China cigarette pack printing industry is struggling


As we all know, Chinese tobacco manufacturers prefer luxury and advanced cigarette packaging, so they have to pay a higher price for it.

According to data released by the Chinese government on tobacco production capacity, cost and profitability, in January of this year, Chinese tobacco manufacturers spent 567.04 yuan ($82) per 10,000 cigarettes, of which 119.37 yuan or 21% were spent. The cost is spent on packaging. In fact, the high packaging costs not only impose a heavy burden on tobacco manufacturers, but also bring investment difficulties to the printing and packaging companies providing services.

The fierce competition between tobacco manufacturers and the competition of printing companies for the cigarette package market have made China's tobacco packaging quality significantly improved in recent years. According to incomplete statistics, there are currently more than 200 printing companies in China that use cigarette packets printing as their core business. Most of them have gravure printing lines. In Yunnan, the province of tobacco production in southwest China alone, there are more than 50 gravure printing lines of six colors to eight colors.

As a result, the competition between cigarette pack printing companies will become increasingly fierce, which will also make the cigarette pack design and printing technology more complex and ultimately affect their choice of materials used. All in all, cigarette pack printing companies will use more and more advanced equipment and will invest more in the purchase and maintenance of cigarette pack printing equipment.

heavy pressure

In fact, China's cigarette packet printing industry has formed a fixed development model. Each year they reinvest their operating profits, whether in the form of fixed assets or other forms. It now appears that investing in equipment is simply a bottomless pit, and companies need to adopt new technologies and equipment every year to update them.

In recent years, many cigarette pack manufacturers in China have integrated their own printing factories through cooperation, joint ventures, and joint stocks so that they can achieve self-sufficiency in cigarette pack printing, but even so, these printers still have to Sustain heavy pressure to continually invest in equipment. At the same time, independent printing companies are also observing the market, studying their relationship with investors, and trying to find opportunities to expand their sphere of influence.

The reason why printing companies incorporated into tobacco manufacturing companies are eager to upgrade their technologies and equipment is to prevent external printers from invading their own sites. With the increase of such disorderly competition, the investment of enterprises in equipment will be further increased.

As mentioned above, there are currently more than 50 six-color to eight-color gravure printing lines in Yunnan Province, and according to Yunnan Zhongyan Industrial’s corporate development plan, by 2012, Yunnan’s annual average cigarette production and sales will be Reached 17.5 billion packs. Therefore, the printing demand for cigarette packs in Yunnan Province is only 17.5 billion packs, which will only be satisfied if 30 production lines for printing are satisfied. However, local cigarette pack printing companies did not appear to have slowed their investment in such equipment.

Because the end-users always have high requirements for new technology applications and printing quality, the printing factory must at least print one more water-based luminescent ink on the existing four colors of cigarette packets. And the post-press processing technology of this kind of product is becoming more and more complicated. For example, tobacco manufacturers need cutting saws, embossing, special die cutting, thermal printing, cold stamping, uv printing, and other technologies. Because of the difficulty of meeting these requirements with their existing printing equipment, new equipment must be purchased.

Today, many products have to print 7 or more colors. The equipment that can do this is expensive. New cigarette packs are generally priced at more than RMB 20 million, and most of these equipments rely on imports, which will result in high tariffs.

Advanced configuration requirements, high equipment costs, relatively high tariffs and value-added taxes make printing companies strongly feel the sharp rise in equipment procurement costs.

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