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Mergers shape labelling market
BPIF McInnes reveals the future of the label industry at a special interest group meeting hosted by Xaar
Consolidation in the label industry is expected to shape the market over the next two years — that's the verdict of BPIF McInnes following a survey of label companies regarding their strategic intentions for the future. The results were announced by BPIF managing director, Marcus Clifford, at BPIF Labels' special interest group meeting, hosted by ink jet print head specialist, Xaar.
Marcus explained: “Over 55 per cent of companies in this £500 million market are pursuing or currently considering a merger, acquisition or disposal strategy. Most are looking for businesses to complement or supplement their own within the labels and packaging sector in the UK although a small proportion is looking overseas to the Continent.
“It’s clear that there is an opportunity for companies to use consolidation to boost company performance and shareholder returns in this sector, however it must be underpinned by a strategic plan, whether it be for growth, differentiation or a new business model.”
That's because, over the past 10 years, larger companies have been growing faster than smaller companies despite the fact that on average smaller companies are more profitable.
Carried out online, the survey was sent to a range of UK companies as well as members of the special interest group, BPIF Labels. Over 40 returns were received representing approximately 30 per cent of the UK roll label market and the BPIF McInnes survey was also supplemented by sector specific data from the BPIF’s own Printing for Profit survey report.
BPIF intends to extend the survey survey across other sectors including, packaging, screen and digital, finishing and binding to publish an annual update on the structural and strategic changes that are taking place.
