End of Year Statement from Highcon CEO Shlomo Nimrodi

With high interest rates, rising energy prices, parts supply issues and global economic uncertainty, 2023 has been a difficult year for many people. As a result, overall demand for packaging has declined.

But for most Highcon customers, it’s been the best year yet on their Highcon systems. For the first time since 2019, Highcon users produced more jobs, month-on-month, than in 2022. As a result, customer volumes are up – averaging 30% year-on-year. 

So, how have Highcon customers been able to meet the global challenges to achieve this performance? Can it continue in 2024, and more generally, what can we expect from the year ahead?

Having talked to customers, it was a combination of the following key trends that drove this success either delivered or supported by Highcon solutions:

·        Slashed inventories, combined with faster delivery and smaller batches. We hear this story repeatedly around the world, and it was told very succinctly by The BoxMaker.

·        SustainabilityReducing carbon emissions, waste, the quantity of material used and much more. Demanded by consumers and brands, sustainability is an absolute imperative in modern business today. Linney in the UK has spoken about this in-depth, describing how they take daily action to support it.

·        Continued SKU proliferation and many more products under development, requiring more packaging development and pilot volumes. In the last 12 months, our customer Virtual Packaging in Texas has seen dramatic acceleration of this trend, and we expect this to continue in 2024.

·        Growing volumes of medium-run production batches suitable for end-to-end digital production, as demonstrated by McGowans Print in Ireland. The combination of digital print with digital die cutting is powerful, and I think we’ll see it accelerate from Drupa 2024.

·        The increasing impact of influencers. Very short run customized premium boxes, targeted at online influencers who film the ‘unboxing’ experience on their channels – videos watched, shared, followed, and liked by millions of people around the world. These high value applications move markets, and digital die cutting is critical to it. Our customers, Linney in the UK and THIMM in Czech Republic, are prime supporters of it.

·        Differentiation to stand out. As highlighted by our customer, Heuchemer Packaging in Germany, unique packaging rather than standard FEFCO boxes – digital die cutting used for greater consumer engagement and increased sales.

·        Web2Pack as a channel for packaging procurement. Smaller brands don’t have the bandwidth or resources to go through traditional procurement channels. As consumers continue to favor local or regional, innovative suppliers, these smaller brands have become more and more important. The web2pack model is enabling these brands to be supported, with increased production volumes year on year. Delga in the UK and Eurographic Group in Poland are great examples of this.

·        The resilience of bricks-and-mortar retail. Consumers still seek the traditional high street retail experience, where retail displays are an essential part of branding and sales promotions. While these displays have become more sophisticated, they’re generally produced in smaller batches and have a shorter campaign life. Undoubtedly, this trend will continue in 2024, driving increased success for our customers, Schumacher in the Netherlands and UDS in Poland.

·        Labor shortages. Despite economic uncertainty, converters are still challenged to hire and retain employees to support the global skills shortage. Designed to be both simple and intuitive, Highcon solutions enable inexperienced operators to quickly learn, ramp-up and deliver great performance. Kamil Masek, Plant Manager at Thimm sees this as another reason why Highcon solutions are so important to their business.

In closing our recent investment round, it was these trends mixed with how Highcon digital die cutting technology is supporting the challenges and driving increased customer performance, that got our investors excited. As a result, we continue to have the funding, vision, expertise and a clear roadmap to support the digital die cutting opportunity.

Lastly, for our industry in 2024, Drupa is a big milestone that can’t be ignored. It provides a huge platform for vendors including ourselves to demonstrate how we solve real problems and create compelling opportunities. Without giving too much away, I can assure you that we’ll be there demonstrating our thought leadership, our technology leadership, and our market leadership. Make sure you have Highcon on your list of companies to visit!

Wishing you all a happy, successful and, most importantly, healthy 2024. 

See you in Dusseldorf.