Category Update

Geopolitical headwinds continue to disrupt the stamping sector, but the category is proving highly resilient in the face of tough challenges – by David Holes Cautiously OPTIMISTIC

For a while, the outlook was promising for global stamping manufacturers as they emerged from pandemic turmoil, with sales bouncing back and commerce returning to some sort of normality. But then the Ukraine crisis hit, delivering a host of fresh complications that required immediate attention.

As Franz Ratzenberger, Managing Director at Austria-based COLOP, explains: “Of course, COVID-19 had a big impact on our business. We supply products to over 130 countries worldwide and sales were hit in every region, sometimes dramatically. That being said, most markets recovered very quickly, with Europe and the US currently back above 2019 levels.

“Everything was looking fine until the Ukraine conflict developed. For Eastern European countries in particular, the stamp is still an important office tool. However, virtually overnight, sales in Ukraine and Russia plummeted to zero.

“Naturally, COLOP is meticulous in observing all the rules around supplying Russia. It’s vital this conflict ends as soon as possible – not just from an economic perspective but, above all, because of the many friends we have in the countries concerned.”

Gerolf Heldmaier, Director of Sales and Marketing at German metal stamp vendor Reiner, tells a similar tale. “The global political situation is very serious,” he warns, “and it’s difficult to assess how we can continue to support all our specialist dealers and whether we can remain active in every region.

“Sales of Reiner hand stamps, often requested by state authorities or for industrial use, have been decreasing for years, with a further 10% fall over the past 12 months. The situation is different for marking devices, where revenues are stable, although the consumption of print cartridges has declined by 5% overall since the start of military action in Ukraine.”

Austrian manufacturer Trodat has a more positive story. According to CEO Roland Rier, the company has recovered well from the challenging times caused by COVID. “We are now seeing growth almost everywhere worldwide,” he says. “China is still a challenging place, however – with the continuing lockdowns and restrictions in the country, it still feels like it’s in ‘pandemic mode’.

“As a company overall, we are almost back to normal although some countries, including Canada, have been slower to bounce back. In many areas, we’ve seen the backlog in demand now causing sales hikes, with further promising opportunities in Mexico, Latin America, India, China and Southeast Asia.”

MACRO PRESSURES

The knock-on effects of geopolitical turmoil are adding severe economic and logistical pressures to an already fragile market. Taiwanese manufacturer Shiny Stamp says the situation has been improving, as people learn to live with coronavirus, but challenges with shipping space and freight rates are still causing problems.

“Unpredictable shipment schedules and staggering transportation costs make production planning much more complicated,” reports Deputy Executive Manager Jimmy Chen, adding: “The unsettled international situation has pushed raw material costs to unprecedented levels and this is having a big impact.

“While we currently have sufficient stock to mitigate the effect, it won’t last for much longer. We’ve also faced exchange rate fluctuations and inflationary pressures which are affecting customer purchasing patterns, making them more conservative in their spending and prolonging buying cycles.”

COLOP’s Ratzenberger admits that while initially the company had struggled to get the necessary raw materials on time, this is no longer a problem. “Having European production facilities has helped here,” he says, although supply chains from Asia are still more complicated than they were.

“Our main concerns now centre on the price of raw materials (mainly plastics), soaring energy prices, sourcing packaging materials and surging manpower costs. Despite having optimised our internal processes, efficiency savings haven’t been enough to fully offset these pressures and, consequently, we have also had to raise our prices.

“We believe we’ve taken a fair approach, with any increases comprehensively explained and plausibly argued. Our business partners face the same situation, understand the issues and negotiate with these in mind. Because our production and delivery times haven’t altered and we announce price rises well in advance, it means we haven’t seen any significant changes in our customers’ behaviour.”

MITIGATING CIRCUMSTANCES

Having always had long-term framework agreements with its raw material and component suppliers has been a huge help, asserts Heldmaier. “We’ve still had delays in some supply side deliveries but, fingers crossed, to date we’ve had no production stoppages and our customers’ orders have been delivered pretty much as normal. However, the escalation in energy costs for electricity and gas is hitting us hard and we’ve had to introduce a temporary price surcharge on deliveries to offset this.”

At US-based Shachihata – owner of the Xstamper brand – National Sales Manager Martin Clemente says that, as a vertically-integrated company, it’s fully in charge of its supply chain and manufacturing processes.

“Consequently, we’ve experienced minimal disruption,” he asserts. “Achieving this level of integration is a long-term process and getting started can be costly. But we’ve seen the benefits and it helps to maintain the highest quality and consistency in our products. We’ve also managed to avoid price increases so far, but are monitoring the situation and will see what the future brings.”

NO HALT TO INNOVATION

Despite the many headwinds, innovation in the category continues, with new products being brought to market all the time.

COLOP is introducing its ‘e-mark go’ in Q4. It’s one of the most compact handheld mobile printers on the market, fits in a pocket and is fully portable. Controlled by an app where users can create their own print designs or choose from one of the various predefined templates, it’s easy to handle, user friendly and competitively priced, according to the vendor.

COLOP will also be bringing products to market and extending its range within its new Arts & Crafts division.

Reiner, meanwhile, has introduced a sensor for its jetStamp 1025 sense industrial marking tool which provides a combined 1D/2D code reader. It means that a single device can now be used to scan both 1D and 2D codes and

Everything was looking fine until the Ukraine conflict developed [...] virtually overnight, sales [in the region] plummeted to zero

The brand new COLOP ‘e-mark go’

print the content directly onto a document or another packaging element.

This product has been particularly well received by companies operating in the repackaging sector, where a scanned barcode, for example, serves as the device instruction and the corresponding print is then immediately available for customers to use.

ENVIRONMENTAL PUSH

With economic and political strife currently taking centre stage across many parts of the world, environmental concerns have not been forgotten. But they are certainly experiencing pushback from some quarters.

“We continue to see strong interest and demand for sustainable and ecologically sound products,” notes Ratzenberger. “However, unfortunately, in times of crisis, environmental issues are not always uppermost in some people’s minds. We try to convince our customers it’s vital this issue is taken seriously and that the entire industry must make a contribution, but there are very big regional differences. Europe is definitely a pioneer, with other regions very much needing to catch up.

“At the beginning of 2022, COLOP took another big environmental step forward, with nearly all the products in our stamp range now being CO2 neutral. Manufacturing emissions from our sites in Austria and the Czech Republic had already been significantly reduced, but those that are unavoidable are offset by investments in gold standard climate protection projects.”

For fellow Austrian manufacturer Trodat, sustainable management is an integral part of the company’s identity. As Rier states: “In addition to initiatives such as including stamps with environmental labels in our portfolio, introducing climate-neutral products and focusing on energy-efficient manufacturing, we’ve now set ourselves the goal of having entirely CO2-free production by 2040.”

Shiny Stamp also sees growing interest in eco-friendly items, according to Chen: “The company includes a growing percentage of environmentally friendly materials in its products, with ongoing research into how this can be improved further. The inclusion of innovative new manufacturing machinery in our production lines has resulted in the addition of rPET (recycled PET plastic) to Shiny’s most popular models.”

In the US, Clemente reports that Shachihata has implemented a complete Eco Action Plan. “We are creating long-lasting products, many made with a minimum of 50% recycled materials. Moreover, worldwide we strive to make our facilities eco-friendly. One of our sites in Japan, for example, now has a wastewater recovery system.”

FUTURE GAZING

Broadly speaking, the stamping industry maintains a cautiously optimistic outlook despite facing tricky market conditions. It continues to invest in the future with companies looking to extend their reach beyond their traditional bailiwicks.

COLOP, for example, sees North America as ripe for exploring new opportunities and will shortly be reorganising its entire market presence there. “It’s too early to give full details,” says Ratzenberger, “but very soon we will have a strong presence in this region, with the COLOP brand well represented across the traditional stamping, digital marking, and arts and crafts sectors.”

Trodat’s takeover in July of Consolidated Marking – a division of Navitor and the second largest distributor of stamp components in the USA and Canada – also highlights its ambitions in this geographic region.

Here’s hoping a return to some kind of normality is on the horizon. As Reiner’s Heldmaier concludes: “Let’s keep our fingers crossed that international business, local activities and personal relationships will soon be possible again without restrictions – in all parts of the world.”

Reiner’s handheld inkjet printer – the jetStamp 1025 sense

Unfortunately, in times of crisis environmental issues are not always uppermost in some people’s minds