Bucking the trend.

While UPM, the Finnish papermaking giant, is closing some of its older European mills and shifting labelstock production to China, it is also continuing construction work on its new labelstock plant near Wroclaw in Poland. With Eastern European label markets growing at 10 to 15 percent every year, it was a toss-up over which of the world's two leading labelstock manufacturers would be first to site a plant in the former communist bloc. UPM Raflatac's Polish plant, due to come on stream by the end of 2008, will cost the tidy sum of $135 million.

Meanwhile, another smaller manufacturer has recently opened a new two meter wide coating line in Germany: Herma GmbH, based in Stuttgart, officially opened its $50 million plant in January 2008. It will more than double the firm's annual production capacity--from 300 to 750 million square meters of adhesive material. Coating speeds on the new line are currently 1200m/m, 50 percent faster than Herma's existing installations. Asked why his company had chosen to invest in Germany rather than in China or another emerging market, CEO Thomas Baumgartner cited the need for a highly qualified workforce and easy access to raw materials. Herma employs 800 people, nearly all of them in Germany, and has sales of $300 million.