The Mexican converter has opened a site in Texas amid ambitious plans for growth in theUS market.
Label converters in Mexico are increasingly targeting the enormous and lucrative consumer market to the countryʼs north, but few can be doing so with the foresight and ambition of AGH Labels.
The company, which earlier this year received investment from Latin American packaging conglomerate Sigma Q, has opened a sales and distribution facility in Laredo, a suburb of Dallas, Texas, and appointed a team of experienced industry experts–including former TLMI president DanMuenzer– to spearhead the initiative. Furthermore, it is focusing initially on offset-printed cut and stack labels, a product the company believes is under-represented in the US market.
Headquartered in León,Guanajuato, and with an additional facility in Tlalnepantla, Estado de México, AGH Labels specializes in cut and stack and roll-fed label production, with an emphasis on HD printing, UV graphic enhancements and metalized finishes.
With more than 425 employees, it also produces roll-to-roll, shrink sleeves and pressure-sensitive labels, and can call on a printing technology portfolio that includes flexo, offset and gravure.
AGH Labels produces more than 14billion labels a year, 95 percent of which is for the food and beverage sector, and estimates that it holds two-thirds of the Mexican cut and stack label market. It is the number one label supplier to Nestlé in Mexico.
The project is already bearing dividends, with 15percent of production now exported to the US and large accounts in place, including beer and soft drink producerSouthwest Beverage and bottled water giant Niagara Bottling Group. ʻThis strategic move will enhance our operational capabilities and allow us to better serve our clients across the region,ʼ saysRogelio Barba, AGH Labelsʼ business development director for North America, a 22-year veteran of the company who has relocated to Dallas to run the operation. ʻOur aim is to be the most respected and trusted supplierin the United States.ʼ
Production
In Mexico, AGH Labelsʼ production is split between two plants: the site in Tlalnepantla, Estado de México, is dedicated to flexo and gravure printing.
It houses two gravure presses from French manufacturer DCM and one from India-based Kohli, while flexo printing – for applications such as water bottles, soft drinks, home care and personalcare labels–is handled by two Nilpeter presses and two from Comexi.
The relationship with Comexiis growing.A third pressis already on order and will be installed later this year, while AGH Labels plans to install further machines from the press manufacturer at a new plant next year. ʻGravure is very good for long runs but less suitable for shorter runs, which is why we have been adding more flexo capacity with Comexi,ʼ explains Barba, who has spent time in various leadership roles at AGH Labels, including running its operations, sales and finance departments.
Theprojectis already bearing dividends, with 15 percent of production now exported to the USandlarge accounts in place
AGH Labelsʼ plant in León, Guanajuato, is dedicated to offset printing, with four Heidelberg presses working alongside one from Mitsubishi. According to Barba, the Heidelberg presses handle most of the value-added work – jobs with different varnishes
and finishes.
AGH Label ssources materials from a wide range of international suppliers, including Brigl & Bergmeister, CosmoFilms, Innovia Films, Lecta, Nissha, Pixelle, Sappi and Taghleef.
ʻWe focusonveryfast productionandturnaround,ʼsaysBarba. ʻWe offer face lifts to labels through embellishment. When printing on metalized paper, a non-absorbentmaterial, most companies do twopasses–layingabasecolorfirst andthenprintingagain.We can do that in one pass.ʼ
The company has been certified to ISO 9001:20000 and awarded an EcoVadisSilver rating, among other certifications, something which Barba describes asan ʻadvantageʼ for prospective clients.
Accordingto Barba, AGH Labels aims to double production capacity and revenue every three to five years and is currently achieving double-digitannual growth. Further expansionis already planned. AGH Labels aims to open a third plant in 2025, dedicated to producing labels for export to theUS, and equipped with wide web flexo presses from Comexi.
A partnershipagreedearlier this year with Sigma Q is a further boost to the companyʼs growth plans. Sigma Q was founded in El Salvador in1969, and has since grown into a multinational group of packaging companies covering corrugated, folding carton, flexible packaging, plastic containers, displays, design and pre-press, and a paper mill. Most of its 12 production sites are in El Salvador, Guatemala and Honduras, but there is a flexible packaging plant.
in Toluca, Mexico, which can provide AGH Labels with additional capacity. It also runs eight sales, sourcing and distribution offices in the Americas and Asia. ʻIt is a strategic advantage for AGH Labels to have the backing of Sigma Q,ʼ says Barba. ʻThis collaboration marks a significant milestone for the company. We are at the early stages of our relationship, but this will be rampedup significantly inthenearfuture.ʼ
United States
The new US-based team includes director of client solutions Chad Brewer, who brings more than 25 years of experience in the printing equipment industry, having spent a significant portion of his career at Konica Minolta and who most recently worked for a start-up label sales company in KansasCity.
Doug Hesche, whose experience includes a variety of roles at Spear, Konica Minolta and Avery Dennison, is providing input into AGH Labelsʼ sales strategy.
Dan Muenzer, who brings more than 25 years of experience in senior leadership roles within the label industry, joined in June as director of market intelligence for the US operation.
ʻOur US team is growing,ʼsays Barba. ʻIn a market with such volume, you need to keep expanding.We know that the United States is a different market. We needed someoneto help teach ushow to deal with customersin the US. We are gaininga lot of knowledge from Dan.ʼ
Previously VP of marketing for Spear and Constantia Flexiblesʼ label division anda former president of the US association TLMI, Muenzerhad spent the last three years semi-retiredand coaching cross-country and track at St Xavier High School in Cincinnati.
He left the sector in 2020 following his stint as TLMI president but stayed engaged and in contact with former colleagues. ʻLate last year, I had begunto think it was maybe time to look for a new opportunity,ʼ recallsMuenzer.ʻAGH Labels knew it was moving into the US market, and the opportunity arose to help them with strategy and networking and branding.We had an initial talk and I was blown away – I was so impressedwith the people; I felt the energy hit and the light bulb go off.
What appealed to me most was that they werenʼt asking me to help move into pressure-sensitive labels, but rather focus on cut and stack. I had never been exposed to that side of the industry, and it was an advantage that I wouldnʼt be taking business away from my industry friends, who are all involved in pressure-sensitive. We are going after existing cut and stack business, not trying to convince brands usingPS labels to move to our technology.
ʻAGH has continued to invest in a technology in which the US has stopped investing. They believe in a technology that the US market has set to the side. This excited me. I thought, I love these guys, they are young and enthusiastic, this could be a lot of fun. So it was a match madein heaven. I couldnʼt passupthe opportunity.ʼ
Muenzer believes there is a trend toward brand owners returning to paper labels from filmic, which gives a strategic advantage to AGH Labelsʼ cut and stack expertise.
ʻPressure-sensitive labels used to be growing at 5-6percent a year, while cut andstack was flatlining,ʼ he says.ʻBut cut and stack is now growingagain and in the last three years PS labels have declined.
ʻI understand the US market, so Iʼm helpingto position the companyin a way that makessensein the US, identify what customers make sense, what kinds of systems and organization do we need to have in place to serve them, andhow to communicate what we are doingin the market.
ʻI am a huge believer in the power of the network – not only do you need to talk to your potential customers, but also material manufacturers, press manufacturers, and your fellow converters.ʼ
With thisphilosophyinmind,AGH LabelshasjoinedTLMIas
a converter memberand wants to explore potential partnerships with US converters who donʼt offer cut and stack technology. ʻThe concept is there, and we are having discussions,ʼ says Muenzer.
The company recently won a Best in Class prize for its De La Viuda hot saucelabel in the FoodIndustry category at the TLMI Printing Excellence Awards.ʻWe are very proudof this achievement at our first attempt,ʼ says Muenzer.
Tuna success
One target marketfor AGH Labelsʼ cut & stack technology in the US is canned tuna. In Mexico, the company ʻhas earned the lionʼs share of the industryʼs label supply,ʼ according to Rogelio Barba. ʻFew applications are as demanding as tuna labels.
The industry frequently uses metallic substrates, which present
a unique set of printing and label performance challenges. However, the real difficulty lies in cutting precision and high-speed application of labels that are very short in height but extremely long in length.
ʻAGH is Mexicoʼs largest supplier of paper metallic labels and has perfected the art of printing these labels in a single pass, regardless of the print processor varnish effects.
This capability allows AGH to achieve optimal graphic registration and minimize production handling marks.AGHʼs industry- leading cutting registration ensures near-perfect label sizing, which enhances the handling and application of these uniquely challenging labels.ʼ
Articule by Labels & Labeling