UPM Keeps Its Eye on RFID

"All our products are directed either to converters for converting, converters acting as a sales channel or systems integrators," says Tommi Terävä, vice president of production at Raflatac's RFID division.

Raflatac has RFID manufacturing plants in both the United States and Finland, but it is its Finnish plant—located in the university town of Jyvaskyla, about 150 miles north from the company's Tampere headquarters—that produced Rafsec's first products. Operations here have also had to adapt to the changes in the RFID market (and UPM's strategy) since the plant first opened in 1999.



The facility covers 6,000 square meters and comprises five production lines for wide-web inlay manufacturing, where inlays are produced on a plastic film substrate preloaded with tag antennas. In the past two and a half years, Rafsec doubled its capacity and added four new production lines to the site to produce both UHF and HF tags.

The U.S. facility, in Fletcher, N.C., was built in 2005 and was up and running by October as part of a $24 million (€19 million) investment program. When fully implemented, it will give the plant an annual production capacity of 1 billion RFID tags. The U.S. plant was located close to the pressure-sensitive label stock production facility run by Raflatac, which supplied all the label stock used by Rafsec. The U.S. operation will be developed in stages to match production capacity with demand. So far, the first phase of the build-out gives the plant the capacity to make 250 million tags a year.

The two plants represent different approaches to the emerging RFID market. While the U.S. plant is configured to produce a limited number of inlay designs, all for the UHF market, the Finnish site has been configured with greater flexibility to meet the demands of the existing European market for HF RFID inlays, combined with the emergence of UHF RFID deployments. That flexibility was key during the first few years the Finnish plant was in operation.



"When production started in Jyvaskyla, there was no homogeneous RFID market," explains Strömberg. "At one time, we produced hundreds of products because all our customers wanted something different. We have been able to radically reduce the number of products down to around 50, with 20 percent of the designs making up around 80 percent of the volume."

The newly built U.S. plant, on the other hand, has been designed with a single technology (UHF) and low-cost production in mind. "The U.S. plant is dedicated for retail supply chain, which is by and large the first homogeneous RFID market. In the U.S., we were able to dedicate production to UHF products for higher production volume and efficiency," says Strömberg.

While the U.S. production plant manufactures its UHF inlays on a narrow web, the Finnish plant's five production lines use wide webs, adding flexibility to its production capabilities with the ability to create a wider range of inlay designs. While both narrow and wide web production lines can produce HF and UHF tags, Raflatac's RFID division maintains that extensive studies have shown that for its own products, narrow web can be used to produce UHF tags more economically than a wide-web process.