For wax, solvent and additive manufacturers, 2004 will be remembered for the first signs of growth in the ink industry.
However, as was the case for virtually every key raw material supplier, 2004 will also be less fondly remembered for the large increases in raw material prices.
With uncertainty over future pricing looming, wax, solvent and additive manufacturers are doing their best to get ready for 2005 and beyond.
2004 and the Future
In general, 2004 was a fairly successful year for suppliers.
“2004 has been an overall success,” said Michael Kucharski, marketing manager of graphics for Surface Specialties UCB. “We have seen organic growth for the first time in two years. Our sales to the graphics market are up 5 percent for both UV and waterborne customers, and next year, we expect to see a continued growth in the graphics market of 1 to 3 percent. We anticipate any slowdown will be because we’re coming off an election year, along with the continued move of the corrugated market outside of North America.”
“The recovery in the U.S. economy has impacted Sartomer very positively in 2004,” said Paul Elias, business director of specialty products for Sartomer. “Our results exceeded the prior year by a significant margin. This improvement is the result of increased activity across all the markets we serve, both domestically and internationally. With the continued economic recovery, we anticipate 2005 will be a robust year for business, barring any major political disruptions.”
“In general, our additives business is in the fastest growing areas – ink jet and UV curing inks and varnishes,” said Christopher Bridge, regional marketing manager-Americas, imaging and inks business line, coating effects segment at Ciba Specialty Chemicals.
“As a result, we have seen growth in these businesses, although we experienced in the early part of the year price pressures for some photoinitiator-type products.”
“Elementis Specialties is having a good year in terms of volume,” said Craig Baudendistel, business director at Elementis Specialties. “However, increasing raw material and energy costs has been a challenge.”
“Waxes and additives have not been impacted as heavily as many other areas of the ink industry,” said Phil Runge, product manager, Lawter International. “Prices on standard ink waxes such as microcrystalline, polyethylene and PTFE have been fairly stable over the last few years. However, intense price pressure still exists on the varnish portion of the wax compounds.”
Overall, Mr. Runge is optimistic about 2005.
“2005 will face many of the same challenges that 2004 experienced,” Mr Runge said. “Costs will continue to dominate discussions, and companies will have to continually evaluate their cost to manufacture. We expect to grow in 2005, and if the market continues to grow out of the depression that it currently faces, we expect 2005 to be an excellent year.”
Pricing and Supply
Raw materials pricing and availability are the key variables for suppliers.
“We see this year as a transition year for suppliers to continue strengthening their relationships with customers as both go through a time of adjusting to the fluctuating costs of raw materials,” said Joon Choo, vice president, worldwide marketing at Shamrock Technologies. “As we had been actively realigning and improving our internal capabilities in production and process development, we were able to minimize the impact of raw material increases for some of our product lines, which had ranged from 8 percent to 30 percent. We continue to work on this, and will support our customer base the best we can.
“Furthermore, processing recyclable PTFE has been one of our strengths, and in the face of rising raw material costs of prime resin, we have been able to assist customers in minimizing their costs increases for a key ingredient in their formula,” Mr. Choo said.
“2004 was a difficult year for raw materials,” Mr. Elias said. “While the U.S. economy suffered in recession from 2001 to 2003, very little industrial expansion took place. As a result, many industries were not prepared for the sudden increase in demand caused by the rapid expansion of the Chinese economy and the major improvements in the U.S. and Japanese economies.
“This lack of investment, combined with the record level of oil prices, has resulted in significant escalation of raw material costs and spot shortages of some materials,” Mr. Elias said. “The supply of acrylic acid is particularly tight, as are many of the alcohols that are used to manufacture the acrylates used in ink formulations. Several suppliers have announced force majeure on their contracts and have put their customers on allocation. For many raw materials, those which are not on allocation have been put on sales control. The net result is much higher prices for products when you can get them. The most critical issue facing the industry in 2005 will be maintaining an uninterrupted supply chain. With product shortages projected to continue well into the year, it will be very difficult to avoid an interruption.”
“We have seen rapid escalation of prices in almost all of the products we purchase,” said Mr. Kucharski. “Leading the way has been acrylic acid and all of its esters. Styrene is another key material undergoing rapid escalation. To add to the difficulties with escalating prices is the global shortage of acrylic acid and its esters. The entire industry is on allocations ranging from 50 to 80 percent of its annual consumption.”
Mr. Kucharski said that supply is the most difficult challenge.
“The global shortage of acrylic acid has forced many suppliers outside of North America to stay home due to the limited volumes,” Mr. Kucharski said. “The exit of those suppliers has caused a vacuum which the local suppliers are being forced to service with limited material. We continue to try and fill this gap, but there is a continuing tightness of supply. The idea of going out and being opportunistic in this market is next to impossible. We don’t expect this situation to change over the course of the next year, and we expect our raw materials to continue to increase until our suppliers get to the levels of reinvestment economics. “We’re informing our customers at every step of the way about continuing market developments so they can plan as best as possible,” Mr. Kucharski added. “At the same time, we’re looking at the possibility of different raw materials that may provide similar performance with better supply position.”
“The final part of the year has seen some high price increases coming through, with more forecast in 2005,” Mr. Bridge said. “This has been mainly following the oil price rises, as many raw materials are close to oil, but in addition there have been some capacity issues, most notably in acrylates. Supply of raw materials from China has become more difficult due to the rapid growth of business there, greater than the infrastructure provision. The cost of shipping from China, in particular, has become much more expensive as a consequence. Also, as the internal Chinese economy grows, and getting product through the ports increases in difficulty, more focus is being given on supply to Chinese customers.”
How to meet and overcome these challenges has become essential for suppliers. “The continuing challenge in the ink industry is the focus on lowering the overall cost of the ink due to increasing global competition and rising raw material and energy costs,” Mr. Baudendistel said. “Margins are being squeezed and one of our biggest challenges is to sustain healthy profitability in a highly competitive market place. At Elementis Specialties, we solve our customers’ most difficult problems by developing cost effective, value added products which help our clients to gain a competitive advantage in the market place. This approach is a win-win for Elementis Specialties and for our clients that we work with.”
“Acquisitions also play a key role for Elementis Specialties,” said Mr. Baudendistel. “In July 2004, we completed an acquisition which will broaden the range and performance characteristics of our specialty surfactant offerings and extends our innovation capabilities.”
Partnerships provide an excellent opportunity.
“The primary impediment to growth is the short-term focus mentality,” Mr. Runge said. “While companies do need to pay their bills today, very few companies are taking a long-term view. The primary way for printers, ink makers and suppliers to make strong margins again is to create true partnerships throughout the entire manufacturing chain. By understanding the drivers that affect each step of the process, each member of the chain can work together to remove waste from the entire system. This type of discussion will provide a very fertile ground for exploring new technologies and manufacturing methods.”
New Waxes, Solvents and Additives The following listing includes products introduced to the ink industry in 2004
Comments: AKC4716 is a high-quality sheetfed polyethelene wax compound.
Comments: AKC4544 is a heatset wax compound that is high solids (75%) yet pumpable.
Comments: AKC4545 is an economical heatset wax compound.
Ciba Specialty Chemicals Inc.
CH-4002, Basel, Switzerland
and North America:
540 White Plains Road
Tarrytown, NY 10591-9005
Phone: (914) 785 2000
Fax: (914) 785 4533
Comments: Tinuvin 520L is a water-soluble hindered amine light stabilizer (HALS) for imaging applications and is ideal for ink jet inks or ink jet receiving layers.
Comments: Tinuvin 460 is a new generation UV absorber for imaging applications. It offers efficient UV protection, and thinner layers can be applied due to the extremely high UV specific extinction.
Comments: Irgacure 127 photoinitiator exhibits extremely fast curing properties. It is not yet available for use in U.S., but is available for use in Mexico and Canada.
Irgastab UV 10
Comments: Irgastab UV 10 increases long-term stability of inks and coatings throughout their life cycle, from manufacturing to printing and curing. It is an effective radical scavenger that prevents the degradation of UV curable compositions while having minimal impact on curing speed.
Comments: Irgacure 379 is a photoinitiator that provides significantly improved solubility over Irgacure 369 while maintaining UV curing performance.
Comments: Dapro 10 provides viscosity reduction and pigment wetting in various types of solvent-based flexo, gravure and coatings applications. It is ideal for polyamide- and nitrocellulose-based inks.
Dapro NA 1622 defoamer
Comments: Dapro NA 1622 is highly effective in various types of solvent-based flexo, gravure and screen ink applications.
Comments: MicroMatte 1213 UVW is a finely micronized, modified polypropylene wax specifically formulated for use in water reducible and UV cured inks and coatings. It incorporates high molecular weight polymers and micro encapsulated silica to provide optimum mar and abrasion resistance while providing uniform and efficient gloss reduction. It is specifically formulated to eliminate flotation. In UV coatings, it will impart consistent, long lasting gloss control at lower viscosities than conventional matting agents.
Noveon Specialty Additives – Inks
Carroll Scientific, Inc.
9550 W. 55th St.
McCook, IL 60625
CC-5250D sheetfed polyethylene wax compound
Comments: CC-5250D is a 100% solids polyethylene wax compound utilizing advanced polymer design to provide excellent abrasion resistance with great gloss retention. The pure polyethylene polymer construction offers dependable overprinting.
Solsperse 39000 hyperdispersant for UV cured ink systems
Comments: Solsperse 39000 has been designed specifically to optimize carbon black pigment dispersion characteristics for UV curing resin systems.
CC-8500 overprint texturing primer
Comments: CC-8500 is designed as a primer to provide a textured matte finish when overcoated with conventional high gloss UV and waterborne coatings.
CC-8283 water pick-up control additive
Comments: CC-8283 is a new low level ink additive, expanding on the technology introduced in the CC-8280 last year, designed to provide control in fighting excessive ink emulsification in lithographic inks.
Fluotron 115 concentrated aqueous APE free virgin PTFE dispersion
Comments: Fluotron 115 is formulated with ultra fine particle size PTFE and is easy to disperse, provides superior release properties, along with the superior heat resistance of virgin PTFE. Fluotron 115 complies with FDA 21 CFR 175.300 and is alkyl phenol ethoxylate free.
Comments: CN2273 is a polyester acrylate oligomer designed for very fast cure response in inks, coatings and overprint varnishes requiring low odor. CN2273 exhibits low viscosity and flexibility with good pigment wetting characteristics. Its unique structure provides natural thixotropic properties for screen and lithographic inks.
Comments: CN2279 is a low viscosity polyester acrylate grinding vehicle designed for UV ink jet and UV flexo. Dispersions and inks made with CN2279 exhibit low viscosity, excellent flow, excellent stability and good color strength.
SR508IJ and SR9003IJ
Comments: SR508IJ and SR9003IJ are difunctional monomers designed to increase the gelation stability of UV formulations at elevated temperatures. Both are especially suited for use in UV ink jet applications due to their low viscosities, high Tg and fast cure speeds.
Comments: Vancryl Wax 35 is a nonionic PE emulsion for improved rub, scratch and slip without loss of gloss or clarity.
Comments: Knockdown 155 is a highly-effective non-silicone defoamer used at very low levels to reduce or prevent foam.
Comments: Process Plus is a shear-stable polymeric transfer, lubricating and leveling aid for flexo and gravure waterborne systems.
Comments: Mottlenot is a non-silicone leveling aid used to improve lay and reduce mottle of waterborne systems on paper and board.
Comments: Flexopunch AC-206 is a transfer and viscosity increase additive for acrylic-based waterborne inks and coatings.
Comments: Resolv is a low VOC additive for increased resolubility without loss of water-resistance or drying speed to increase open time and eliminate problems of rapid drying on plates, anilox, rollers and cylinders.
Comments: Ebecryl 381 is an additive for improving substrate wetting and coating flow and leveling in formulations cured by UV or EB.
Recent Trends in Waxes. Solvents and Additives
Waxes, solvents and additives manufacturers point to a variety of trends they see are changing the way business is being done.
With some ink companies switching to national product lines, additives manufacturers are better able to maintain volumes.
“As more and more national companies switch to national ink lines, the additive market has managed to maintain its volumes,” said Phil Runge, product manager, Lawter International. “The same ink that runs in the dead of winter in Maine is often not able to hold up to the heat of summer in Texas. Additives must be used to continue to maintain the ink properties of these national lines.”
“The ink industry is continuing to find ways of taking cost out of the products,” said Michael Kucharski, marketing manager of graphics for Surface Specialties UCB. “Streamlining operations, consolidation of facilities, and limiting number of formulations are high level focuses. Along with that, we expect to see continuing consolidation in the industry with businesses adding complementary product lines.”
“Beyond 2005, we will continue to see businesses move their manufacturing bases to the lower-cost countries in Asia,” said Paul Elias, business director of specialty products for Sartomer. “This is a major issue not only for our industry, but for America as a whole.
“Over the years, we have forged partnerships with our key suppliers,” Mr. Elias said. “With the shortages of 2004 expected to continue into 2005, these partnerships will help us minimize the impact of raw material shortages. In addition, we continue to work closely with our customers to develop new products that will give them a competitive edge in their markets.”
Some ink markets are thriving, while others still remain slower.
“We see the publication inks market as still suffering, though better than 2003 perhaps, packaging inks holding well and great opportunities in ink jet, where we offer a package of colorants, receptive coatings, various stabilizer types, and UV curing agents,” said Christopher Bridge, regional marketing manager-Americas, imaging and inks business line, coating effects segment at Ciba Specialty Chemicals.
Mr. Bridge said that the most difficult challenges are the 'copy products' from companies who make no investment in innovation as older products move to semi-specialties, and the ability to pass on increased costs to an industry which is itself unable to pass on cost increases.
Mr. Bridge said that Ciba is managing its resources to develop more quickly new solutions to customer problems, and is expanding its range of product offerings while at the same time managing costs in the older product areas. “Cost management means also that we are moving our manufacturing focus to areas of low cost and high growth, such as India and China, rather than into Europe and North America,” Mr. Bridge said.
Lawter has relied on its broad product lines to withstand the last few years, Mr. Runge said. “By understanding our resins and varnish businesses, we are able to apply that knowledge to give our customer a complete solution with a variety of possible options,” Mr. Runge said. “When a customer approaches Lawter with an opportunity, Lawter is in the unique position to modify the wax, vehicle and resin system of their ink in order to give them exactly what they desire. For instance, many resin systems in the ink industry result in ink systems that contain moderate to high water pickup. By incorporating an additive from Lawter’s Optilith series to their inks, many customers do not have to give up the properties that they value in their resins.”
Shamrock Technologies has been active in developing new solutions for customers.
“Our new ultrafine PTFE (nanoFLON) is giving developers a new opportunity to gain added benefits, and we see great potential in this,” said Joon Choo, vice president, worldwide marketing at Shamrock Technologies.
UV/EB are strong growth areas for ink manufacturers.
In terms of technology, Mr. Kucharski said that synthetic substrates continuing to be a critical need with a focus on products that go into the packaging market for both UV and water-based inks.
“The ink industry continues to expand the use of UV/EB technology,” Mr. Elias said.
“UV flexo and UV hybrid ink systems are growing very rapidly. While narrow web UV flexo has enjoyed significant growth over the past several years, expansion to mid and wide web substrates is increasing. The use of UV inks for digital printing also continues to grow.”