Converting has always been a pretty capital-intensive business, and the latest wave of innovations in equipment has ramped up the need for expensive upgrades rather dramatically. Thirty years ago, a 20-minute setup with 5,000 pieces per hour of throughput and pretty good print registration was state of the art. Now, state of the art is two-minute setups with 25,000 pieces per hour and very high-quality printing. Corrugators are faster, wider, and allow for the change of rolls at very high speeds. Specialty equipment to make retail-ready packaging and other point-of-sale and point-of-purchase packaging being demanded by retailers is now becoming more and more common. Digital printing technologies are still evolving rapidly, but are now running at such high speeds with absolutely beautiful printing that many are predicting they will soon be in line with corrugators and finishing equipment. Flexography may be on the way out as the preferred way that converters print and may be giving the lithographers a run for their money as well, at the very high end of printing.
Retooling an entire plant with state-of-the-art equipment could cost between and $10 million and $50 million, depending on the size of the plant and the diversity of the converting being done. All of this has of course been part of the reason for consolidation of converting operations. We just don’t need as many plants as we used to, since each plant can now produce many times what they could produce 25 years ago. But can this kind of investment be justified? Can a converter not begin to make these kinds of investments and stay competitive?