itself, operating from a rented building in central Brno. Interestingly, S&K had an international outlook from its earliest days, and was the first Czech company to join FINAT way back in 1993.
In 2006 the need for extra capacity saw S&K take the decision to build its own state-of-the-art facility in the Kuřim industrial zone. The new plant opened at the end of 2007 and production began a few months later.
On a European scale, S&K already counts as a medium-sized label converter, with 13 12 flexo and UV flexo presses and 1 digital printing press, 150 employees and a 2007 turnover of €14 million. Last year the company converted 16.5 million sq m of PS material– three times the figure for 1997.
‘Our aim is to achieve 28 percent share in the Czech market while increasing our exports,’ says S&K’s sales and marketing director Ladislav Koutnak. Exports currently account for 12 percent of S&K’s turnover – up from 7 percent in 2002 – and the target is 18 percent. Not surprisingly, central European economies such as Slovakia, Hungary, Austria, Germany and the Netherlands are among S&K’s most successful export markets, although a significant amount of business is done in the Middle East and North Africa, particularly Egypt and Tunisia. In South Eastern Europe, Serbia and Montenegro are growing export markets. Looking to the future, Koutnak sees the fastest export growth coming from countries outside the EU – particularly to the East.
S&K counts among its customers an impressive list of global brands, including Procter & Gamble, Unilever, Walmark, Lactalis and Kimberly-Clark. A great deal of S&K’s production is supplied to foreign markets indirectly via the Czech branch offices of these multinational companies. S&K also works with the major global retail groups like Tesco and Ahold, which account for around 13 percent of sales. On the industrial side, major customers include Skoda Auto, Bosch Diesel, Inventec and Andrew Telecommunications.
While S&K’s key end use sectors are food - representing around one quarter of sales - cosmetics, pharmaceuticals and chemicals, some 20 percent of the company’s business is in blank label production. This involves converting self-adhesive label sheets and fanfold labels for the office market, and direct thermal and thermal transfer label blanks for retail customers.
One market where S&K Label has recently become active is the provision of functional labels for durable goods, in support of the growing manufacturing base in the Czech Republic of ‘white goods’, electronic items, and automotive components. This is certainly a specialty field, as such labels must conform to international safety specifications, and stay, legibly, in place throughout the life of the product.
‘This is an area where we definitely plan to grow out business, and we are working with Avery Dennison in Prague to do so,’ says Karel Sehnal, managing director and executive head at S&K. One area where we are currently benefiting from their technical support is printing durable labels on Fasson labelstock on the new HP Indigo ws4500 digital press we have just installed.’
Technology
S&K started out as a letterpress house with a Nilpeter B200 installed in 1991. The move to flexo was made four years later with the purchase of an 18-unit Comco Commander press, and in 2000 the company invested in its first UV flexo press, a Nilpeter FA 3300. Screen units were added in 2003 to allow S&K to enter the cosmetics label sector.
S&K celebrated the move to its new plant with the purchase of a 10-color Nilpeter FA4 UV flexo press with the capability to convert not only self-adhesive labels, but also unsupported films. Print trials with shrink sleeve labels are now under way and the 400mm-wide press has been successfully printing a range of white, transparent, metallic and pearlized BOPP films.
‘We are hoping to extend our relationship with Avery into the realms of the Fasson Rapid Roll portfolio, which offers such unsupported films,’ says Karel Sehnal.
To support the FA-4, S&K purchased a RotoflexVLI 500E rewinder with a razor cut capability to handle film slitting. A VLI 330 slitter rewinder was also purchased, along with an Alphasonics Mia 1100 anilox roll cleaning machine.
S&K recently moved into digital printing with an HP Indigo ws4500 7-color press, only the second such machine installed in the Czech Republic. It was supplied with an off-line Omega Digicon series 2 converting line incorporating priming, varnishing, laminating, die-cutting, slitting and hot-foil stamping.
S&K is currently developing its own digital printing swatch and looking at projects which focus on small batches, such as wine labels. ‘There are 200 wineries in our region and these are usually custom-printed labels,’ says Martin Sedlacek, S&K area business manager. ‘We adjust the colors to match flexo and we find that for short run applications it is a low cost option, as we do not need to make plates. We are testing doing our own coating, although Avery does have standard coated wine label stocks.’
In terms of pre-press, in 2006 S&K LABEL was the first Czech converter to install an EskoArtwork CDI Spark 4835 flexo CTP system, along with a Cyrel FAST 1000TD thermal processor. A Heaford Cobra table top plate mounter was also installed.
Lean and Green
S&K LABEL has done a lot of work in the area of Lean Manufacturing and in promoting a more efficient and sustainable workflow. As S&K was recently awarded ISO 9001, an ISO 14001 certificate for putting in place systems for recycling waste and conserving energy is in present time prepared.
The company runs a K2 MIS, which allows continuous monitoring of production operations from entering of the job order to dispatch. ‘The system has led to a radical reduction in error rate, a significant increase in through-put, and online delivery tracking of products from the warehouse,’ says Martin Sedlacek.
Print quality control is another obsession at S&K, which has installed an ALIS CII off-line inspection system to check print quality. The system is capable of finding and evaluating even small deviations in color, and of checking color register and content accuracy.
Partnerships
Central to the success of S&K has been the close partnerships forged with industry suppliers. When L&L toured the new plant, Kocher & Beck md Martin Stierle was visiting. K&B supplies S&K with magnetic dies and cylinders. ‘We realized that extremely tight tolerances on die-cutting plates is a must, not an option and Kocher & Beck have always been able to meet our needs for tight tolerances and quick delivery,’ said Martin Sedlacek.
All S&K presses are fitted with K&B’s KMS-2 pressure setting systems. ‘There are some customers whom we have to convince about the need for pressure control systems. But people here were always clear that it helps the printer to control what he is doing and so helps to control quality,’ commented Martin Stierle.
Avery Dennison has been another key partner for S&K.‘Special labeling solutions are often a requirement of our customers, and Avery Dennison is always willing to help develop a solution for a particular project,’ says Karel Sehnal. S&K LABEL also helps Avery Dennison by trialling new materials.
