Flexible Packaging: Please provide an overview to this segment.
Hering: The market has shown accumulated 2.5-3% growth over the past decade. The effect of the recession meant that 2009 was one of the very few years that we didn’t see growth.
FP: What are the major trends and drivers?
Hering: There has been unforeseen increases in raw materials prices, which has put a lot of pressure for cost reduction measures. There has been a lot of innovation over the past few years. One challenge for the industry is the unknown impact of overseas companies. There is a lot of added pressure from imported materials and converted packaging from Asia. If, in the long term, products will continue to be exported from China, will the packaging be created in where the products are produced? That could have a secondary effect on flexible packaging. When you add in the mergers in positions and consolidation, there are a lot of different dynamics occurring.
FP: What are the effects of the cost pressures you mention?
Hering: There has been consolidation of raw material supplies and capacity constraints caused by lack of investments when the industry wasn’t profitable. It’s been almost like a “perfect storm” set of circumstances.
FP: Drilling down into adhesives for flexible films: What’s the reason that solventless adhesives are growing in popularity?
Hering: Basically, it’s due to the faster line speeds, the fact that there are large savings in energy cost not having to dry water or solvents, and finally from the reduction in emissions. The technology was quickly accepted in Europe, but has been seeing more acceptance over the last 10 years in North America. Today, most of the new laminating equipment is solventless.
Hering: We have been working in e-beam for about 10 years now and offer a full range of products for those applications. There has been only limited use of the technology due to a fairly high investment cost in the equipment along with a higher cost of chemicals compared to traditional materials. However, I see opportunities for this technology, especially in the area of source reduction, to replace some laminations with coatings on monolayer materials.