Last time I visited Rosupak was in 1997. It was a modest show with a crowded space hosting 154 exhibitors from 16 countries in two halls. Six years later, Rosupak’03, held at Moscow’s Sokolniki Culture and Exhibition Centre, sprawled 14 halls occupying almost 360,000 square feet. Over 800 companies from 32 countries presented modern equipment, materials and technologies to the ever-growing market of domestic food processors, soft drink and liquor enterprises, pharmaceutical industry and equipment manufacturers. Setting records in the number of exhibiting companies and exhibit space, the show ran in an enthusiastic mood quite visible during the show conferences, presentations and other activities, despite the world’s current concerns in Iraq, the Middle East, SARS and the weak economic climate.
The 8th exhibition in a row, Rosupak’03 was organized by the newly created Russian media holding MVK (International Exhibition ompany), Sokolniki Culture & Exhibition Center together with Sojuzupak, a non-profit association of manufacturers and consumers of packages and packaging products. Rosupak’03 has enjoyed a wide variety of supporters and patrons - Ministries of Industry, Science, Technology, Economic Development and Trade of the Russian Federation and the Moscow Chamber of Industry and Commerce. Among active supporters of the show was Packmash, a newly established non-profit association of packaging and processing equipment manufacturers. Packmash’s creation reflects the growth of domestic packaging equipment makers who are utilizing the vast resources of the former Soviet Union military-industrial complex. This equipment may not be competitive in the world market; however, with the low price tag and simple yet robust design, it finds customers in local industries. At the present time, Russia’s share of packaging equipment manufacturing (around $50million/year) is insignificant compared to the world market of $4.5 billion.
In addition to the 8th traditional show contest for the best package – “Package-Russian Star-2003” and the 5th international conference “Food Packaging-2003”, the show organizers offered the Luxpack-2003 Salon in a separate dedicated hall. The Luxpack-2003 Salon was introduced as a show vehicle to promote domestic super high quality, elite package designs for cosmetics, jewelry and gifts.
The importance of Rosupak was highlighted by the presence of World Packaging Organization (WPO) officials Dr. Alexis Stassinopoulos, President and Carl Olsmats, General Secretary. At the show’s opening ceremony, featured with a symphony orchestra introduction, Stassinopoulos addressed world packaging issues and controversies.
Russia is still in the process of developing recycling laws for packaging, having in mind the costly “green dot“ approach gaining popularity in Europe. Curbing packaging waste has not become an issue in Russia as of yet.
On-site visitor registration was first introduced in 2000 and has gained full capacity this year with on-line registration. The show organizers provided shuttle buses for transportation and ran an excellent Russian-English website with information links to all exhibitors.
International presence
The majority of Western suppliers operate in Russia and other CIS countries through companies-dealers and provide the broadest possible range of goods and services for the market. These companies were established in the early 1990’s in the era of rapid privatization and grew stronger year-by-year acquiring expertise in business and the new trade laws.
Apostrof Print has been operating in the Russian market since 1994. This company is one of the leading suppliers of imported equipment and materials for package and label printing in Russia with branches in the North-West (St. Petersburg), the South (Rostov) and Siberia (Novosibirsk). At Apostrof’s spacious booth the Taiwanese company Kung Hsing presented a working production line making PE bags and featuring the high speed blow film extruder FLL.
Variant, with branches in the Ukraine and Byelorussia , sells Mark Andy narrow web printing presses and Fischer & Krecke flexo presses, in addition to a wide variety of pre-press, converting and printing equipment.
Artmark Label Systems Ltd., representing die maker Kocher & Beck (Germany), sells self-adhesive materials from Avery Dennison, inks from Akzo Nobel and date coders from Markem (USA). The company’s fully trained and certified personnel operate from three facilities in Moscow, St. Petersburg and Rostov.
Itraco, a German owned Russian subsidiary of Itraco GmbH from Lubeck, occupied one of the biggest booths at the show (trademarks BHS, Nilpeter, Praxair and 50 more from Europe, Canada and Japan). With their main office in St. Petersburg and 17 branches all over the country, Itraco employs over 500 people in Russia.
Yam International from Moscow supplies prepress systems from Fuji, Xeikon digital sheet fed presses, Carint-Cargraf flexographic presses, and printing photopolymer plates from MacDermid and Toyobo. In its 5,400 square ft booth Yam demonstrated several Komori Lithrone printing machines, printing press roll products, inks, film and chemicals.
Big names in printing equipment were represented by Heidelberg and Windmöller & Hölscher. At the show, Heidelberg CIS, the Russian subsidiary of the printing giant, featured the Speedmaster CD 74 press. The company markets its line of Gallus narrow web label presses (the sales number is over 200), and monolayer blown film extrusion lines for the production of the highest quality polyethylene films. W & H, with its relatively modest booth, kept its presence in key Russian converting companies during the show. Their Russian-speaking staff was involved in presentations and seminars run by domestic customers. The W & H flexographic press Astroflex with rotogravure section Heliostar has become quite popular in Russia’s flexible packaging industry.
Sun Chemical Moscow Printing Inks, a Russian offspring of Sun Chemical Europe, occupied the most spacious and exotic stand at the show. It was built like an Egyptian temple, using a Vegas style approach to boost the sales of printing inks.
Since socialism ended in Poland and the Czech Republic 14 years ago, these former Soviet allies became very important trade partners of the new Russia. Given the rapid expansion of the packaging business in Eastern and Central Europe, it was natural to observe the Czech Republic’s collective pavilion featuring 27 companies offering a wide variety of products and services. Over 40 companies from Poland were represented at the show including Polish subsidiaries of major multinational corporations. The insignificant presence of Turkish and Chinese companies at the show could be explained as a consequence of the recent war in Iraq and the SARS epidemic in China.
Flexible packaging rules the show
The global flexible packaging market is characterized by stable, gradual growth in developed countries as opposed to very high, almost explosive expansion in the former Soviet Union region, where consumerism was as bad a word as capitalism. The Russian flexible packaging market, according to local sources, is growing at approximately 30% per year. The largest share of this market belongs to food packaging. This share constantly grows as population and food consumption increase. After August 1998, when the ruble fell and prices for imported goods skyrocketed, packaging industry growth has been stimulated by the ever increasing number of local foodstuff producers.
The dominance of flexible packaging was quite visible at the Rosupack’03 show. Some well-known package suppliers chose to add flexible packaging to their established product lines and affirm their presence in this attractive market. This leads to an overall increase in demand for high quality substrate and printing. Up to recent times the lack of domestically produced high quality substrates can still be felt. Russia is now manufacturing a wide variety of film, foil and laminates. However, it still imports almost 100% of polypropylene film for flexible packaging from worldwide sources. The Turkish flexible packaging industry is very active in Russia, exporting packages as well as packaging materials. This situation is creating an economic challenge for Russian flexible packaging manufacturers in gaining printing/laminating capacity and competing against low cost (2-5% custom duty) imports from Turkey and Taiwan.
Nordenia International AG, a family owned company, is a worldwide leader in flexible packaging. With over 3,000 employees and 27 locations in four continents, the company recently purchased a one hundred percent share in the company Slavnika in Russia. Slavnika is located 82miles north-east of Moscow in Pereslavl-Zalessky. Founded in 1994, the company is a leading manufacturer of packaging films on the Russian market. Their market segments include food and beverages, detergents and cleaning agents, beauty and health care products, hygiene products and pet supplies. With a staff of 164 employees, Slavnika operates state-of-the-art equipment including direct drive Novoflex, the 40-in eight-color CI flexo press made by Windmoeller & Hoelscher. Nordenia decided to buy this Russian company in order to further support its business relationship to strategic customers such as Mars, Nestle, Henkel, Procter & Gamble, and Unilever. Newly created Nordenia Slavnika, together with 10 year old Nordenia Hungary and Nordenia Polska, will form the fastest growing part of the company’s flexible packaging business in Central and Eastern Europe. Sales in the region grew 20% in 2002. During the company presentation at Rosupak’03, Michael Heikenfeld, representing Nordenia’s Board of Directors, spoke very optimistically about the future.
RusAl (Russian Aluminium), the second largest aluminum producer in the world, became a major player in the market after the 2000 merge of the principal domestic aluminum mills, mines and smelters into a giant holding. With an 82,000 ton annual packaging foil output, the company holds 73% share of this market in Russia.
Joint-stock company Sayanskaya Folga is RusAl’s largest foil producer and the only mill in Russia with a full production cycle from slabs to foil. It was founded in the 1980’s in Sayanogorsk, Siberia near key sources of raw materials and a hydro-electric power plant, and since 1995 operates as a diversified supplier of flexible packaging based on aluminum foil. Sayanskaya Folga delivers packaging grade foil for food, beverage and tobacco industries, including 2 and 3-ply foil laminations with gauges between 0.00635 - 0.040 mm. Current capacity of the mill is 47,000 tons of aluminum foil per year. Building a company of such size became a unique experience for multiple international contractors such as R.J. Reynolds International (USA) and FATA (Italy).
Canadian-based Alcan Packaging is a relatively new name in the packaging industry. This multinational, market-driven company, a global leader in aluminum, packaging, and recycling, combines the capabilities of several industrial groups related to this business, including the former packaging and foil rolling operations of the Alcan Group. With $3.5 billion in sales, 53,000 people and over 90 plants located in 18 countries, Alcan Packaging offers total packaging solutions for pharmaceutical, cosmetics/personal care, food and tobacco industries. Company presence in Russia is supported by its Moscow office.
A company from St. Petersburg with a mission
Most flexible packaging converters in Russia are simply trying to stay busy in the current tense economic climate. Especially so, because of market pressure from low cost imports originating in Turkey and Taiwan. Starting up a new business in this field would appear to be a great challenge. But that is exactly what ConFlex from St. Petersburg has accomplished. This privately owned company’s market presence is already quite strong and professional despite being only two years old.
ConFlex occupies three production facilities with 60,000 square feet of floor space. The company employs 200 people and makes 350 tons of flexible packaging monthly. The Prepress Department employs six young and highly experienced professionals who belong to an elite group of Russian graphic artists, a field encompassing many hundred year old traditions. Growing up in one of the world’s most beautiful cities filled with architectural and classic art masterpieces, they have acquired computer skills in graphic design and access to modern hardware. The ConFlex Design Studio uses the newest Barco Graphics computer-to-plate technology with laser engraving, allowing a fabrication of printing plates for flexo presses nearly matching in quality to rotogravure. Unsurprisingly, packages made by ConFlex collected a number of awards in the “Package-Russian Star-2003” competition.
ConFlex operates with a mission in mind: to supply modern flexible packaging not only for traditional Russian food industries, such as milk products (ice cream, chocolate glazed sweets), candy, cakes and dried fish specialties, but also pasta, potato chips, frozen foods and cosmetics, utilizing the best imported technologies and equipment. The company imports material ingredients from a variety of suppliers: film from Exxon Mobile Europe, Manulli, Polysack, FIAP, Neograf, and Moplefan; inks from Sun Chemical; paper from UPM, Ahlstrom, Stora Enso, and Metsa Serla; foiled laminates from Walki Wisa, VAW, Lawson Mardon Singen and Sopal. The acquisition of the eight-color Astraflex press by Windmoeller & Hoelscher demonstrates ConFlex’s commitment to efficiency and quality. This state-of-the-art flexo press with Heliostar rotogravure station is opening up opportunities to satisfy any complex package design. The company converts a wide range of substrate, including metallized and white pearl BOPP, PET, PE and 2 & 3-ply laminates using “cold seal” and “hot melt” technology. ConFlex also operates the six-color flexo press “Columbus”, the solventless laminator “Selenia”, both manufactured by Ofem, Italy and slitter rewinders SLA-400 and SLA-600 by TCM, Italy.
Andrei Shchegelsky, 36, is ConFlex’s managing director. A university graduate of law, he has held various positions in law enforcement, from detective to attorney. Then, during Russia’s uneasy transition to a market economy, he became a trial lawyer. While working for ConFlex he quickly progressed as a manager bringing the company out of legal limbo to emerge as a successful business. In his words, “the Russian packaging market has enormous potential with the highest growth rate in the flexible packaging segment. It can be explained by the fact that a wide spectrum of domestic products were sold poorly packaged. We strongly believe that working for Russia’s leading producers of consumer goods will help our company to compete with importers.”
I met Mr. Shchegelsky and ConFlex’s marketing director Nadezhda Panteleeva at the seminar during the show. Ms. Panteleeva was running a well organized presentation that attracted both customers and equipment suppliers. She was also promoting several company advertising initiatives with trade magazines and information services.
In order to meet its customers growing demand for Web-based services, ConFlex operates a website. The site, illustrated with award winning package designs, offers users extensive company and product information. It also provides an on-line purchasing option.
A regional power
The Moscow region was always the center of the former Soviet Union industrial network. Research facilities, midsize and large companies located in a hundred mile radius enjoyed the abundance of a skilled work force and a highly developed infrastructure. After the privatization in Russia, a number of businesses related to the packaging industry emerged in the area.
ZAO FG Packaging based in Podolsk, an industrial town 20 miles south of Moscow, specializes in high quality flexible package converting and printing. This small, private company operates a brand new seven-color rotogravure press, a solventless laminator and a slitter-rewinder from Italian company Schiavi (part of the Bobst Group). FG Packaging produces its own laminates utilizing cast film extrusion equipment from South Korea and running it up to 5-ply polyethylene based composition. The polymer film for the substrate comes from Italy, Singapore and South Korea. With its order portfolio full, the company intends to grow further in production output.
Puma, the company from Pereslavl-Zalessky, introduced its new proprietary product – a modified polyethylene film for pasteurized milk packaging, which extends product shelf life to 10 days. Puma employs 200 and was founded 10 years ago on the premises of a giant Soviet era chemical industrial complex. The company specializes in polyethylene film, but also converts BOPP, paper and foil laminates using a modern flexo press from Bielloni Castello.
Small private converter ZAO FlexoLand (staff of 150) from Moscow produces flexible packaging using a range of high end process equipment from W & H and Schiavi (printing and laminating), and a polyethylene co-extrusion line from Ghioldi and MAM (Italy).
- The St. Petersburg region was widely represented at the show. Its educated workforce, comparable to Moscow’s, has helped emerging companies in the packaging field to fill needed positions in converting/printing and graphic design. Companies based in St. Petersburg enjoy the proximity to Baltic countries, formerly of the Soviet Union, and Finland.
- Polygraphoformlenie makes 400 tons of flexible packaging per month. The customer list includes Nestle, Mars, Pepsi cola, Coca-Cola, Cadbury as well as Russian brands Sladko and Holy Spring. The company operates three flexo presses built by Schiavi, two eight-color 52-in. Sirio and six-color 52-in. Aries, and plans to purchase additional rotogravure and flexo printing presses from Germany this year.
- Variopak, Ltd is a rapidly growing 4 year old company specializing in stretch film production, with sales offices in Yekaterinburg, Nizhniy Novgorod, Yaroslavl and warehouses in Moscow, Krasnodar and Samara. The company employs 110 people, and with four stretch film production lines utilizing the cast extrusion process, plans to make 42,000 tons of stretch film per year. Variopak also produces flexible packaging and printed shrink wrap for the food and beverage industry. “We are planning for a rapid output increase in polyethylene stretch film and polypropylene film. This strategy came after the company’s study on our product’s evolution in the world and local markets”, states Jan Taraponov, general manager. “In the next two years we are planning to be one of the ten largest producers of such film in the world and definitely being the largest in Eastern Europe.”
- When it comes to shrink sleeve packaging, Eximpack offers its expertise for this emerging and costly new field in Russia. The company converts PET and PVC shrink sleeve roll stock and prints it by gravure in up to 8 colors, operating four extrusion lines and two rotogravure presses. Eximpack was founded five years ago as a dealer for Taiwanese made polymer processing and converting equipment, and two years ago started its own manufacturing at the rate of about 400 tons of shrink sleeve per year. The company supplies sleeve applicators and shrink tunnels for a complete range of products from tamper-evident bands to full-body shrink labels.
The fabrication of modern high quality flexible packaging is not limited to major Russian cites. Gotek Group is operating in Zheleznogorsk, Kursk Region, and employs over 2,000 in four independent divisions dedicated to the packaging industry. ZAO Polypak, the flex-pack division of Gotek, was founded in 1992 and had been manufacturing plain PE film for greenhouses and PE no-print bags until 1995. Starting in 1996, the company began to purchase a complete range of process equipment to convert modern flexible packaging, including state-of-the-art imaging systems (Cyrel Digital from DuPont and Barco Graphics), extruders, laminators, printing presses and slitters/rewinders. Polypak’s printing department runs eight-color flexo presses from Schiavi (Sirio), Bielloni (Axioma) and W & H (Soloflex 8L) assuring high quality of the output designs. The company converts metallized, white pearl BOPP, PE, PET shrink film and many more laminates, also utilizing “hot melt” technology.
Gotek invested over $30 million in its packaging divisions in the last three years with the lion share going to Polypak. During this period the company experienced steady 20 to 25% annual growth. A recipient of three World Star awards for its various package designs, Gotek plans to win ISO 9001:2000 certification by 2004.
Aleko Group in Rostov produces a wide range of polypropylene film products for the food and agriculture industry, on the mostly Asian made production lines including extruders, laminators, rewinders and printing presses. Only 10 years old, it has over 600 employees and serves over 500 customers, in addition to offering turnkey installations for polypropylene extrusion lines, which attracts the growing number of local agricultural farms. Production range goes from food wrap to big bags and sacks for farm produce. In 2000, the company gained the ISO 9001:2000 certificate.
- Approximately 280 exhibitors from distant regions as far as Ural and Siberia are involved in the flexible industry as manufacturers, distributors or equipment suppliers. Here’s just a brief sampling from the list of companies.
- Uralplastik (Yekaterinburg) was founded 62 years ago. The company turned to modern flexible packaging in 1998 and quickly became a major supplier for foodstuff, snacks and household brands. Uralplastik converts PP, PET, PE, laminates and foam.
- Danaflex (Kazan –Tatarstan) was founded in 2001. It employs 150 and makes about 160 tons of flexible packaging per month. Danaflex is a full cycle package converter for meat, milk, candy and home products. The company’s equipment list includes Olimpia Primaflex, the 52-in eight-color and Soloflex, the 33-in eight-color CI flexo presses by W & H, the Eco Junior laminator from Schiavi and a slitter/rewinder from Kampf.
- Ukrplastic (Kiev, Ukraine), is a 70 years old company. In 2002 they acquired a 34DF eight-color 57-in CI flexo press with state-of-the-art CNC controlled printing process automation built by Fischer & Krecke of Bielefeld, Germany. The company makes and converts PE and BOPP packaging film for local candy, frozen food and ice cream producers. Ukrplastic’s key personnel have been trained in Germany.
- Metaplast (Toropetz, Tver region) is a joint stock company with over 60 products in polymer packaging, including flex-pack, blister and labels.
- Tiko-Plastic (Dzerjinsk, Nizhniy Novgorod region), operates mostly Asian made equipment, converting PE film into packages and bags. Its industrial base is quite strong and made up of old Soviet chemical factories, still dominating this region about 200 miles east of Moscow. The company recently turned to the converting of laminated and co-extruded film with the printing capacity of two Axioma six-color flexo presses from Bielloni (Italy).
- Amipak (Buda-Koshelevo, Byelorussia), the Holland-Byelorussian joint venture, is one of the most important PET film converters in the CIS with branches in Moscow, Kiev, St. Petersburg, Minsk and Brest. The company specializes in mono and co-extruded barrier PET film for thermoformed and blister food packaging. Amipack was established in 1989, employs over 500 and makes about 400 tons of film per month. The company operates a mono PET film extrusion line from Raifenhauser (Germany) and a PET co-extrusion line from SML (Austria). Additional equipment including PE extrusion lines, laminators, flexo presses and slitter/rewinders comes from Bielloni (Italy) and Barmag (Germany).
- ZIV (Mogilev, Byelorussia) is a sole producer of food grade BOPP film (plain and co-extruded, including white pearl). The company sells it in Russia and the CIS.
- Sealed Air LLC (Moscow) represents the American company Sealed Air Corporation (Saddle Brook, NJ), who is a leading global manufacturer of a wide range of protective, food, and specialty packaging materials and systems. The company booth contained promotional displays for Cryovac®MR polyolefin and OPTI 510 PVC shrink films. Sealed Air LLC also owns a large (over 1000 people) polymer production facility in Volgograg.
Market trends
A universal agreement among the attendees at the show was that the rapid progress in packaging has been achieved by extensive importing of machinery, technologies and materials. Russia alone imported over 500 modern flexographic printing presses in the last three years. At the peak of the cold war, Russia’s heavy industry, oriented mostly towards military and space applications, produced a wide variety of sophisticated equipment, from intercontinental ballistic missiles to its own brands of cars and trucks. After the collapse of the Soviet Union in 1991, the country turned to consumerism. Limited manufacturing capability provided by the conversion of former defense suppliers was not enough to meet the growing market demand for adequate packaging machinery. With labor costs nearly matching Mexico’s, Russia did not become a darling for Western outsourcers except in scientific research, but the high level of imports will likely continue in the near future powered by the abundance of natural raw materials for sale.
I have noticed two companies, one from Moscow and the other from Kiev, Ukraine, that manufacture its own brands of printing presses. Kievpolygraphmash, the Kiev based company, marketed its recently developed FDR-850 six-color 33-in. central impression flexo press. This gear press features doctor metering rolls, ink circulation system, unwind/rewind airshafts and modern controls. However, with a maximum printing speed of 492 fpm and registration of 0.2mm, it is not in the rank of Western competitors. Amazingly, Gramex, the flexo press manufacturer from Moscow, offers its own version of the modern flexo press, the Gramex FP, nearly matching the specifications of world leaders in printing equipment. This press has been designed with 3D solid modeling software, with original parts made locally to the highest manufacturing standards. For commercial components the company uses imports from the best available sources like Lenze drive (Germany), SMC (Japan) pneumatics, SKF (Sweden) bearing and Omron (Japan) controls.
The Rosupak show has long been a proactive leader in working with exhibitors and industry trade associations to raise the status of the packaging business in Russia. Having been neglected in the pre-perestroika era, it has grown up significantly and shows no signs of slowing down.