1

May 2012

The Man with the Crystal Ball

A NEWSLETTER FOR MEMBERS OF THE TAG AND LABEL MANUFACTURERS INSTITUTE, INC.

Economists love making predictions and businesses exhibit specific behaviors as a result of these predictions: Investing in capital goods during projected up cycles, and tightening the financial reigns in preparation for an anticipated downturn. We even have a way of measuring just how adept economic analysts are at predicting what is in store for tomorrow. The Citigroup Economic Surprise Index is a continuous measurement tool that gauges the gap between economic expectations and reality.

How have our financial gurus been doing? Well, quite poor actually. Over the past three years economic speculation has either been far too optimistic, or far too pessimistic, about the economy nearly all of the time. Economists didn’t foresee the nosedive in 2008, the bounce one year later, or the slowdown in 2011. The graph below shows economic forecast consensus over the last 40 years against what actually occurred:

The Citigroup Economic Surprise Index:

Economist Alan Beaulieu delivered a presentation at the 2012 TLMI Converter Meeting, discussing the state of the current economic roller coaster ride and explained why it isn’t stopping any time soon

I L L U M I N A T O RMay 2012

2

What we really want is an economic Oracle who tells us when to divest of our stock holdings, when to buy and sell real estate and when to invest in our businesses. Realistically, does this economic soothsayer exist? If past performance is any indication, economist Alan Beaulieu and his twin brother Brian come awfully close.

The Beaulieu brothers are principals at the Institute for Trends Research (ITR), the oldest privately held economic consulting firm in the United States. Together they have a 94.7% accuracy rate at predicting what the next year, the next half decade and the next decade hold in terms of recessions, boom years and everything in between. Asked back by popular demand, Alan Beaulieu’s address at the Converter Meeting in March was his second time presenting at a TLMI event.

According to Beaulieu, the economy will be primarily on the upswing until late 2018, with the exception of a mild recession in 2014. He advised meeting attendees, “You need to ask yourself, ‘If I am going to be busier until 2018, what do I need? What are the things that are holding me back? Do I need more salespeople? Is it my plant? My equipment? What is it I am not doing today because I don’t trust the future?’ I’m telling you to trust the future. Make a list of what you need to do, assuming that your business will grow until 2018, and go back and spend the money to cross each item off that list. Trust that you will have the wind in your sails.”

Beaulieu discussed his shorter term predictions stating that currently, the majority of leading economic indicators are positive. He believes that holding US exports under a microscope proves that more jobs will be created, however exports to Europe will experience a downturn as he predicts the European Union will slip into a recession that will be short-lived and mild. He states, “There is so much liquidity in the world, it’s amazing. Businesses have over $2 trillion of excess cash on their balance sheets at this point. This kind of purchasing power buys stability, strength and resilience and means we can withstand some difficulties without having to do massive deleveraging and layoffs.”

Beaulieu explains that one of the core hurdles TLMI converter and supplier members will face when it comes to sustaining growth over the next half decade will be the lack of qualified labor in the United States. In today’s marketplace, people aren’t willing to move to where the jobs are. In an industry where opportunities for employment are arising in geographies like Rochester, Chicago, Pittsburgh, Minneapolis and Cleveland; employers are going to have to become good at convincing people to move to a city they might not have chosen otherwise, and to implement effective training programs once they’re hired.

Alan Beaulieu at the 2012 TLMI Converter Meeting

I L L U M I N A T O RMay 2012

3

When asked what he would do if he were a manufacturing company in today’s market, Beaulieu responded as follows. “Keep your employees happy. Set up quarterly bonus programs that are based upon meeting certain metrics, metrics that make you the most profitable. If selling a certain product is more profitable than selling another product, you establish a metrics goal around that product setting up a bonus pool if your company meets certain sales numbers. This is how you create mutual accountability.”

“Set three to four goals,” Beaulieu continues, “that’s a number people can effectively digest over the course of a year. Make sure you have accountability with one of those goals so they see you as being part of the process. As your employees hit their metrics you know you will be more profitable and you won’t mind sharing that profitability with the people who work for you. Their compensation should improve as much as 10%, keeping them above the standard of living index so everybody wins. Set four new goals each year and tie compensation to an improving company base. Then, when the recession comes and those goals are impossible to hit, at least it doesn’t drain all of your cash and you can then tie the performance metrics to other productivity goals that will still keep you profitable.”

In terms of the stock market, Beaulieu predicts that in 2012 the stock market will go up due to the market increasing more than 80% of the time in presidential election years. On average, markets increase around 9% in election years however Beaulieu’s forecast is for a more modest 6.5%. In late 2013 he predicts the arrival of a bear market that will last through most of 2014. Following on from 2014 the markets will again be in a growth cycle, leveling off in 2017 with a deeper recession on the horizon for 2018.

An additional action item Beaulieu stressed as critical for future success was market research. “Usually we don’t know the reason why we lose a customer,” he explains. “Studies state that 49% of the time we lose a customer due to poor customer service, we just don’t know it. When we ask, they lie to us about it because they don’t want to hurt their sales person’s feelings, or the feelings of their inside customer service contact.”

Beaulieu claims in-depth customer surveying is one of the most important steps we can make in the short term because what companies’ customers wanted in 2007 isn’t what they wanted in 2009; and what they wanted in 2009 they no longer needed in 2011. What they will want next year isn’t the same as what their priorities have been for the past four months. “You are going to have to find out what it is your customers expect so you can match those desires,” he adds. “This is one of the areas you should consider spending money. You think you already have a dialog with your customers, you think you know what they want. Find out for sure. If you are off just a little, you are going to lose customers and they will go to your competition.”

TLMI members can listen to the audio portion of Alan Beaulieu’s presentation in the Members Only section of www.tlmi.com. His slides are also available for viewing.

I L L U M I N A T O RMay 2012

4

Dear Members,If you have not yet had the opportunity to go onto TLMI’s new website I encour-age you to take a moment to have a look at www.tlmi.com. The website con-tains new features including a blog and live news feed sections, in addition to a more detailed and navigable Members Only area. I would like to thank all TLMI staff for their hard work in helping to put together the new site, and as we ex-pand our social media and online presence moving forward we will continue to keep members informed to ensure you are able to benefit from TLMI’s expand-ing offerings in this area.

TLMI young leaders have an exciting opportunity I want to tell you about. This November 28-30 the FINAT Young Managers Club, together with the TLMI YLDO (Young Leaders Development Organization) and other sister associations around the globe, is sponsoring the first ever Global Young Managers Congress for the narrow web industry. The event will take place at the Westin Grand Hotel in Berlin, Germany and will feature presentations delivered by industry leaders that will cover topics such as strategic planning, developing an environmental management policy, and cross cultural collaboration. The link below will take you to the event’s brochure on TLMI’s website:

http://tlmi.com/files/2012/04/YMC-Global-Congress-Programme-22032012.pdf

I want to also make sure all members are aware of the call for entries for the 2012 TLMI En-vironmental Leadership Awards. This prestigious award is announced every fall at the TLMI Annual Meeting and recognizes member companies that have consistently demonstrated a commitment to progressive environmental practices. For more information about the award and to download an entry form, please click on the link below:

http://tlmi.com/about-tlmi/awards/environmental-leadership-award

Please make sure to mark your calendars for two of the industry’s top events coming later in the year. Labelexpo Americas will take place September 11-13 in Chicago. Over 400 exhibi-tors will be featuring their newest technologies, applications and services and I cannot stress enough how important it is to attend this event. I can personally say that the benefit my com-pany receives from my employees attending Labelexpo far outweighs the costs associated with going. It is the only time in our industry when thousands of suppliers and converters are gath-ered in one place in order to learn about technologies and materials that can make us more efficient, and more profitable.

The other major event of this fall is the TLMI Annual Meeting which will be held October 21-24 at the Ritz Carlton in Naples, Florida. The meeting agenda and registration details will be emailed to you in June.

I want to close by thanking all of the TLMI members who recently participated in the TLMI Strategic Planning Surveys. This endeavor is carried out once every three years and remains a central component in assessing how well TLMI is meeting the needs and changing require-ments of our members.

Art YerecicTLMI Chairman

PresidentYerecic Label

I L L U M I N A T O RMay 2012

5

TLMI Chairman, Art Yerecic, and TLMI Chairman Elect, Dave McDowell, recently attended the L9 meeting held the first week of April in Tokyo where leaders from label associations around the globe gathered to discuss industry challenges and opportunities impacting converters worldwide. TLMI Editor Jennifer Dochstader recently spoke with Art, asking him about the meeting and discussing the overall objectives of the L9 and the collective’s priorities moving forward.

TLMI Editor: Art, can you give us a brief overview of the current status of the L9, how decisions are made within the group and which regions are the most active within the collective?

Yerecic: The L9 is currently an informal gathering of the world’s leading label industry trade associations. The organization was originally envisioned by Andrea Vimercati, Past President of FINAT, and the first meeting was held in China in December 2009 at Labelexpo Asia in Shanghai.

On April 3, 2012, the 6th meeting of the L9 took place in Tokyo, Japan and was attended by the leaders of seven associations. Besides the hosting association JFLP, delegations from TLMI (North America), FINAT (Europe), LATMA (Australia), LMAI (India), PEIAC (China) and Ametiq (Mexico) were present at the meeting. Additional L9 members include ABIEA (Brazil) and SALMA (New Zealand).

The group observes parliamentary procedures in our meetings and decisions that are not unanimous are brought to a vote. The chairmanship of the group was held by FINAT for the first two years however the Japan meeting was chaired by Mr. Mitsuo Komiyama, President of JFLP, as the L9 has moved to a rotating chairmanship based on the host location of the meeting. FINAT’s secretariat, Jules Lejeune, graciously serves as the L9 secretary.

Our common areas of concern to date have been building a network for information and knowledge exchange, the administration of the World Label Awards, meeting the challenges of environmental sustainability and developing young leaders.

TLMI is fully committed to the L9 and the Board of Directors is committed to sending two or three delegates to every meeting. We recognize the importance of being part of a collective

TLMI and the Global L9 Collective

Associations around the globe discuss best practices and learn from one another

Delegates of the L9 at the recent meeting in Tokyo

I L L U M I N A T O RMay 2012

6

like the L9 as so many of the challenges and opportunities in our industry are global, affecting converters in every region.

TLMI Editor: As Chairman of TLMI, what do you perceive the L9’s value to be to the association and what can TLMI bring to the L9?

Yerecic: TLMI’s L9 mission is to partner with the leading label associations of the world to improve and grow the industry, and to provide opportunities for TLMI and its members. As the world’s longest established industry association, we naturally have an important role in the L9 meetings. TLMI has developed many best practices which we have gladly shared and our financial benchmarking Ratio Study received quite a bit of interest at the Labelexpo Brussels meeting last September. We were asked to present the Ratio Study in detail and did so in Tokyo.

Prior to the formation of the L9, we found value in discussing best practices with our friends at FINAT. We launched our Young Leaders Development Organization after learning about FINAT’s Young Managers concept. Together with LMAI, we are promoting the concept and importance of training and educating the next generation of leaders to the other L9 associations.

The L9 additionally creates opportunities for TLMI and our member companies to network, learn, and potentially create strategic partnerships with the world’s leading label converters and suppliers.The L9 platform also gives TLMI an even bigger voice to promote our sustainability mission. We have discussed L.I.F.E.® (Label Initiative for the Environment) with the other associations and there is interest from some of them in adopting the program as their own standard.

Together with the other associations, we oversee the World Label Awards and ensure that the judging and participation is fair and equitable to all associations and does not become commercial.

TLMI Editor: Sustainability is currently a primary focus of the group. What types of things were discussed at the meeting relating to sustainability, and do you see it as an issue that is also affecting emerging markets?

Yerecic: Sustainability is a primary focus of the L9. The leadership of the L9 associations is comprised of their converter members and we recognize that as converters we have the opportunity to make a difference. For example as Yerecic Label I can make a difference. However I can make a much bigger difference as TLMI Chairman, and the L9 presents an opportunity to make an even bigger difference because it is an even bigger stage.

This is one of the reasons we asked Avery Dennison and UPM Raflatac to make sustainability presentations at this recent meeting in Tokyo. The presentations were focused on what two of the largest industry suppliers are doing to reinforce their own sustainability priorities and ways

Art Yerecic, Mitsuo Komiyama, JFLP President, and Dave McDowell

I L L U M I N A T O RMay 2012

7

they are impacting the greater industry. The group was quite impressed with the companies’ visions and the scope of their activities.

As label converters however, we’re looking for even more extensive industry vision. We are going to require help from suppliers on key issues like liner recycling and waste matrix disposal and/or conversion. The L9 wants our industry supplier partners to envision an increasing role in helping us meet the requirements of our own customers – brand owners and packaging buyers. As an industry, we want to do the right thing, however we cannot add a lot of cost so we must find solutions that deliver cost savings or are cost neutral when it comes to increasing our own sustainability practices.

One of the ways TLMI is assisting both its converter and supplier members is by making available to membership things like the new L.I.F.E. brochure. This brochure serves as a professional piece of marketing collateral that L.I.F.E. certified companies are using in approaching and discussing sustainability with their customers. It is targeted at the brand owner/packaging buyer and explains L.I.F.E. in a language that is relevant to them, a language that addresses retailer scorecards and transparency in the supply chain.

In terms of how much of a priority sustainability is in emerging markets, I believe it’s a priority in any region where labels are being produced for global brand owners and major retailers. These two groups have a persistent focus on sustainability. In some countries landfill costs are negligible and it is less of a priority. However in other emerging markets this isn’t the case. For example, we learned at the meeting that the disposal of waste matrix isn’t an issue for many converters in India because there are small-scale entrepreneurs who pick up waste matrix directly at the converter’s site and then sell it to be converted into other products.

Sustainability is an area where TLMI continues to both learn and educate, maintaining a leadership position with L.I.F.E. and the research we are constantly undertaking on behalf of our membership. A mission for both TLMI and the L9 is to increase our practical knowledge of exactly what the solutions are in the market currently. For example, who and where are the companies that actively recycle liner materials and either recycle waste matrix or have it turned into energy? What are individual converters currently doing who are active in recycling; what are their internal processes and who are their partners? This is the kind of information that will be made available to the joint memberships of the L9 partners, and in sharing what our respective market’s approaches, challenges and solutions are. It will also serve in benefitting our own association’s members, and the greater narrow web industry as a whole.

L9 delegates at Osaka Castle

I L L U M I N A T O RMay 2012

8

Spurred by the potential for less waste and increased productivity, the label and packaging industry is moving to implement ultra-thin face stock and liners. Converters are pursuing the multiple promises of significant waste reduction, better resistance to moisture and humidity for food and beverage applications and material recyclability. At the same time, brand owners are looking to the combination of new 23 micron/.00092” PET liners with thinner film face materials for label-application technology that enables product differentiation and an enhanced clear film, “no label” or opaque conformable look for high-volume applications.

The transition to 23 micron/.00092” PET liner material – or even thinner (20 micron/.00075”) – is also posing new challenges for die cutting. There is literally no room for error cutting to the ultra-thin PET layer. With the ultra-thin liner materials, pressure sensitive die cutting requires separation of the face stock and adhesive while ensuring that the die does not touch the liner or cause a break during automated label dispensing. New flexible die technology has emerged in direct response to the new challenges of film substrates, with suppliers optimizing performance for 20/23/25 micron PET.

There are now a range of advanced flexible die offerings for extensible film converting. Given the absolute premium in controlling liner strike, industry-leading dies are machined to a tolerance on total plate height of +/- 2.5 microns (.0001”). Advanced manufacturing technology also delivers narrower blade angles, and laser hardening achieves hardness levels of up to 68 HRC for more durable blades, providing long lasting performance in high volume applications.

Along with improved flexible die performance, the exacting requirements of new substrates require greater control of the entire die cutting process to include high precision, high quality magnetic cylinders and die station components. New technology cylinders are manufactured to guaranteed diameter tolerances of +0/- 2.5 microns (.0001”). Total indicator readings (TIR) are also held to this exacting level. Before converting thin film liner material, it is strongly recommended that a converter work with their supplier to inspect magnetic cylinder inventories to assure their overall accuracy.

Along with advanced flexible cutting die technology, machine-finished solid rotary tooling remains an industry option to achieve the tight tolerances on blade edge consistency and total height required for 20/23/25 micron PET.

Beyond the cutting dies, care must be taken to maintain overall die station performance. A strong program of preventive maintenance is necessary as companies address the converting challenges of thin film liners. In particular, a very smooth anvil surface must be maintained. It

Cutting Die Technology for Ultra-Thin Film Liners

Photo courtesy of RotoMetrics

I L L U M I N A T O RMay 2012

9

is recommended that converters work with their die suppliers to audit anvil inventories. At the same time, wear in the die frame slots can mean anvil and dies are not being held firmly, which can lead to an inconsistent die strike. Similarly, bearers on support rolls and magnetic cylinders or solid dies should be inspected for wear that could affect liner impression.

Die station component accuracy must be validated as well, given the greater requirement to manage heat buildup. When the web is hot leaving the print stations, it will bring this heat to the cutting anvil causing thermal growth. A rise in anvil temperature by as little as 20 degrees F can lead to die cutting problems. If bearers are not in good condition and well lubricated, they too can generate excess heat and thermal expansion. Solutions for cooling the web prior to the die station are recommended.

The challenges of handling liners thinner than 20 micron/.00075” PET are leading to innovative die station solutions. New technology is being demonstrated today to avoid direct strike to the liner altogether by a process of delaminating and relaminating the substrate layers and the use of chilled dies.

Waste/matrix removal is another area of attention in converting with ultra-thin liners. The nature of the light die strike on a thin film means there will be areas that are in tolerance but light enough that converters need to help the waste removal process. As with a number of challenging materials being converted today, companies may have to employ the same stripping/ waste removal “fixes” currently used at high speeds. Testing for customers has clearly demonstrated the need to help the stripping process as speeds increase to 1000 ft/min.

Another key process at the converter level is testing for liner strike control on press. The margin between acceptable or unacceptable die strike is 2.5 microns/.0001” out of die tolerance. High-volume, automatically applied labels require a lighter impression with no room for error. A converter should perform liner strike testing at the beginning of each run and at the end of each master roll to assure consistent quality. Some converters test every new roll of material as it moves on-press and with the rapid growth of thin polyester liners, multiple options for testing have been developed to test die strike impact for high-speed dispensing.

In many cases, and given the rapid introduction of new materials, the liner strike tests have been developed by converters themselves. Current options include stretching the material, using a “snap test” or applying pressure to the die cut areas to determine the integrity of the liner. It is critically important that the converter and the customer approve targeted liner strike

Photo courtesy of RotoMetrics

I L L U M I N A T O RMay 2012

10

prior to job launch. Visual inspection remains important, and surface inspection lights (such as LandSco®) are recommended for confirming acceptable liner impression.

In conclusion, the growing acceptance of ultra-thin film liner material poses a range of challenges for converters and their partners for rotary tooling. Both solid and flexible die cutting solutions are available today to meet the exacting demands for optimum liner strike control and it is more important than ever that companies partner closely with their die suppliers to help maintain performance of the entire die cutting system.

Authored by: Steve Lee, Vice President of Technology and Brent Fischmann, Director of Marketing & Corporate Development

RotoMetrics, headquartered in St. Louis, Missouri, is a worldwide leader in precision rotary tooling for the printing and converting industries. The company supports customers from operations in 8 countries with major manufacturing facilities in the United States, United Kingdom, Australia and Thailand.

TLMI Commissions 2013 North American Label StudyTLMI has recently commissioned industry research firm LPC, Inc. to research and publish the association’s prestigious North American Label Study (NALS) to be published in early January 2013.

This extensive study, published by the association every four to five years, is a comprehensive resource for TLMI converter and supplier members, and for the greater narrow web labeling and packaging industry. The NALS 2013 will closely examine those drivers shaping the North American, Central and South American narrow web marketplace and will provide benchmark-level researched market data and trend information to assist companies in making business decisions critical to their growth and profitability.

Frank Sablone, TLMI President, comments, “The North American Label Study is one of the most important benefits our members receive. The study provides peer-level data that converters and suppliers can use for their own benchmarking purposes in addition to trend predictions, growth forecasts, end-use sector analysis and case studies. This is the only research endeavor of its kind in the narrow web marketplace, and since a portion of companies surveyed include TLMI members, quantitative and qualitative participation rates for the NALS are the highest in the industry.”

Present and future demand for narrow web applications will be researched for all narrow web technologies including pressure sensitive, wet glue, sleeves of all types, and in-mold. Current and emerging opportunities for brand owners and converters in the digital printing space will be reported on, including an examination of the current demand for digitally printed prime labels, and growth forecasts to 2017. Major end-use markets will be examined in-depth and the study will report on drivers and change agents in each sector through quantitative analysis and interviews with packaging buyers/sourcing personnel, packaging engineers, brand managers, CPG (consumer packaged goods) marketing and business development personnel, and narrow web printers and converters.

LPC, Inc. provides market research and consulting services to companies in the printing and packaging industries, working with clients at every level of the supply chain: Fortune 500 consumer packaged goods companies, printers and converters, and equipment and consumables goods suppliers. Publication of the TLMI North American Label Study will be in January 2013.

I L L U M I N A T O RMay 2012

11

Over the past half-decade Latin America has managed to remain relatively unscathed from the global credit crisis and economic downturn. Hard lessons were learned during the on-and-off cycle of economic crises rampant in the region throughout the 1990s and into the new millennium, placing Latin America in a better position to weather the storm in the most recent global recession. The steady rise in commodity prices and China’s insatiable hunger for natural resources have expanded the region’s middle classes and the market’s shining star, Brazil, has become one of the globe’s economic powerhouses.

TLMI Editor Jennifer Dochstader recently spoke to David Taylor, General Manager of EFI's Radius (Enterprise Software for Packaging) Division, about his company's Latin American growth strategies and how EFI’s recent acquisition of Metrics Sistemas supports his company’s longer term goals in an increasingly globalized marketplace.

TLMI Editor: What precipitated EFI's decision to make an acquisition in the Latin American region?

Taylor: The EFI software division, what we are now calling the EFI Productivity Software Group, has significant growth ambitions which are being satisfied both organically and through acquisition. We are now delivering against these ambitions, have seen double digit organic growth and have successfully integrated MIS (Management Information System) companies including Pace and Radius. We are now the dominant provider in North America and the largest MIS/ERP (Enterprise Resource Planning) provider to the printing and packaging industries in South America, Europe, Australia/New Zealand and South Africa with over 20,000 installations worldwide.We have a global ambition to be the worldwide leader in the MIS and ERP space for both the print and packaging markets. With these two acquisitions under our belt, in 2011 we added two more ERP providers: Prism (out of New Zealand) and Printstream (US) and in 2012 we added the leading German Print MIS provider Alphagraph.

We recognized that there was a great deal of opportunity in Latin America and that the purchase of Metrics Sistemas would assist us in our goal to broaden our global footprint and penetrate a market where we have had a more limited presence in the past. Via the Metrics Sistemas purchase we acquired 80 very competent and experienced people who have been selling and implementing MIS applications throughout Latin America for many years, which is an important consideration for ongoing success.

TLMI Editor: How much experience does Metrics Sistemas have specifically in the Latin American narrow web industry and do you view narrow web as an opportunity market in this region?

Taylor: Metrics has a number of customers in the flexo label market and actually what they have not had is a truly viable solution for these customers in terms of something that is designed specifically for the narrow web industry. There are two types of software solutions out there, those that are typically designed for generic manufacturing and those focused on the printing and packaging market. EFI Productivity Software solutions are specific to the industry that they serve and the Radius solution is dedicated to the packaging (including labels) space. There are significant differences between generic providers and those that are focused on the industry that they serve. We feel that when converters truly understand the

TLMI Supplier member EFI acquires Brazil-based Metrics Sistemasde Informação, expanding the company’s presence across Latin America

A Global Ambition

David Taylor

I L L U M I N A T O RMay 2012

12

opportunities for production efficiencies, then they are able to compete effectively; particularly exciting news for Radius customers. There is a high volume of label converters in this region and the opportunity for us to go into this market and offer a solution that is directly relevant to label printers is immense.

We will build upon the knowledge and experience we have with Radius in other regions and will be able to take Radius’ advantages to the prospects Metrics has and help them convert to the Radius platform. We have been doing that in North America for some time and the customers have been very pleased with the results.

TLMI Editor: What do you feel are the production and/or business elements that are unique to the Latin American market?

Taylor: These are competitive markets. The more information these converters have about the transactions in the system and how they are processing, the more they will be able to take a very close look at their business in a way they have never done before. The more they are able to analyze and look at where they are making money and where they are losing it will allow them to run their businesses in a more proactive and profitable way.

One of the things I struggle with on a daily basis is to try and explain to a converter who is about to spend half a million dollars on a new press; is that it is very wise to spend a much lower amount of money on software because the value the software brings a converter pays for itself many times over. I'm not talking about a nebulous and esoteric piece of software, I'm talking about something that can revolutionize the way a converter does business, especially in Latin America where labor costs are relatively low yet raw material costs are high. It is critical that today's narrow web converter is able to break down exactly what their costs are per job, per application, and that is something that is the foundation for Radius.

TLMI Editor: Suppliers in our industry are watching Latin America very closely and some companies are considering a future acquisition in the region to expand their presence and to gain a foothold in these expanding markets. What would your advice be for other suppliers?

Taylor: It is a challenging process. A company needs to understand the culture and needs to be embedded at the local level and have local resources if you want to be successful. That is the reason we decided to acquire a company that already has some type of solution for this space. The fastest way for us to realize our strategic goals globally was to go and acquire someone who has the experience, dedication and the intimate understanding of the culture. This is something a company needs to prioritize when considering making an acquisition.

I also want to say that we are in this for the long run. Many people aren't aware that converters typically spend 10-15 years in a relationship with their MIS supplier; that is the industry norm in terms of how long companies partner with someone. If you think about that, it is a very long term investment and if the MIS company you are partnering with doesn't have the financial resilience to stand the test of time in the market, it's very expensive to switch platforms. Converters need to make sure they are partnered with a company that has a secure footing in the marketplace and this is true for every global region.

Screen capture courtesy of EFI

Screen capture courtesy of EFI

I L L U M I N A T O RMay 2012

13

OFFICERS

Kathy Alaimo

(2010-2013)PresidentSyracuse Label & Surround Printing

Joel Carmany

(2010-2013)PresidentConsolidated Label Company

Michael Dowling

(2009-2012)PresidentCL&D Graphics, Inc.

Michelle Garza

(2011-2014)Vice PresidentRBCOR, LLC

Daryl Hanzal

(2010-2012)PresidentRitrama, Inc.

Doug Kopp

(2011-2014)ChairmanKopco Graphics, Inc.

Craig Moreland

(2010-2013)PresidentCoast Label Company

Dan Muenzer

(2011-2014)Vice President Global MarketingSpear, Inc.

Michael Ritter

(2011-2014) Vice PresidentSuperior Business Asscoaites

David Taylor

(2010-2013)General ManagerEFI Radius

Dwane Wall

(2009-2012)PresidentCreative Labels of Vermont, Inc.

Geri Wise

(2009-2012)Vice President SalesCentury Label, Inc.

DIRECTORS

CHAIRMAN

Art Yerecic

PresidentYerecic Label

CHAIRMAN-ELECT

Dave McDowell

CEOMcDowell Label & Screen Printing

VICE CHAIRMAN

Jeff Dunphy

CEODesign Label Manufacturing Inc.

PAST CHAIRMAN

Frank Gerace

Former President/CEOMulti-Color Corporation

Tony Macleod

Legal Counsel