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30-04-20 - FINAT Blogs

Klemens Ehrlitzer, VskE, responds to FINAT Webinar Covid-19 #3

Within the framework of informing their members about developments in the label industry during the Covid-19 crisis, FINAT has been organising a series of webinars through which members and representatives of the national label associations can exchange experiences and best practices.

To develop discussion and interaction during the latest FINAT Covid-19 webinar on 28 April a poll was introduced with the following question “What are the 3 priorities for resuming operations in the coming 2-3 months”. The following responses were recorded:

  • Raw materials 65%
  • Labour disruption 60%
  • Financial issues 55%
  • Logistics 50%
  • Occupational health and safety measures 40%
  • Other 5%

How is the largest label market in Europe dealing with Covid-19? Klemens Ehrlitzer, Managing Director of the German label association VskE, addresses some of the key questions which were also raised during the Covid-19 webinar.

Q: How does VskE expect the market to react and how will the country’s operations evolve in the coming months?
Klemens: “At the moment there is no foreseeable sign of returning to normal life as it was in the pre-Covid-days. In Germany, the restrictions imposed led to a situation where the number of infections decreased. The health system was easily able to cope with the daily cases on a day to day basis. It was even possible to accept Covid patients from other countries into the intensive care units within German clinics. “

“In light of this, the German government has now started to ease some of the restrictions. In addition to the stores and supermarkets that had remained open, now other retail outlets are being allowed to reopen. One criterion for reopening is the size of the stores, e.g. smaller than 800 square meter of sales area. Schools will start to replace the online lessons with face-to-face lessons for those classes that have final examinations this year. The automotive industry began to reboot the production to some degree.”

“Special challenges in Germany: government measures are interpreted differently by the 16 states. This means that opening dates, criteria, which stores can open, etc. varies from one state to the next. Example: While DIY stores were closed in one state but open in a neighbouring state “shopping tourism traffic” was observed. This resulted in the drivers from neighbouring states being fined by police who were checking the roads for non essential journeys.”

“The label industry has not been hit by the governmental restrictions up to now. According to several statements from different ministries, the packaging and label industry is considered to be part of the critical infrastructure to assure security of supply with food, medical products and other essential goods.”

“The German Federal Ministry of Labour and Social Affairs published an occupational health and safety standard. (This document is available on the special FINAT Covid-19 page)”

“How the production from the label converters developed in the past Covid-19 weeks depended on the market segment, e.g. industrial labels for automotive customers had to accept considerable reductions while the food or pharma sector showed a higher demand than usual. Converters which normally cover markets like events, restaurants, clothing are suffering severely.”

“With easing of the restrictions a discussion started about the effect on the economy completely. The majority are in favour of a slow step-by-step process to avoid a stop-and-go-effect. It is very likely that the special Covid-19 situation with some kind of restrictions will continue in the coming months to keep the infection curve in Germany as flat as it is now.”

Q: Which measures have companies taken to survive the crisis in terms of business contingency plans, cashflow and working capital, short term redundancies, government support?
Klemens: “They have chosen furloughing, short-time working and special programmes for SMEs from government.”

Q: What is the likely impact of the disruption of the supply chain in Asia for the label supply chain?
Klemens: “To VskE’s knowledge it is not an issue among the members currently.”

Q: How can FINAT and the national label associations help their members with their disaster recovery (DRP) plan?
Klemens: “It would be a good idea to maybe schedule a webinar with DRP experts”.