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DATA TRANSCRIPTS: SELF-ADHESIVE MATERIALS AND MARKETS OCTOBER 2014

Self-adhesive Label Market Data

AWA published the AWA North American Labeling & Product Decoration Market Study – 2014 Labels & Labeling Edition, offering the key statistics about the North American label market in an easy to digest report. The chart below shows the North American shares of the main labeling technologies.

© AWA North American Labeling & Product Decoration Market Study – 2014 Labels & Labeling Edition

Self-adhesive/pressure-sensitive labeling still holds the main market share in North America at 51%. The total North American label market grew at 2%, with sleeve labels enjoying the highest growth rate at 3.1%.

51%

31%

11%

2% 5%

Pressure-sensitive Glue AppliedSleeve In-moldOthers

In this issue: Self-adhesive Label Market Data Markets Materials and Products Equipment The Environment Company News People November Events

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Markets

Food and Beverage

Anheuser-Busch InBev announces management changes from the beginning of next year. Pinto Paiva, currently chief sales officer, will replace João Castro Neves as CEO of Brazil-based AmBev, and Zone President for Latin America North. Castro Neves becomes A-B InBev's Zone President North America, replacing Luiz Fernando Edmond, who takes over as chief sales officer. Anheuser-Busch InBev subsidiary SUN InBev has announced it will close its Angarsk brewery in East Siberia citing higher taxes and toughened regulation – its fourth plant closure in Russia in two years. Diageo is building a new distillery in Shelby County, USA, to be named The Bulleit Distilling Co, expected to be operational late 2016. Euromonitor predicts that China will overtake USA to become the world’s largest dairy market by 2017. Driven by the country’s growing appetite for milk, cheese and yoghourt, China’s dairy market will double in size to $70bn/€55m by 2019.

18%

10%

9%6%

5%4%

3%3%3%

3%1%

35%

ABInBev SABMillerHeineken CarlsbergChina Resource Brewery Ltd Tsingtao Brewery GroupGrupo Modelo MolsonCoorsYanjing KirinEfes Group Others

Global Market Shares by Major Brewer – Beer Production Volume. 2012 © Barth report, from AWA Global Beer Label Market Study 2013

Anheuser-Busch InBev is the

largest global brewer in terms of

beer production volumes

Growth of Leading Eight Dairy Markets 2014 © Euromonitor International

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UK ‘traffic light’ food labeling: the European Commission has officially opened litigation proceedings against the UK for its voluntary traffic light food labelling system, introduced last year. The front-of-pack system ranks sugars, fats, saturated fatty acids, and salt by colour per 100g, but, the Commission says, creates negative inferences of ‘good’ and ‘bad’ nutrition content. Whisky: Johnnie Walker maintains its leadership of the duty-free spirits world. Despite a decline of -4.5% in 2013, the brand has maintained its strong lead over second-largest travel-retail brand Absolut, which also declined in 2013. Johnnie Walker’s decline is almost entirely attributable to massive declines in important Asia-Pacific markets, whereas Absolut’s biggest loss came from the Americas. The strongest growth of the top 10 travel-retail brands came from Jack Daniel’s, which overtook Chivas to take third place.

Total volumes of spirits in the travel-retail market increased 1.4% globally in 2013, to reach

21.6m nine-litre cases; the top 100 brands accounted for 85% of these.

Top 10 of the IWSR's Travel Retail Top 100 list

Rank/Brand Owner Volume 2009

Volume 2012

Volume 2013 % change 2013 on '12

%CAGR 2008-'13

1 Johnnie Walker

Diageo 1,482.4 2,319.6 2,216.2 -4.5 6.6

2 Absolut Pernod Ricard 859.5 1,001.8 897.5 -10.4 -3.2

3 Jack Daniel's Brown-Forman 434.8 730.5 876.5 20.0 11.9

4 Chivas Regal Pernod Ricard 598.0 897.9 856.9 -4.6 2.1

5 Bacardi Bacardi 575.5 695.3 696.1 0.1 1.6

6 Baileys Diageo 605.6 698.4 673.3 -3.6 -1.1

7 Smirnoff Diageo 581.8 623.0 620.7 -0.4 0.0

8 Ballantine's Pernod Ricard 381.7 564.4 581.2 3.0 3.3

9 Hennessy LVMH 270.0 476.6 482.8 1.3 13.8

10 Finlandia Brown-Forman 267.4 354.4 403.8 14.0 3.8

All volume figures in thousands of nine-litre cases © The IWSR Database 2014/International Wine & Spirit Research

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Wines Rabobank’s Q3 report on the world’s wine markets says that, apart from France, wine grape production appears to be declining in 2014 over prior year. Although official estimates from the OIV (International Organisation of Vine and Wine) have yet to come, Rabobank believes global production could decline 2-4% this year.

Graphic Arts

Circle Graphics (USA), major superwide/grand large-format printers, have acquired Boston-based Mammoth Media, OOH/transit specialists. FESPA has appointed Thomas Struckmeier and Christophe Aussenac to its Board of Directors, on the retirement of Michel Caza and Ricardo Rodriguez Delgado. Thomas Struckmeier represents FESPA’s German national association BVDM (BundesVerband Druck & Medien). Christophe Aussenac is President of FESPA France Association, the autonomous French national association. Markets and Markets’ new market report, Large Format Printer Market by Print Width (17” to 72” and above), Ink Type (Aqueous, Solvent, UV-Cured, Latex and Dye-Sublimation), Application (Apparels, Signage, Advertising, Tile Murals, and CAD), and Geography -- Global Forecast to 2020, expects the large format printer market’s value to reach up to $9171.20 million at a CAGR of 6.69% from 2014 to 2020.

18%5%

18%59%

Screen Offset Computer Cutting Digital

Global Market Breakdown by Imaging Technology – 2012 © AWA Global Pressure-sensitive Graphic Arts Film Market Study 2013

Digital is the most widely used print

technology for self-adhesive graphic

arts films, and its share is still

increasing

-30-20-10

01020304050

% Increase/ Decrease in Production Volumes 2012/2008 © OIV, from AWA Global Wine Label Market Study 2013

Large format printer market’s value

2020 value (forecast) $9171.20 million

CAGR% 2020/2014 6.69%

© MarketsandMarkets

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Spandex has acquired Polynorma, specialist suppliers of equipment, materials and inks to signmakers, digital and screen printers across Spain.

Medical

The medical device market in Western Europe continues to be constrained by weakness in the eurozone, which is struggling to recover momentum. A substantial improvement in Western Europe’s GDP figures looks increasingly unlikely in the short term, with Business Monitor International (BMI) forecasting that eurozone GDP growth will average just 1.3% over the next five years compared with global economic growth of 3.2%. This financial uncertainty is negatively impacting the Western European medical device market as fiscal deficits ramp up the pressure to implement further cost-containment measures. With a medical device market valued at US$88 billion in 2014, Western Europe continues to account for slightly more than a quarter of the global medical device market. However, market growth in Western Europe is undeniably the slowest of the world’s major regions, with the medical device market projected to grow at a 2014 to 2019 CAGR of 3.7%, according to BMI’s latest medical device market forecasts. This is only around half the global CAGR of 6.6%, meaning that the region’s share of the global market is forecast to drop to 22.6% over the next five years. Growth rates expressed in U.S. dollars in eurozone markets are forecast to dip in 2015 and 2016, owing to further depreciation of the euro against the U.S. dollar. A return to higher growth towards the end of the forecast period is expected, however.

Personal Care

African beauty market: According to new market research by Mintel, the African-American hair care market will reach US$774m in 2014. Coty Inc has submitted a binding offer to Chanel to acquire its Bourjois cosmetics brand for 15 million Class A Coty shares, worth approximately US$239m, in response to which Chanel has agreed to enter into exclusive negotiations.

5.1

3.8

1.7

3.7

0

1

2

3

4

5

6

CA

GR

% 2

014-

201

9

Western Europe: Projected Medical Device Market CAGR, 2014-2019 (%) © BMI

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Russian cosmetics market: Global cosmetics producers are considering revising their development strategies in the Russian cosmetics market due to the recent drop in sales in the region and poor future prospects. The ongoing military conflict in Ukraine and sanctions imposed on Russia have already resulted in the decline of purchasing power of local consumers.

Packaging

Packaging print: According to a new report from the US Association for Suppliers of Printing, Publishing and Converting Technologies (NPES), packaging is the fastest-growing business segment for print, with forecast sales growth through 2017 at 4% annually, when sales are forecast to hit $288 billion worldwide; and by 2017, packaging will account for an estimated 43% of print product sales.

Retail

Brick Meets Click (BMC), say that by 2023, US online grocery sales are projected to range between $80 billion and $123 billion. If realized, at the middle of those two projections online grocery sales would exceed today's sales of the nation's largest supermarket chain, Kroger. Online grocery store sales account for about 4% of market-level spending, but over the next decade it's expected these sales will account for between 11% and 17% of the total, with some major markets such as New York and San Francisco potentially exceeding that level.

2017 Packaging Market by Segment (bln US$) © NPES

Russian Cosmetics Market

2014 value (forecast) RUB500bn (US$14.2bn)

Growth 2014/2013 -5% to -7%

© Russian Ministry of Industry and Trade

Projected US online grocery sales © BMC

0

20

40

60

80

100

120

140

2023 downsideforecast

2023 upside forecast

Bill

ion

US$

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SyndicatePlus, www.syndicateplus.com, have published an interesting downloadable report on

European online grocery shopping, which includes these charts:

© SyndicatePlus

Consumers more often shop in a

physical store than buying online

but the average amount of

money spent on groceries per

online order is higher than the

average amount spent in store

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Materials and Products

Adhesives

Drytac removable and repositionable adhesive on WallTac™ matte PVC film is now renamed ReTac™ ultra removable adhesive technology for a broad range of applications such as wall graphics, labels and tape. The two WallTac™ qualities – 3.5 and 6.0 mil matt white polymeric films – that carry the ReTac™ adhesive are now called ReTac™ Wall.

Specialty Papers

James Cropper has launched a range of specialty papers Incorporating 10% fibre from ground cocoa shells.

Facestocks

Aslan-Schwarz has launched ASLAN DFP 46 WrapTheStreet, a white PVC for indoor/outdoor floor-graphic applications, with a water-resistant adhesive. FLEXcon has launched REFLECTAmark PM400 White Reflective two-year-life glass bead coated polyester film, thermal printable, for long-range barcode scanning in warehouse applications; and new thermal-transfer-printable clear and white polypropylene films to their THERMLfilm NEXgen portfolio, UL approved, for durable applications.

Global Shares of Specialty Papers and Paperboards © AWA Specialty Papers and Paperboards Global Sourcebook 2013

35% of specialty paper and

Paperboard production takes place

in Europe

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Mohawk’s new Inkjet Media adds a new surface technology for synthetic materials for the Memjet-class wide-format inkjet printers, and includes an aqueous matt coated polyester with a PS permanent adhesive. UPM Raflatac has launched a new logistics labelstock, Vellum Logistics Fit, whose thin label face is matched with HG45 release liner (instead of HG65), for more labels per roll, and RH 6 adhesive, which performs well in conditions from chilled to room temperature, on substrates including cardboard and stretch film. NewPage has launched Reflections™, a 60 lb/89gsm high-gloss, label paper, FDA-compliant for direct and indirect food contact, suits high-end wet glue and pressure sensitive applications. Suited for spirits, wine, and pharmaceutical labels, the product is also available with third-party chain-of-custody certifications to FSC®, SFI®, and PEFC™. Technicote has added six new products to its Techni-Jet line of self-adhesive label materials, which consists of premium paper and film labelstocks for print-on-demand digital print, all compatible with one or more types of digital printing such as toner-based laser, UV inkjet and aqueous inkjet.

Constantia Flexibles – Label Group have worked with Guinness on their latest releases Guinness Dublin Porter and Guinness West Indies Porter. The choice was for a pressure-sensitive label substrate to give the labels an authentic design. Constantia commented that the natural, craft look is a key emerging trend and that the paper substrate lends itself perfectly for this.

North American Pressure-sensitive/Self-adhesive Laminate Production — Face Stock Materials, 2012 © AWA North American Label Market Study 2013

The releases of new bases by

NewPage and Technicote

illustrates the significance paper

has for pressure-sensitive

labeling. This is reinforced by the

statement from Constantia.

26%

10%10%

5%7%5%

11%3%

3%5%

13%

2%

Food BeverageHealth & Personal Care PharmaceuticalsHousehold Chemicals Industrial ChemicalsTransport & Logistics AutomotiveConsumer Durables Office ProductsRetail Other

European Self-adhesive Label Market by End Use 2013 © AWA

78%

22%

Papers Films and Synthetics

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Inks/coatings

Ashland Specialty Ingredients has obtained certification by the Rochester Institute of Technology (RIT) for 13 UV and water-based overprint varnishes within the PureRad and PureKote overprint varnish (OPV), product lines. The products are now commercially available for use with HP Indigo narrow web printing presses.

Tapes

Polyken launches two long-term medical adhesive tape products designed for long-term wear applications, delivering breathability for maximum patient comfort and resistance to perspiration-borne moisture for exceptional long-term adhesion: 3558B Acrylic Transfer Tape and 3570A Non-Woven tape. Suitable for applications including device assembly and mounting, patient monitoring, and sensor components.

Global Specialty Pressure-sensitive Tape Market by End Use, 2011 © AWA Global Specialty Pressure-Sensitive Tapes Market Study & Sourcebook 2012

12%2%

11%

15%

13%8%

5%

15%

11%

1%

5%1% 1%

Automotive AerospaceWhite Goods ElectronicsElectrical Paper/PrintingBuilding/Construction MedicalHygiene Defense/MilitaryRetail/Graphics Sports/Entertainment

Medical is among the largest end

use segments for specialty

pressure-sensitive tapes

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Equipment

Heidelberg has launched the new 8 color hybrid digital label press it has been working on with Gallus and Fujifilm. The Gallus DCS 340 (Digital Converting System) is designed for the self-adhesive labels market, which Heidelberg believes is growing by around 4% p.a, and will cost $1,630,000/€1,282,000. Mark Andy has launched its Digital Series hybrid inkjet/flexo press, with a 6-color UV inkjet module (CMYKOV+W), into a P7 press line.

Where are Digital Presses Being Installed? © Tarsus

The share of digital presses

installed worldwide as a

percentage of total press

installations is increasing. The pie

chart shows in which regions

those digital presses are being

installed

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The Environment

© AWA Global Label Market Development Survey 2014. Question: How important, in the context of your market are the following environmental statements?

Asia Pulp & Paper (APP) has demonstrated its commitment to safeguarding the world’s forests and helping tackle climate change by signing the New York Declaration on Forests at the UN Climate Summit 2014.

BICEP – Nestlé and Kellogg's have joined Ceres' Business for Innovative Climate and Energy Policy, an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation. Launched in 2008 with a core group of five companies, including Starbucks, Nike and Timberland, BICEP since has expanded to 32 businesses from a broad spectrum of sectors, such as eBay, Symantec, Jones Lang LaSalle, Unilever, and General Mills.

FESPA has re-launched its respected Planet Friendly Guide in a new format consisting of a series of ‘mini’ guides. In addition to the introductory guide entitled ‘Sustainability and the Future – How Can Printers Meet the Challenges? The 10 subject guides cover: Pollution for Screen Printers, Pollution for Digital Printers, Hazardous Substances for Screen Printers, Emissions to Water for Screen Printers, Emissions to Air for Screen and Digital Printers, Waste for Screen Printers, Waste for Digital Printers, Paper and Other Substrates for Screen and Digital Printers, Environmental Management Techniques for Screen Printers, Energy for Screen and Digital Printers.

0% 50% 100%

These issues will have a major effect on my business in 5years time.

Issues about recycling waste are affecting my business.

My company has taken measurable efforts to assist insustainability.

How important will sustainability/recyclability/environmental initiatives be to your business in 5 years?

How important are sustainability/recyclability/ environmentalinitiatives to your business today?

How important is the impact of environmental guidelines byretailers and end users to your business?

Very Unimportant Somewhat unimportant

Neither unimportant nor important Somewhat important

Very important

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Company News 3M has opened a Customer Innovation Centre at its UK HQ in Bracknell.

Amari Plastics opened their first group distribution base in Northern Ireland in Belfast last month. Avery Dennison The new portfolio of materials for labeling tires took the Innovation Award for companies with over 300 employees at the Label Industry Global Awards. BASF announces a new organizational set-up for its paper chemicals business. As of 1 January next year, the paper chemicals division will be dissolved and its different businesses continued in other divisions of the company's performance products segment. As a result, BASF will cut 50 jobs worldwide. The divisional headquarters in Basel, Switzerland, will close by the end of 2014. H.B. Fuller has expanded its Chinese plants in Guangzhou and Nanjing to support its nonwoven hygiene customers, manufacturing primarily for the domestic market and for the broader Asia Pacific region. The company, who acquired Forbo’s Industrial Adhesives business in 2012 which had two plants in Guangzhou, has now integrated the two plants into one world-class facility, tripling the capacity for hot melt adhesive solutions, including PSA hot melt for hygiene. In addition, Fuller is in the process of expanding its Nanjing capabilities to include PSA manufacturing to better serve its growing hygiene customer base in that part of China.

©AWA. Data from: ‘Global Adhesive & Adhesive Technology Assessment for Pressure-sensitive Materials 2012’ and ‘AWA Adhesive Technology Seminar 2014 Presentation Pressure-sensitive Technology Market Overview by Jackie Marolda, Senior Consultant & Vice President, AWA’

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HP have opened a new 226,000 square-foot Centre of Excellence (CoE), and expanded the HP Indigo ink manufacturing facility in Singapore.

Nestlé has redefined its regional structure, and Zone EMENA (replacing zone Europe) includes from Jan 1 2015 Maghreb, Middle East, North East Africa, Turkey, and Israel. Luis Cantarell takes on responsibility for the new Zone EMENA, remains on the Board of Nestlé Health Science, but hands over responsibility for Nestlé Nutrition to Heiko Schipper, currently Global Business Head of Infant Nutrition, who will be appointed Deputy Executive Vice President in charge of Nestlé Nutrition. Greg Behar will become CEO of Nestlé Health Science. Roland DG has moved its Belgian headquarters from Oevel to Geel. The new building houses offices, meeting rooms, a showroom, a training facility and a technical area.

Mergers & Acquisitions

Cascades Fine Papers Group sold to H.I.G Capital, USA, to be renamed Rolland Enterprises.

Glatfelter has signed a definitive agreement to purchase all the outstanding equity of Spezialpapierfabrik Oberschmitten (SPO) from FINSPO Beteiligungs-GmbH for EUR 8.5 million. SPO has annual sales of approximately EUR 25 million (U.S.$33 million). SPO’s plant near Frankfurt makes highly technical papers for a wide range of electrical applications and glassine products are used in cosmetics and food packaging and pharmaceutical dosage bags.

Henkel has signed an agreement to acquire the Bergquist Co., a supplier of thermal-management solutions for the electronics industry. In fiscal 2013, Bergquist reportedly generated sales of around €130 million (~ $165 million).

Macfarlane Group PLC has acquired Network Packaging, UK packaging materials distributor.

0

10

20

30

40

50

60

70

Supply Chain Converters

Average = 40

Global Labels M&A Activity, 2003-2013 © Blaige & Company, taken from AWA Labeling & Product Decoration Global Market Update 2014

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November Events

2-4 November 2014: AIPIA (Active and Intelligent Packaging Association) Congress 2014, Chicago, USA

2-5 November 2014: Pack Expo International 2014, Chicago, USA

3-4 November 2014: AWA Introduction to Pressure-sensitive Adhesive Workshop 2014, Amsterdam, NL

3-5 November 2014: SB 2014 LONDON: Sustainable Brands Conference, London, UK

4-6 November 2014: Packaging and Converting Executive Forum (PACE) Asia, Singapore

5-6 November 2014: Packaging Innovations 2014, Madrid, Spain

5-7 November 2014: Viscom Frankfurt 2014, Frankfurt, Germany

5-7 November 2014: 22nd Annual European Ink Jet Printing Conference, Barcelona, Spain

6 November 2014: Digital Print for Brand Success Conference, London, UK

10-11 November 2014: Asian Packaging Conference, Kuala Lumpur, Malaysia

11-13 November 2014: Brau Beviale 2014, Nuremberg, Germany

13-14 November 2014: Pack2Go Europe Autumn Meeting, Brussels, Belgium

14-17 November 2014: 5th All in Print China, Shanghai, China

17-19 November 2014: Wine Vision 2014, London, UK

17-20 November 2014: Emballage, Paris, France

18-20 November 2014: Food Matters Live, London, UK

19-20 November 2014: Expoplast 14/Packex Montreal, Montreal, Canada

19-21 November 2014: FESPA China 2014, Guangzhou, China

26 November 2014: Packaging Innovation: Making it Happen for Your Brand Seminar, Birmingham, UK

25-27 November 2014: European Paper Week, Brussels, Belgium

26-27 November 2014: Printed Interior Decoration Conference, Düsseldorf, Germany

People Ahlstrom Corporation has elected Robin Ahlström Chairman of the Board as of October 1, 2014 – he was previously Vice Chairman.

Contra Vision appoints Roger Hill Managing Director and President of Contra Vision North America, succeeding his father Roland Hill, who remains as chairman and head of IP, innovation, and technology. Esko has appointed Udo Panenka as Senior VP, Sales and Jon Giardina, VP Americas – both ex Danaher. Kocher + Beck appoints David Morris President of Kocher + Beck USA LP. Tullis Russell appoints Niall MacDonald director of its premium paper and board business in Markinch, Scotland. UPM Raflatac has appointed Antti Jääskeläinen as Senior Vice President for its EMEIA labelstock

business (Europe, Middle-East, India & Africa). He joins UPM Raflatac from sporting goods company

Amer Sports where he was Senior Vice President, Global Operations.

Xeikon has appointed Patrick McCarthy VP Operations and Todd Blumsack VP Sales and Marketing

for the North American operations.

Xennia has a new MD: John Anderson.

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Publisher

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