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As long as the world population is growing
Gallus sees no growth limits for packaging
Mr. Boog is a member of the management team of the Gallus Group with special responsibility for the folding carton business. The group is also active in the label printing and screen printing sectors.
Folding cartons are a relatively new business sector of the Gallus Group. How important is this business unit?
Matthias Boog: Now, folding cartons account for a considerable share of our total sales. It is a business which we will expand further during the coming years. We went into that sector in 2007 because we were looking for another mainstay besides the established label printing and screen printing business units.
Are you afraid that competition will grow because more and more suppliers of printing technology enter the packaging printing market?
Boog: That`s not what we see at the moment. The presently high competitive pressure rather comes from the peak of the process chain: The chain stores urge the brand manufacturers to grant price reductions, the latter pass this pressure on to the printing companies which, in turn, pass it on to the chain of suppliers to which we belong. This whole process is initially triggered by the consumer who wants to have cheaper products.
In the medium term, i.e. in three to four years, I can well imagine that new competitors will enter the market. After all, it takes a machinery manufacturer some time to develop a new product.
What does the future hold for printing and paper?
Boog: The importance for the packaging sector will definitely continue to increase. Packaging is absolutely crucial at the point of sale, not only in terms of marketing, but also with regard to product protection, i.e. the safety of the packaged goods. The consumer decides at the point of sale what he wants to have, and so the packaging tips the balance.
As long as the world population is growing, the market for packaging will grow as well. In many countries of Asia, the middle class with money to spend and with a liking for high-quality packaging is growing. On the other hand, packaging helps, e.g., to protect food. There are studies which claim that there would be no hunger any longer in the world if everything were packed properly.
What is the future of folding cartons like within Gallus?
Boog: We clearly pursue a growth strategy. Till now, we have not been represented all over the total market. Today, our focal areas are in Asia, the Middle East and North America. Europe and, there above all Germany, is still a blank spot on our distribution map. This will change.
Why is Germany not yet a folding carton market for Gallus?
Boog: In Germany, two reservations need to be removed: There, we are, on the one hand, unique with our inline-production – i.e., the integration of different work steps in one machine from prepress to carton roll cutting, from printing to print finishing and die-cutting. Inline-processes like ours are pretty new. In the emerging countries in Asia, our customers are much more open to such innovations than our customers here at home.
The second reservation relates to our printing method. For many, many years, the quality of flexographic printing was considered to be not high enough. In reality, there have been huge innovations in flexographic printing during recent years. The result is a remarkable quality increase. We have now reached the top segments of packaging with this method. I am sure that the penny will drop in Germany as well within one or two years. Then, flexographic printing will be fully accepted for highest demands too.
Gallus cooperates with Heidelberger Druckmaschinen AG as far as marketing is concerned. Gallus started with web-fed flexographic printing, Heidelberg with sheet-fed offset. What and where are the interfaces?
Boog: Gallus has its own marketing channel with a network of representations for every business unit. As far as the cooperation with Heidelberg is concerned, the aim is above all to achieve improved market access for the folding carton business of Gallus. The focus is on joint projects in which Heidelberg uses its machines and we use ours. Heidelberg is a name that opens doors everywhere.
Considering the shrinking resources, sustainability is a topical issue. Is packaging sustainable?
Boog: Whether packaging can be seen as sustainable or not depends on the perspective of the consumer. He is the crucial variable. He takes the product that he wants off the shelf at the point of sale. From the machinery manufacturer`s view, it can only be our aim to make production as sustainable as possible. In this respect, we are performing pretty well with our inline-production of folding cartons. If we execute many production steps one after the other in one machine, we need less space, less transportation within the hall, we produce less waste and need less energy.
Another aspect is recycling. The share of recycled material in the total packaging material is growing more and more. With that, we save virgin fibres. In addition, we offer our customers the option to print with water-soluble printing inks instead of with UV printing inks as well as to dry with hot air. So, we don`t use chemicals any longer. We note that the customers attach more and more importance to resource and energy efficiency.
At a glance:
The establishment of the Swiss Gallus Group goes back to 1923. At that time, Gallus began to manufacture label printing machines. Nowadays, this is one of its three business units. Besides screen printing, the folding carton business which has been in existence since 2007 is the third and youngest mainstay. A 70% share of the company is owned by the founding family Rüesch. In 1999, Heidelberger Druckmaschinen acquired a 30% share. With 580 staff, Gallus achieved sales of 193 million Swiss francs in 2012.
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