De Ruijter speaks on recession at labels forum

Paul de Ruijter, a key note speaker at the Label Printers Forum in Amsterdam, The Netherlands, organised by FINAT, has given his opinion on the effects of the recession and finding ways out of it.

The winners in the self-adhesive label industry economic crisis will be companies that focus on their core businesses, are aggressive with sales, innovative in their products and are financially strong, he said.

Quoting Charles Darwin, de Ruijter, who is managing director at De Ruijter Strategy, said: 'It is not the strongest of the species that survives, nor the most intelligent.

'It is the one that is most adaptable to change.

He explained that the losers will be companies that compete solely on price, try to supply every type of customer, only focus on cost-cutting and have poor costs structures, while being too big to be niche and too small to be 'players'.

At the same time, such companies also supply some of the worst-hit sectors in the recession, such as the automotive market.

According to de Ruijter, start-up businesses, with no cash and no reputation, will be non-starters.

At the forum, Paul de Ruijter produced findings from an internet survey of trading conditions within the European self-adhesive label industry, which found unanimous feeling among FINAT members that the present economic troubles will certainly last throughout 2009 and probably throughout 2010.

A few expect it to last beyond 2012.

The brightest outlook is for label printers in the food and beverage sector, but they are facing some pressure from the moves by supermarket groups to introduce cheaper own-brand labels.

The black spot is the demand for labels from the globally-hit automotive sector, construction and the luxury goods market.

The survey's results also revealed that high price pressures remain but raw material prices have not dropped, and more competition has led to lower margins.

Demand will drop further, largely due to a reduction in volumes, and the shortage of money.

Participants in the survey believe there will be more bankruptcies and that possibly up to 50 or more label- producing firms will be taken over this year.

All companies are tightening controls on their payments, and 40 per cent are now demanding payment within 30 days.

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