Niche production key to success for labeling business

6 Nov 2012

Rotakett_Gallus _RCS

The Scandinavian market for self-adhesive labels is not large in volume, site so the converters who choose to supply it need cost effective production and the ability to offer something different, case if they are to attract and sustain business. One company, Rotakett, based in Helsingborg on Sweden?s west coast, has succeeded in building a business in high quality, niche market labels based on a close working relationship with Gallus, the Swiss manufacturer of narrow web presses.

The founder, Bengt Eliason, began his career in the self-adhesive label business in 1968,
working with a partner and a collection of Gallus machines. After the company was sold in
1988, Eliason acquired a failing label printing company and restructured it into Rotakett. The company moved to its present location in 1991, and has extended the premises in several stages to a size of 2,400 square metres ? though this will be doubled when it occupies a new factory currently under construction.

Throughout the company?s development, there have been two constant threads, the Eliason family at Rotakett, and the Rüesch family at Gallus, between which a high degree of
synergy has developed. Eliason, explained: ?We have always believed that you need
quality to produce quality, and in the niche markets we serve, Gallus technology gives us
the edge we need. We have always worked closely with them and both companies have
benefitted from this.?

This working partnership saw two new Gallus flexo presses installed at Rotakett?s plant: a
ten-colour Gallus EM 280 in 2004, and an eight-colour EM 280 in 2007. Previous flexo work had been produced on a Gallus R 160B rotary letterpress line, fitted with flexo print heads of Rotakett?s own design. The two presses are both highly specified, offering full UV flexo and screen-printing, hot and cold foiling, laminating, and the ability to print on the adhesive side of the web. The 2004 machine marked Rotakett?s first move into dedicated flexo production, which has seen sales grow to SEK 56 million (approximately ?7m) from staff of 28.

Principle markets for the company are labels for the wine & spirits trade, body care
products, and the tobacco industry in the form of snuff. This product, which is very popular
in Scandinavia, has good growth potential, according to Anders Eliason, Bengt?s son, who
now runs the company as Managing Director. He commented: ?It?s unusual in that Swedish law dictates it cannot be advertised, and in Norway not even displayed, but it continues to grow in volume ? that really is a niche market!?

The wine label trade is for Swedish shippers who import the wine in bulk and bottle locally
for the country?s only retail source, the state run Systembolaget. According to Eliason, the
body care market used to be larger, but many of the manufacturers have moved their
production facilities out of Sweden, and now source labels from local suppliers wherever
they are. Competition in these markets comes from Dutch and Italian label converters, but
Rotakett maintains that few can match the quality and innovative techniques that have been the foundation of the company?s success.

Another partnership that has developed is that with UK company Labelgraphics, based on
Clydebank, just outside Glasgow. Also a concern with similar business ethics, and virtually
identical Gallus equipment, the two companies share ideas and usefully provide each other
with production back-up options in the event of a major problem occurring at either plant.
Rotakett has opted to stay out of the market for food labels. ?High volume, low margin work is not for us,? said Eliason. ?We cannot compete on price with the big label-printing groups, and the risks involved far outweigh the potential benefits. The focus here is on top end labels with a high degree of added value using special techniques and in some cases difficult substrates ? that?s our expertise, and it?s what we can sell profitably.?

Like most printers, Rotakett has seen run lengths decline in recent times. Typical jobs these days are around 4000 ? 5000 linear metres, but usefully, the company has an ongoing contract with a leading vodka manufacturer that brings volume and a degree of production flexibility that is required to handle short run work. By producing the vodka labels for storage and call-off as required by the customer, Rotakett can keep its presses running.

The company is currently running double-day shifts, five days a week, but is about to switch to triple shift operation.

To cater for these ever decreasing run lengths that require greater variation, Rotakett
installed one of Gallus? full servo driven Gallus RCS 330 lines in 2011. An eight-colour UV
flexo machine with rotary screen, cold foil, and lamination, its wider web width immediately proved beneficial for the company?s wine label business. Anders Eliason explained: ?It gives us the capacity to handle more substrates at high speed with no loss of quality, and is ideal for short runs because it is so quick to change over from one job to the next. The servo drive makes for easy setting and control, resulting in top quality print, with no gear marks.? The key to rapid changeovers is the ?Gallus Pit Stop? process, which, as in motor racing, requires all elements of the new job to be prepared offline and be available for use by a well-trained crew the moment the press stops.

According to Bengt Eliason, the new press also boosted morale at the plant, with staff
feeling proud to be involved with a company that uses such advanced technology.
?Although it?s still essentially a Gallus flexo press, it does require a different way of thinking and working, and we selected staff from the Gallus EM 280 crews whom we believed would be able to adapt most easily. It?s a machine you set and run, and must not be tempted to constantly adjust. You have to trust it. It doesn?t bring new flexo technology, it just makes existing techniques work so much better ? and that?s what gives us the edge over our competitors.?

With wine labels so key to Rotakett?s business, the Gallus TCS 250 offset press might have
offered a better alternative to the Gallus RCS with its lighter kiss on textured stocks, but
Anders Eliason claims that HD-Flexo techniques, combined with embossing after printing on uncoated stock, offers the offset effect with a crisper finish, and the wider web width of 330 mm is crucial to production efficiency. ?We considered the Gallus TCS 250 but rated the Gallus RCS 330 a better all round press for the mix of work we handle here. The extra
efficiency it offers is significant,? he commented.

With sales approaching ?7 million on effectively two presses, the Gallus EM 280 and Gallus
RCS 330 (the company still has the elderly Gallus Q33 for limited work), Rotakett needs its new building and an additional press to realise the growth it seeks. ?We aim to build
business within our existing customer portfolio because we understand the requirements of the Scandinavian market. Exports are only of interest if they are in niche markets that allow us to utilise our specialist knowhow and technology,? said Bengt Eliason. One particular example is the production of 3-Dimensional labels that are visually striking and have been successfully trialled on shampoo bottles and are now undergoing tests in the liquor market. They also have a unique security use as tamper-evident labels.

While representing less than five percent of the Scandinavian label market by sales value,
Rotakett has established a highly efficient and successful niche for itself with the aid of
Gallus technology, and built a close working cooperation between the two companies. As
Bengt Eliason concluded: ?Big is not always beautiful!?

Photo : Anders Eliason, with father Bengt, and Rotakett?s Gallus RCS 330
line, which they describe as the best all round press for the mix of high quality work they

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