Automated Vision Systems in Packaging Industry

 

In today’s globalized marketplace, automation plays a critical role in maintaining quality in emerging markets while allowing developed countries to manage rising labor costs. Originally, packaging machines were built to automate specific packaging tasks. However, for a long time, these machines couldn’t operate with complete autonomy. Humans still had to perform various inspection and verification tasks. Although these jobs weren’t dangerous or physically demanding, they took a specific toll on workers. The state of hyper-vigilance required for these tasks led to psychological fatigue. Studies have shown that subjects performing vigilance tasks exhibit elevated levels of epinephrine and norepinephrine, consistent with high-stress levels and indicative of a significant mental workload. Just imagine standing next to the packaging line and monitoring hundreds of products passing by in search of a defect. Even though most of the products are just fine, the worker needs to stay alert in order not to miss a flawed product. That is why vigilance tasks are considered to be stressful andtaxing mental work.

Luckily, automated vision systems changed everything.

 

Types of Automation Vision Systems

 

Automated vision systems, also known as machine vision systems, provide image-based inspection for a variety of industrial and manufacturing applications. Now, machines and robots can “see”!

There are more applications for vision systems than ever before. The type of vision system most appropriate for a particular application depends on several factors: what you’re trying to inspect, the specific properties of your process or products, the speed of inspection, and the budget.

2D and 3D cameras are now commonly used for automated inspection, robot guidance, quality control, product sorting, and much more. A smart camera that has been calibrated to perform specific inspections automatically examines products as they flow down or adjusts a process in real-time.

Here, at Tishma Technologies and Nortech Packaging, the use of machine vision systems has become a standard. We utilize high-quality vision systems from our trusted partners Cognex and Keyence, for a variety of applications, and in the following lines, we will describe the most common ones.

 

Inspection: detecting carton open flaps, dents and other irregularities

Defect inspection systems can catch and resolve product, packaging, or surface defects in real-time. These are just some of the examples:

  • Dent inspection
  • Label placement verification
  • Broken seals
  • Surface deformities
  • Open flaps

Custom Packaging Inspection allows you to limit the false reject rate and meet the exact quality and standards needed for your product. Examples include: Inspecting for dents, defects, damage, holes, and creases in cartons. You can also use the machine vision system to check labels for wrinkles, position, skew, or date codes.

 

Verification of barcode, code date, and other label data

 

Print & Code Inspection Systems can automatically identify incorrect or damaged labels on products before they are released. Examples include:

  • Detecting damaged, sparse quality text
  • Checking 1D barcodes and 2D date matrix codes for readability and product match
  • Inspecting pre-printed artwork, ink-jet quality, laser markings, chemical etchings, etc
  • Verifying correct labeling, nutritional information, exact ingredients, etc.

 

Integration of vision systems with databases and software systems

 

Process Control Vision Systems allow you to utilize process feedback to achieve an efficient process line with an industrial vision process controls. Examples include:

  • Precise control of robot positioning with imaging systems
  • Capturing and communicating measured values to various data logging systems
  • Historical data capture from your process
  • Data trends logging for process monitoring and proactive maintenance
  • Event monitoring and event capture systems, etc.

 

Robot Guidance

 

Machine vision has given robots the power to “see” and react to changing conditions. Now, vision-guided robots can “feed” themselves using a two-dimensional (2D) machine vision to locate and guide the robot arm to loosely positioned parts on a conveyor, for example. With a variety of 3D machine vision technologies at their disposal, vision-guided robots can manipulate and assemble products of virtually any size and shape on a conveyor, rack, or bin, and even work right alongside humans without posing a serious safety threat. Our Openstack Collaborative Palletizer is the best example of a well-implemented machine vision system that allows this palletizer to work together with humans. Tishma Technologies’ TT-400 Candy Cartoner, and TT-60TG Blister Tray Packer also feature machine vision: they have integrated open flaps detection and rejection systems.

So, if you are in a search for a cartoningtray packingcase packing or palletizing solution with integrated inspection and verification machine vision systems, don’t hesitate to contact us and get a free quote!

Intertape Polymer Group Announces Agreement to Acquire Nortech Packaging

MONTREAL, QUEBEC and SARASOTA, FLORIDA – February 10, 2020 – Intertape Polymer Group Inc. announced it has entered into a definitive agreement to acquire substantially all of the operating assets of Nortech Packaging (“Nortech”) for cash consideration of approximately $36.5 million, subject to certain post-closing adjustments and potential earn-out consideration. All amounts are in US dollars.

 

 

Nortech manufactures, assembles and services automated packaging machines under the Nortech Packaging and Tishma Technologies brands. Its custom-infeed and robotic solutions for packaging applications are designed for cartoning, casepacking, case-erecting, pouch-packaging and palletizing. A privately-held company based in the greater Chicago, Illinois area, Nortech services customers worldwide across major industries including food, pharmaceutical, e-commerce, confections, personal care and cosmetics, and beverage.

The acquisition will expand IPG’s product bundle into technologies that are increasingly critical to automation in packaging. Automation system design and service are key capabilities in growing markets like e-commerce. With an installed fleet of more than 400 machines, the acquisition provides IPG with opportunities to supply consumables to the existing fleet, as well as deploy system-selling for new customers combining machines with ongoing consumables. The acquisition will add engineering automation and integrated robotic design talent to IPG’s existing engineering and design teams. Upon closing, IPG expects these new capabilities will allow it to service customers experiencing growth pressures that require a customized automation
solution. “Packaging automation and system design are playing an increasingly important role in our customer’s competitive positioning, especially in the e-commerce market. We believe this acquisition will provide us with the opportunity to move upstream in our target customer’s production process with an expanded product bundle and a continuous supply of consumables,” said Greg Yull, President and CEO of IPG. “We have laid out a clear strategy to further strengthen our product bundle and continue to grow with our e-commerce customers as they expand around the globe. This acquisition delivers on both fronts. We remain committed to paying down debt moving forward as our cash flows improve with contributions from our recent capex investments
and our earlier acquisitions. At the same time, we will continue to be disciplined in our approach to acquisitions that strengthen our product bundle or offer strategic benefit to IPG meeting our customer’s needs.” The acquisition is subject to customary closing conditions and approvals and is expected to close in the first quarter of 2020.

Financial Highlights of the Acquisition

In the last twelve months, Nortech’s sales were approximately $20 million with Adjusted EBITDA (as determined consistent with IPG’s definition, as provided in its historical public filings) of $5.5 million. The upfront purchase price represents an Adjusted EBITDA multiple of 6.6x. The purchase price, when including the tax basis step-up value, represents an Adjusted EBITDA multiple of 5.7x without any consideration given to potential revenue synergies. In addition to the upfront purchase price, the sellers will be eligible to receive additional consideration contingent upon certain future performance measures of the acquired assets. This additional consideration is expected to be in line with the upfront Adjusted EBITDAmultiple announced today. IPG expects the acquisition will be accretive to net earnings in 2020 excluding deal costs, integration costs and noncash purchase accounting adjustments. In total, deal and integration costs are expected to be approximately $2.4 million, with the majority of these costs expected to be recognized by the end of 2020. No cash or debt is expected to be acquired in the transaction. IPG expects to finance the acquisition with funds available under its $600 million credit facility.

About Nortech

Nortech is a full-service Chicago-area company founded in 2003, which acquired Tishma Technologies in 2016. Nortech specializes in both delivering and providing after-market servicing of world-class packaging machines designed for cartoning, case-packing, case-erecting, pouch-packaging, palletizing and other custom-infeed and robotic solutions for various packaging applications. Nortech designs and manufactures high-quality, high-efficiency packaging machinery, and packaging systems that are used worldwide in most major industries including food, pharmaceutical, ecommerce, confections, personal care and cosmetics, beverage, and many others. Nortech employs approximately 70 employees at its sole location in Schaumburg, Illinois.
For more information about Nortech, visit www.NortechPackaging.com and www.tminn.com.

About Intertape Polymer Group Inc.

Intertape Polymer Group Inc. is a recognized leader in the development, manufacture and sale of a variety of paper- and filmbased pressure sensitive and water-activated tapes, polyethylene and specialized polyolefin films, protective packaging, woven coated fabrics and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota, Florida, IPG employs approximately 3,600 employees with operations in 30 locations, including 21 manufacturing facilities in North America, four in Asia and one in Europe. For more information about IPG, visit www.itape.com.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, “forward-looking statements”), which are made in reliance upon the protections provided by such legislation for forward-looking statements. All statements other than statements of historical facts included in this press release, including statements regarding: the closing of the acquisition, including the expected timing; the purchase price for the acquisition and the funding of such purchase price; the benefits that the acquisition is expected to bring to IPG’s business, operations, and financial results; the expansion, enhancement and extension of IPG’s product offering and global presence and the opening of additional industry verticals; the strategic fit of Nortech with IPG’s existing product portfolio and operations; IPG’s reinforcement if its presence in existing product lines and customer channels, as well as access to new business segments; expected revenue, adjusted EBITDA, earnings and expense synergies; that the acquired operations will be accretive to net earnings in 2020; our paying down of debt; and the expected deal and integration costs and timing of such costs may constitute forward-looking statements. These forward-looking statements are based on current beliefs, assumptions, expectations, estimates, forecasts and projections made by IPG’s management. Words such as “may,” “will,” “should,” “expect,” “continue,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or “seek” or the
negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although IPG believes that the expectations reflected in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: business conditions and growth or declines in IPG’s industry, IPG’s customers’ industries and the general economy; the post-closing performance of Nortech, including the expected Adjusted EBITDA, revenue and expense synergies; the anticipated benefits from IPG’s other restructuring efforts; the anticipated benefits from
IPG’s acquisitions; the anticipated benefits from IPG’s capital expenditures; the quality and market reception of IPG’s products; IPG’s anticipated business strategies; risks and costs inherent in litigation; IPG’s ability to maintain and improve quality and customer service with current and new customers; anticipated trends in IPG’s business; anticipated cash flows from IPG’s
operations; availability of funds under IPG’s credit facility; and IPG’s ability to continue to control costs. IPG can give no assurance that these estimates and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be
material. Readers are cautioned not to place undue reliance on any forward-looking statement. For additional information regarding important factors that could cause actual results to differ materially from those expressed in these forward-looking statements and other risks and uncertainties, and the assumptions underlying the forward-looking statements, you are
encouraged to read “Item 3 Key Information – Risk Factors”, “Item 5 Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” and statements located elsewhere in IPG’s annual report on Form 20-F for the year ended December 31, 2018 and the other statements and factors contained in IPG’s filings with the Canadian securities regulators and the US Securities and Exchange Commission. Each of these forward-looking statements speaks only as of the date of this press release. IPG will not update these statements unless applicable securities laws require it to do so.

FOR FURTHER INFORMATION CONTACT:
Ross Marshall
Investor Relations
(T) (416) 526-1563
(E) ross.marshall@loderockadvisors.com