monta Explains the Current Market Situation for Adhesive Tapes

Another year has passed – faster and more exciting than we could have anticipated. A lot has happened in the market of adhesive tapes. The adjustment in the number of producers of self-adhesive tapes, already drawing attention by the end of 2009, continued with one manufacturer closing its doors and another halting production because of cash flow. Others who suffered from a tight liquidity position were unable to purchase sufficient raw materials, leading to a reduction in production capacity. Finally, fluctuating economic situations in some European countries proved to be a challenge for other manufacturers.

Market demand could not be met by the remaining manufacturers without extended lead times which led to a supply shortfall for customers in the spring/summer.

At monta, we met the market situation proactively and increased our production capacities through an expanded work schedule. Changing from a five-day to a six-day cycle at the beginning of 2011 certainly helped; however, the lead times were not reduced significantly and we continued to experience a growing back-log. In response, we set the course for a seven-day production run, overcoming several bureaucratic obstacles to accomplish it. As of early October we now produce continuously seven days a week and are thus decreasing back logs and lead times little by little.

Generally speaking the current situation seems comfortable, if not for rising raw material and energy costs as well as pressure from the market regarding pricing policy. With these developments in mind, there are new questions on which to focus: can the market absorb higher prices caused by increased production costs? How does the market react concerning the shift between PVC and OPP prices? Does the risk of product substitution arise? What solutions and economically sensible alternatives exist and what will the new strategy entail? How will we be affected if another producer of natural rubber self-adhesive tapes disappears?

The answers to such questions are not immediately evident, but result from discussion and analysis with limited speculation. As we enter the New Year, monta remains flexible to changes in market conditions. With your trust and support we will make our best effort to be a powerful and fair partner for you in 2012.

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