Instability in the packaging and label market

“May you live in interesting times.” This old Chinese curse has truly manifested in recent years, turning our personal and professional lives into a period of exceptional stress and uncertainty.

Challenges of the modern pharmaceutical industry

“May you live in interesting times.” This old Chinese curse has truly manifested in recent years, turning our personal and professional lives into a period of exceptional stress and uncertainty. Many of you have already noticed extended lead times when placing new orders. This problem affects numerous branches of global industry, and unfortunately, it has also directly impacted our sector.

At Prespack, we comprehensively provide professional services for pharmaceuticals. One of the steps involves the repacking and kitting of medical devices or labeling. Issues with the availability of raw materials lead to longer processing times as we must wait for the components necessary to complete the entire order.

The beginning of the pandemic and a new reality

The year 2020 began with an extraordinary and unprecedented situation. The SARS-CoV-2 virus appeared globally, introducing massive uncertainty into our lives. At first, the unknown threat generated widespread fear. As negative reports rolled in, we isolated ourselves to protect our lives and health.

Everyone realized that the pandemic would not leave the global economic situation indifferent. Imposed restrictions, a rising number of cases, and hospitalizations signaled the collapse of certain industries. We had to learn a different system of work. However, this “new normal,” which initially posed a huge challenge, gradually became a part of our company’s daily functioning.

The pandemic and industry operations

The passing months of the pandemic taught us how to function in a new way. We firmly believe that we handled many challenges exemplary and emerged from this period unscathed on balance. Unfortunately, 2021 brought further difficult trials. The collapse of the supply chain, accompanied by a drastic increase in the prices of raw materials and services, was particularly palpable. We all secretly hoped this would be merely a transitional phase and that the situation would stabilize after a few months.

Rising costs and raw material availability issues

However, that did not happen. We observe a continuous increase in raw material prices—including paper, varnishes, and ink for serialization machines—as well as rising labor, transport, energy, and waste processing costs. We constantly make every effort to minimize the negative effects of this situation that could affect our clients. For us, this is a time of increased mobilization and even closer cooperation with partners and suppliers.

Crisis in the label material market

We won’t hide the fact that we initially treated subsequent price hikes with a certain degree of trust, counting on a swift return to normalcy. However, the beginning of 2022 brought further negative events.

In January, a general strike began at UPM factories in Finland—one of the largest suppliers of label materials in Europe. The situation quickly affected other producers of self-adhesive materials, causing instability in the paper, PP, and PE film markets. Delivery delays began reaching up to 10–12 weeks, often without guarantees of timely execution.

The War in Ukraine and the “snowball” effect

In February 2022, the armed invasion of Ukraine by Russia began, triggering further economic repercussions. Combined with earlier issues regarding rising prices and limited material availability, this led to the so-called “snowball effect.” Global events began directly impacting enterprise operations, lead times, and industrial market stability.

Cooperation and planning as the key to stability

We are doing everything in our power to ensure our clients feel the effects of market turbulence as little as possible. Therefore, we kindly ask you to account for extended lead times and place orders well in advance, which will allow us to prepare the necessary components to provide our services.

The services provided by Prespack are highly specialized, which is why we know how important reliable cooperation and mutual understanding are. We believe that together we will survive this demanding time and look forward with hope to the stabilization of the market situation..