Feel-good Forecast? (Top Tag & Label Converters)
As recently as January 2001, many label converters still felt positive about this year's business prospects.
by Susan Friedman, Editor
A snapshot of the industry indeed. When responses to packagePRINTING's 2001 Top Tag and Label Converters Survey were heaviest, in December 2000/January 2001, converters' mood was positively, well, positive.
Consider these figures: 48 percent of respondents predicted greater output for their operations in 2001, and 42 percent predicted greater profit margins. Seventeen percent forecast flat margins for their firms, and just 5 percent saw leaner profits ahead. (Not every respondent answered these questions on the survey.)
In light of recent changes in the condition of the national economy, if a survey on the year 2001's prospects was re-conducted today, would the majority of those smiling responses now be frowns? Data from pP's 2001 survey suggests resilience in the face of the current economic downturn, as label executives indicate definitive enthusiasm for continued equipment upgrades and service expansions that will keep them primed to pounce on new business opportunities.
Sales and strategies
The tag and label converters participating in this year's survey (see list beginning on p. 62) represent nearly $7 billion in sales for 2000, with the top ten claiming just short of 50 percent of those revenues.
Respondents realized average profit margins of 13.72 percent last year, a significant bump upward from the 8.25 percent average reported for 1999. 2000's average growth rate was more comparable to 1999's, with averages hitting 10.43 percent and 10.7 percent, respectively.
Growth initiatives among the tag and label segment over the past 12 months, while not quite rampant, certainly showed up in measurable amounts on the survey. Based on comparisons of the data reported from last year to this year, 29 percent of converters added employees, 20 percent added presses, and 6 percent added plants during this time period. Just 5 percent indicated they had merged with or acquired another company.