UPM Keeps Its Eye on RFID

The company hasn't ruled out using the Fletcher plant to produce HF tags in the long term, if demand develops in the United States. "The market and the players are focused on the retail supply chain, but now there are some solid emerging opportunities in the HF field, as well, in applications such as pharma," says Strömberg. In Europe, HF still dominates Raflatac's RFID sales and production.

At present, the Jyvaskyla plant has the capacity to produce 250 million tags a year. Each of the site's five production lines is capable of producing either HF or UHF inlays, as well as a wide array of tag designs. However, with the new U.S. plant now in operation, the company is in the process of handing over production of UHF tags to the U.S. plant entirely.

The Jyvaskyla plant has the capacity to produce 250 million tags a year.

According to UPM, it had been looking at the potential for setting up an operation in the United States, but quick growth in demand for UHF tags in this country made the plan a reality in 2005. "We had a master plan of adding U.S. production years ago, and it was just a matter of waiting for the right timing. When we saw the UHF market in the U.S. was growing fast, we made the final decision to go ahead and build the plant there," says Terävä.

While the major responsibility for delivering Raflatac's UHF inlays has been given to a new production plant, the Finnish operation has also recently handed over antenna production to Intune Circuits, formed jointly last May by UPM-Kymmene; Outokumpu Technology, a Finnish maker of stainless steel coils, wires, rods and bars; and Finnish Industry Investment Ltd., a government-owned venture capital company administered by the Finnish Ministry of Trade and Industry (see Intune Producing RFID Tag Antennas).

The rationale behind taking Rafsec out of antenna manufacturing was to increase the company's production flexibility and, potentially, save money. "When we made antennas ourselves, we invested in one production technology and we were tied to it," explains Härkönen, adding that Rafsec had not fully been able to utilize its own antenna manufacturing production capacity. "Now we have outsourced antenna production. If there is a better technology, we can use it."

Although Rafsec's antenna manufacturing machines in Jyvaskyla were sold to Intune, they have remained in the plant. Intune employees continue to operate the equipment at the Jyvaskyla site, while Intune prepares its own production facility outside Helsinki. The antenna maker says it plans to move the production line to its Helsinki facility by the middle of next year.

At present, Intune produces about two-thirds of the antennas used by Raflatac's Jyvaskyla production lines. In turn, Raflatac is currently Intune's only customer. The companies insist, however, they are not required to work with each other. "We handle Intune like any other supplier—they have to show they are comparable on price and quality," says Terävä. Rafsec, however, had always sourced its label stock solely from its former sibling company and now parent, Raflatac.

The most common inlays produced at the plant in Europe have a credit card-sized antenna and are used primarily for library book and media management systems and for closed-loop industrial applications tracking components in electronics manufacturing.