From left, previous Ault Award winners Jimmy Sutphin, Harvey Brice, H. Howard Flint, Cal Sutphin, Ronald Barry and Ron Baker gather after Cal Sutphin received the 2002 Ault Award.
Heading into the National Association of Printing Ink Manufacturers’ (NAPIM) Annual Convention at Loews Ventana Canyon Resort, Tucson, AZ, on April 14-17, there was a great deal of concern over the impact that the downturn in the U.S. economy would have on the convention. Not only was attendance expected to be down significantly, the numbers that were expected from NAPIM’s State of the Industry Report would undoubtedly be troubling.
Attendance was indeed down, to approximately 260 as opposed to last year’s 300, but not as low as first thought, and the report’s numbers confirmed what everyone knew about 2001. Still, although there remains concern for the economy, the NAPIM convention provided attendees with some hope as to where the industry is headed.
State of the Industry
The U.S. economy was on the minds of attendees, and the results of NAPIM’s State of the Industry Report confirmed what everyone knew happened last year. The report, which was delivered by Brad Bergey, Sun Chemical’s corporate vice president, operations support and chair of NAPIM’s Management Information Committee, offered little in the way of good news.
“There is no question that 2001 represented a difficult year for most printing ink companies,” the report began. “Every quarter in 2001 was significantly below the same quarter in 2000. The full year decline amounted to a sales reduction of 5.8 percent in value and 8.5 percent in volume.”
Among the major printing processes, litho had a sharp decline of 11.6 percent in volume, with gravure declining by 7.3 percent and flexo actually increasing in volume by 0.1 percent.
Water-based flexo was up 4.7 percent in volume, the lone bright spot among the three major processes.
In particular, publication and commercial ink manufacturers suffered, with a 7.5 percent decline in sales and a 10.4 percent drop in volume vs. 2000. As in the case of litho’s overall numbers, heatset inks declined 13.2 percent in volume in 2001, and litho no-heat inks dropped 11.5 percent.
On the packaging side, the news was somewhat better. Packaging ink sales declined 3.4 percent, while volume fell 2.6 percent from 2000 levels. Sheetfed ink’s 9.3 percent volume decline from last year was particularly noteworthy.
As might be expected, earnings before interest and taxes (EBIT) was down 7 percent to 5.4 percent, although the ink companies surveyed noted that their return on net assets (RONA) did not decline in 2001, holding steady at 12 percent. That suggests that ink companies controlled their spending during 2001.
2002’s Early Returns
Is there good news ahead? There are a wide variety of studies that have been conducted by the Printing Industries of America (PIA), the National Association for Printing Leadership (NAPL) and other printing-based organizations that are showing that the printing industry has turned around in 2002.
“More recently we started to hear from our respondents that business is starting to pick up a bit,” said Joseph Truncale, NAPL’s executive vice president, who spoke during NAPIM’s convention. “Some people feel that their customers are no longer putting off business that they have.”
The news from the packaging industry appears to literally be brighter, particularly in terms of the increasing emphasis on colors.
“Studies show that consumers take just seconds to decide what to choose, and that in-store decisions are increasing,” said James Peters of Peters + Associates, a consulting firm, who addressed the convention. “Visual appeal is the number one factor in these decisions. Flexible packaging is growing because of its gloss and color. Everywhere, color and graphic effects are exploding, which creates shelf impact. There’s also less shelf time, as ‘in-and-out brands,’ such as cereals tied to popular characters, will probably be gone within nine months for the next flavor.”
Henri Dyner, Sun Chemical’s former president and CEO, displays his Printing Ink Pioneer Award, as from left, Sun Chemical’s Wes Lucas, Josephine Dyner, Elisabet Lucas, US Ink’s Ron and Irene Baker, and Sun Chemical’s Michael and Sue Murphy look on.
From left, NAPIM president William Rimel III, Kathleen Rimel, Sue Coleman and NAPIM executive director James Coleman take a break during the Ault Award dinner.
From left, H. Howard II of Flint Inc, Lisa Schneider of General Press Colors, Amber and David Flint of Ink enjoy a moment together.
However, many ink industry leaders aren’t seeing the same upsurge, as the results from the first quarter and start of the second quarter remain on a par with 2001’s dismal results. Whether the ink industry will lag behind their printing customers for a few months remains to be seen.
Mr. Bergey said that the early returns from 2002 have not been promising. “The first quarter is the same as the fourth quarter,” he said.
“I don’t see the economy turning around, but I am optimistic,” said Harvey Brice, president of Superior Printing Ink. “One area of concern is annual reports. Companies aren’t spending as
much money to promote their companies, and are not using spot colors. Annual reports have been impacted by the economy.”
The packaging ink side suffered much less than the publication and commercial side last year, and leaders in key packaging ink companies said that this year may hold promise.
“I think our customers’ volumes are picking up a bit, and we’re also picking up some new business,” said George Sickinger, chairman, CEO and president of Color Resolutions International.
‘The first quarter looked good,” said Kent Wishart, president of Graphic Sciences. “My feeling is that the economy has bottomed out, but it is bumping along the bottom. We’ve picked up good market share so we’re doing OK, but our customers seem to be off 6 percent to 8 percent.”
“My most optimistic read is that the economy has leveled off, but our plans have the economy staying flat,” said Ronald Barry, chairman of Color Converting Industries. “Any increase in our customers’ business would be something above and beyond what we foresee. We also see continued pressure on unit price, forcing the industry to resist it with a different value offering.”
There were other key moments throughout the annual convention. The Ault Award banquet, always an important event, honors an individual who has made an outstanding contribution to the industry. This year’s recipient is Cal Sutphin, president of Braden Sutphin Ink Company and longtime industry leader (please see story on p. 28).
In addition, NAPIM presented Printing Ink Pioneer Awards to Henri Dyner, former president and CEO of Sun Chemical; John Jewelinski, senior account representative at A.J. Daw Printing Ink; Leonard Shaffer, director of globaltechnology at Flint Ink; Leonard A. Walle, director of new business development at Flint Ink; and Joseph DiChiarro, vice president of operations at INX International. (For a full report, please see May 2002 Ink World, p. 14.)
Enjoying Activities During NAPIM
Second from left, Naomi Matsuzawa of INX International hit a hole-in-one at the 202 yard, par 4 14th hole on the Canyon Course at Ventana, shown in the background. On hand for the shot were, at left, Alvar’s Art Lersch, Susan Hockmeyer of Hockmeyer Equipment and Jack Gallagher of Shamrock Technologies.
Flint Ink’s Paul Schroeder, left, and H. Howard Flint II enjoy a laugh during the Suppliers’ Party.
From left, George Sickinger of Color Resolutions, Lisa Hahn of Flexo Tech and Michael Gettis of Colorcon take a break from the Newcomers Reception.
From left, Shamrock Technologies’ Joon Choo, left, and Jack Gallagher, right, share a laugh with Maurice Carruthers of Sun Chemical’s Colors Group before the golf tournament.
At left, after the convention, NAPIM volunteers painted a house in Tucson in conjunction with Habitat for Humanity.
The Keynote Address was given by Lt. Gen. William Keys, USMC (Ret.), president and CEO, Colts Manufacturing. was followed by the Annual Meeting, where four new members were named to the board of directors: Patrick Carlisle, president of Joules Angstrom U.V. Printing Inks; Bill Hoagland, president of Squid Ink; Dan McDowell, president of Color Converting Industries, and Tak O’Haru, president of Toyo Ink America LLC.
“I was extremely pleased with the new additions to our board of directors, as it gives us the opportunity to explore new interests,” said Jim Coleman, executive director of NAPIM. “Bill Hoagland is already working on recruiting digital and ink jet ink manufacturers into NAPIM.”
At the Ault Awards
Ken and Emma Collins of Sun Chemical
From left, Color Converting Industries' Dan and Lori McDowell, Gina and Jim Ross, Hasu and Kent Shah, and Ginger and Ronald Barry.
Carroll Scientific's Rich and Debbie Bradley and Cartyn and Rick Tolin.
Clariants Linda and David Dugan, Dynamic Color Systems' Janet and David Grabacki and Clariant's Christine and Alex Sieber.
Lisa Hahn, president of Flexo Tech, gave a presentation on the new Flexsis flexo training system. The Supplier Party, chaired by Lisa Schneider, vice president of administration at General Press Colors, was done to the theme of “Wild, Wild West.”
Aside from the business at the convention, there were plenty of opportunities for recreation. There were trips into Sabino Canyon, DeGrazia’s “Gallery in the Sun,” San Xavier Mission and Tubac Center of the Arts, Kartchner Caverns, as well as tennis and golfing.
After the convention was finished, 15 volunteers stayed around to paint a house for Habitat for Humanity, keeping up the NAPIM tradition of helping the community where the convention is held in some way.
Even though attendance was down, NAPIM officials were happy with the convention’s results, given the state of the economy.
“I was very pleased with the convention,” Mr. Coleman said.
Ink Systems’ Christina Greenlaw and Urban Hirsch III, Inge Baecker and Kent Wishart of Graphic Sciences, and Ink Systems’ Patti and John Jilek and Al and Jean Nieman.
Kitsy and George Willock of Neville Chemical.
Ernesto and Cristina Sanchez of Sanchez, S.A. de C.V. Tintas.
Patrick and Nancy Carlisle of Joules Angstrom U.V. Printing Inks.
INX International’s Charles Weinholzer, Louisa Hurtado, Joe and Debbie Cichon.
“The decrease in attendance is the result of the economy,” said William Rimel III, president of NAPIM and president and CEO of American Inks and Coatings. “People aren’t spending the money, and companies are sending fewer people. Consolidation has also been a factor. Still, I think the convention has gone over very well.”