UNFEA* is alerting the french government to supplies for the adhesive label sector and to the high risks of disruption to the French manufacturing industry in the coming months
The majority of products on the market have one or more adhesive labels. In addition to the marketing and aesthetic aspects, the latter have consumer information, logistics, regulatory and security functions. Running out of adhesive labels is therefore absolutely impossible for the vast majority of industry and French distribution chains, regardless of the sector of activity: agri-food, pharmaceutical, hygiene and care, automotive & aeronautics industry. , wine and spirits sector, cosmetics, logistics, etc.
Without labels…France stops !
The economic recovery in 2021 had begun to worryingly tighten the supply chains of PP, PE, Paper and more specifically certain chemical components of adhesives, all this being accompanied by price increases never seen before.
Since the beginning of January 2022, a strike on all the industrial sites of the paper-making group UPM, one of the biggest players in the sector, has ended up plunging the entire sector into crisis by amputating the European production capacities of adhesive laminates , raw material for label manufacturers, from 30% to 40%.
Lead times for self-adhesive laminates have gone from a few days to several months and prices are out of control.
The Ukrainian crisis and its consequences on gas and oil prices, on which the paper industry and PP/PE prices depend enormously, will end up increasing pressure on prices.
Stocks are soon exhausted at label manufacturers and suppliers and no improvement is expected before the second half of 2022.
Adhesive labels, as demonstrated during the pandemic, are essential to the proper functioning of the economy. Too long ignored, this packaging must be able to have seriously constructed business continuity plans because of its strategic positioning in the industrial and logistics sphere.
UNFEA therefore alerted the Minister Delegate to the Minister of Economy, Finance and Recovery, in charge of Industry, Ms. PANNIER – RUNACHER on the need to bring together around a table all the essential actors of the sector to act in the short term, but also to build solutions that will make it possible to avoid the next crisis.
In a very demanding market but dependent on future supply difficulties, our members are increasingly forced to break up orders received into several deliveries to serve their customers fairly and proportionately. All these production difficulties combined with soaring prices will have an immediate impact on cash flow. The UNFEA is particularly attentive to the fate of the smallest companies (<2 M€ of turnover) which represent 60% of the companies of a sector of 400 companies in France and rich of 7500 men and women passionate about their profession.
*The only professional federation of the sector in France, the National Union of Adhesive Label Manufacturers (UNFEA) has been committed to its 106 manufacturer members and 72 suppliers for 50 years to defend the interests and image of the sector.
Note: Further information as to UNFEA's communication on the subject can be found on their website.