Pressure Sensitive Labels
Sluggish European and American markets now on the road to recovery
The pressure sensitive label industry, particularly in Europe and the Americas, has faced significant challenges due to a decline in consumption driven by global inflation and regional armed conflicts. The business environment has been difficult in recent years, especially in FY2023. However, since the second half of FY2024, certain indicators have begun to show signs of recovery, primarily in Europe and the Americas. In Europe, the European Parliament has adopted the Packaging and Packaging Waste Regulation (PPWR), which will partially take effect in 2025. While this regulation will bring substantial changes across the packaging industry, we view it as a valuable opportunity for business expansion. We plan to utilize this by actively committing to the development of new products, strengthening relationships with customers, and collaborating with partner companies for co-creation.
Focusing on profitability improvement and QCD (quality, cost, delivery) enhancement
FY2023 was certainly tough in terms of market trends, but it was also a year in which we launched several initiatives. Amid soaring raw material and fuel costs, we improved profitability by changing materials and production methods with "product change" as our key word, instead of simply revising selling prices. We also focused on reducing unprofitable products and increasing our competitive advantage in QCD (quality, cost, delivery). Our customers involved in essential businesses require us to maintain a stable product supply both usually and in the event of an emergency. In addition, in recent years, there has been a trend among them toward valuing not only the volume of supply and prices but also quality and delivery time. Therefore, to meet customers' expectations of the value we would provide, we worked to improve our value chain while engaging in digital transformation (DX*) ending up with an increase in the quantities of orders we received. Meanwhile, we made a major management decision to withdraw from the ASEAN market, where we had not yet been able to utilize our strengths. The aim of this decision is to concentrate our management resources in Japan, Europe, and the Americas to increase profitability. However, this withdrawal is merely temporary, and we hope to re-enter the market once we judge the business environment as favorable.
*digital transformation (DX): A company's utilization of digital technologies, such as AI and the IoT, to improve business processes and create new products, services, and business models
Creating a workplace where all employees' Waku-Waku (excitement) are linked together
Under FSG.30, our new management plan, we have adopted a business strategy of becoming No. 1 in the specific pressure sensitive label market . To achieve this strategy, we have launched upcyclable and sustainable RecTack while working to expand our business. We will also continue to focus on other environmentally friendly products, for example, by developing linerless labels, which help reduce waste.
The most urgent challenges we must solve are enrichment of human capital and development of the next generation of leaders. Rather than leaving this up to the HR division, it is important for the respective businesses and regions to work together to broaden the opportunity for employees to take up new challenges and feel Waku-Waku (excitement). We aim to create a workplace where all employees can demonstrate their capabilities and their Waku-Waku resonates with each other's Waku-Waku, thereby being linked with each other, through such measures as realizing smart work with lower workloads and higher production efficiency.