Q&A: Fernando Leiro, Artes Gráficas Modernas president

His company, among the very biggest label converters in the region, is a pioneer of Latin America’s promotional label market and has produced its own self-adhesive materials since 1991. President of AGM since 1976, Leiro has led Argentine graphic arts training institution Fundación Gutenberg since 2009 and was its treasurer for the prior 23 years. He has been on the board of graphic arts association Faiga for 30 years, and was its president for two terms from 2004 to 2008. In 2006 he was named ‘Graphic Arts leader of South America’ by the Printing Association of Florida. A board member of Argentina’s Industrial Union since 2002, he also finds the time to act as chairman of Club Atlético San Telmo, the football team from his neighborhood which he grew up supporting.

Labels & Labeling (L&L): 2016 was a difficult year for the Argentine economy. What was impact on your business? In a country with such a history of economic instability, how does AGM maintain consistent growth?

Fernando Leiro (FL): The impact was tenuous. Yes, there was less activity than in the previous year, perhaps a 15 percent reduction in terms of production. But I think consumption in 2015 was rather forced – it was an election year, and there were many promotions to stimulate consumption. Argentina is a country that has periods of crisis every so often, but I think last year it was a political crisis rather than an economic one. We knew that change was coming, and that the new government would devalue the peso, and so people and businesses with savings were able to weather the transition. At AGM, we find ourselves in a solid position, with a strong business and high levels of material stock as a result of importation restrictions under the previous government. Operationally, the effect on our staff was that we didn’t work on Saturday afternoons and Sundays, where previously some departments had worked on those days. But nothing else. Production has stabilized and now is beginning to rise again.

L&L: Do you see market conditions improving in 2017?

FL: I think the market in Argentina will begin to recuperate in 2017. Perhaps not by a huge amount, but investment that is coming in areas such as infrastructure and real estate will help to stimulate activity, and this will be reflected in consumption. It will be a gradual recovery rather than an explosive one.

L&L: What can be done to stimulate growth in the wider Latin American label market?

FL: In Latin America, the key to industry growth is increasing consumption by the people. This doesn’t depend on us label converters, but on governments who can facilitate this type of growth. If people have more money, they buy more products and better brands. Industry growth goes hand in hand with consumption. 

L&L: What is the most important part of effective leadership of a company, and how do you create a good working environment?

FL: The most important thing is to build a strong team. People are fundamental. AGM has a number of staff who have been with the company for many years. People who perhaps are not well known by the wider industry, as I am the more visible face of the company, let’s say, but who have played a key role for a long time. A good working environment is created by everyone – people must buy into what you are trying to achieve. Here, we organize lots of family and social activities for our staff. Children of employees come in during the winter holidays; we organize family days in the countryside twice a year; we give out gifts on Mother’s Day and on birthdays. I think all these little things help to create a positive work environment. I’m proud to say that we never have to go out searching for new employees – we always promote from within. People are trained and move up through the company on their own merit.

L&L: What are your proudest professional achievements?

FL: The trajectory of the company, from a small offset print shop with seven or eight staff 40 years ago to where we are today, is an achievement of which I am very proud. To be named ‘Graphic Arts leader of South America’ by the Printing Association of Florida was a huge honor. For 11 consecutive years, AGM has won the Argentina Export Award in the graphic arts category. The prize is given by the Ministry of Industry and Ministry of Foreign Trade in conjunction with an economics magazine, and in a country such as Argentina – where market conditions are constantly changing – to win for so many years is an impressive achievement. Finally, our move to begin manufacturing our own self-adhesive materials in 1991 was a key moment for the company.

L&L: What was the motivation behind AGM starting to produce its own materials and what have been the benefits?

FL: In Argentina at that time, there were no self-adhesive material suppliers for roll-to-roll printing. I had bought an 8-color Gallus letterpress machine, with rotary die-cutting and hot stamping – the first of its kind in the country – but I couldn’t source the right materials locally. So we got to work and began to manufacture our own materials. It was a step into the unknown. The breakthrough came when we managed to siliconize BOPP: when we told people, they did not believe us. Back then the material was all for use in-house, and later we began to sell and export materials, now around 10-15 percent of our production. So the initial motivation was the lack of local availability. It has brought economic benefits and also allows us to give an immediate response to clients, as we always have stock available.

L&L: After material production began, you also started to manufacture your own applicators. How did this come about?

FL: Sometimes when we sold our self-adhesive labels to clients, they would complain that the label had a problem during the application process. We would go and check and usually it was a simple problem with the settings of the equipment that could be easily solved. Soon I realized that we needed to be responsible for everything – the printing, the adhesive, the applicator – so we closed the circle. First we began servicing the machines, and then building our own. We have sold around 800 in the last 10 or 15 years.

L&L: How was your experience as president of Argentine graphic arts association Faiga and training institution Fundación Gutenberg?

FL: Both organizations play key roles in the industry. It brought me a great deal of satisfaction and personal pride to be chosen by my colleagues to lead Faiga. Not only label converter colleagues, but those in carton printing, flexible packaging and more, and from all around the country. I had two terms of two years each, from 2004 to 2008, and they were calm years: we had very good relationships with the unions. Faiga is a political institution, which requires very different sectors and areas of the industry – and different parts of the country – to come to agreement. I have been president of Fundación Gutenberg for eight years and was treasurer for 23 years prior to that. Fundación Gutenberg has high-level technology, excellent programs and strong support from international suppliers. For example, DuPont, Komori, Siegwerk and Esko all sponsor dedicated classrooms with their equipment. Some 700-800 students pass through every year, and when they leave they have excellent prospects and are ready to work with first-class technology.

L&L: How do you view the arrival of multinational converters in Argentina? Has AGM considered acquiring companies abroad?

FL: Four or five international groups have moved into Argentina in recent years. I see it as a normal part of globalization. With regards AGM, at the moment it is not something we are considering. I think that if one day we were to do it, we would probably build an operation from the ground up in a different market, rather than through an acquisition. The most important thing is people. Duplicating a structure in another country is not easy. The acquisition by a bigger company is not always a guarantee of success.

L&L: What actions have you taken to reduce AGM’s environmental impact?

FL: We have had a sustainability program within the company for many years, which focuses both on social responsibility and environmental sustainability. The social aspects include things such as training and contributing to the local community. On the environmental side, we are eliminating all solvent use from all our processes. We recycle waste material and have a strong policy about working only with FSC-certified suppliers. We work to strict standards and have achieved many certifications. These are often requirements from our clients. We have invested heavily in pre-press over the years to ensure we use technology which does not cause contamination. So it’s a subject which touches upon all areas of the company.

L&L: Traditionally in Latin America many label converters outsource pre-press. Since when has AGM had an in-house pre-press department and what technology do you use?

FL: We have always had in-house pre-press. Even 40 years ago we made our own offset plates, so then when we moved into letterpress and flexo printing, we already had the basics. We’ve never had to rely on external suppliers. We’ve invested a great deal in pre-press over the years – in technology from DuPont and Esko. People usually talk more about investment in printing machines, but these more ‘invisible’ investments are what can really make a difference in terms of efficiency, quality and service.

L&L: How important is the role played by workflow software in connecting departments and ensuring efficient production?

FL: It’s fundamental. We’ve used a workflow system since 2000, and are currently finishing the implementation of a comprehensive MIS. It’s an important investment for the company and a project that has been going on for about a year. The new system will incorporate and upgrade our existing workflow and has been customized to our specific needs. We also use a production planning and control system, developed by a local software company in our factory, which is designed for the specific needs of the graphic arts sector.

L&L: You are chairman of Club Atlético San Telmo. How did you become involved and what has been your experience of running a football club?

FL: I was born in the San Telmo neighborhood of Buenos Aires and lived there until my early twenties. I’ve always been a fan – in Argentina people often support a small team and one of the giants: so my clubs are San Telmo and River Plate. In 1975 we were champions of the second division and promoted to the first. We returned to the second division a year later. Then for a while I was disconnected from the club: I moved to a different neighborhood; my father passed away and my children were born. Around eight years ago the club asked me to get involved. For a while I resisted, but in a moment of weakness I relented. It is much harder to run a football club than a business – it is very difficult to administer passion. A business has coherence, reason. Football is passion. But I enjoy it. The club is in good health. It’s a nice hobby.