2020 in review: China

China’s label industry in 2020 was defined by Covid-19 – by the way the country was the first to be struck by the pandemic and the first to recover to something like normal life. As such it gives a good indication of how trends elsewhere in the world label industry might work out.

The most encouraging statistic is that China’s economic recovery is accelerating. In the first quarter of 2020 when the country was felled by the first outbreak of the Covid-19 pandemic, GDP fell by 6.8 percent year-on-year, then grew by 3.2 percent in the second quarter. In the third quarter 2020 as China fully emerged from the lockdown, the economy grew by 4.9 percent.

This curve was reflected in China’s printing equipment exports over this same period. According to the China Customs Service, from January to September China’s printing equipment export volume was 1.478bn USD, down 16.6 percent year-on-year. By Q3, however, there were already signs of a strong recovery in some segments, with exports of packaging and printing products rising by 1.2 percent. Similarly, Q3 saw imports of flexo presses – mostly CI flexo machines – rise by 56.8 per cent.

Interestingly, in the narrow web segment Chinese press manufacturers actually saw an increase in business over the whole period of the pandemic, lockdown and recovery.

These trends were confirmed at a series of events organized in China’s industrial powerhouse of Guangzhou by the Labelexpo South China 2020 team in conjunction with industry partner and Chinese association PEIAC.

Zhang Yuzhong confirmed that the most important direct result of the Covid-19 pandemic on the Chinese label industry has been a concerted drive to increase automation, with the object of both reducing direct operator intervention on the press and to replace – or complement – operator skills by increasing use of machine learning and intelligence.

During the early days of the pandemic lockdown, workers were forced to leave their factory dormitories and return to their family homes in the countryside, leading to critical shortages of skilled press and pre-press technicians. Even after the first lockdown ended, transport networks were so disrupted that it was often weeks before key workers were able to return to work.

Labelexpo South China also reflected these changes by introducing a Printing Industry 4.0 zone focusing on automation, machine intelligence and digital transformation, while the Label Printing Branch of PEIAC themed its annual meeting held at the show around ‘Smart label, smart printing’. The summit focused on the practical steps converters can take to move towards automated label production and intelligent label print management.

Kevin Liu, event director for Labelexpo South China 2020, confirms these trends: ‘Affected by Covid-19 this year, we obviously feel that the process of digitization and intelligent automation of label enterprises has been accelerated. There are two main aspects to this: first, more enterprises have installed digital presses, or are putting digital printing on the agenda. Second, we are finding that medium and large-sized label printing factories in China are paying attention to the construction of intelligent factories, upgrading through the construction of ERP/MIS systems. This was the theme of Labelexpo South China’s Printing Industry 4.0 zone, where we fully demonstrated the automatic production process of a label in combination with the concept of the intelligent plant.

Looking at what press types converters plan to buy between 2020-2022, 32 percent indicated they will purchase a conventional press, 32 percent a digital press and 5 percent a hybrid press.

The ‘digital’ category breaks down into 24 percent for a toner-based press and 8 percent for inkjet. These purchasing indications were pretty much uniform across all European regions.

One striking result of the 2020 Radar survey is a collapse in converters showing an interest in diversifying into flexible packaging – very different from last year’s survey, which showed pouches as the sector with the highest converter interest. This could well reflect converters refocusing on core PS labels business during the pandemic.

Linerless labels remain one of the top markets label converters are interested in entering, coming in as number one in this year’s survey.

As many as 20 percent of survey respondents expressed an interest in entering lineless production, led by converters in the UK and Ireland and central Europe.

Post time: Jan-26-2021