The Sheetfed Ink Report
While the commercial sheetfed side of the business was soft, the folding carton market remained fairly steady in the past year.
By David Savastano
The sheetfed offset market offers a unique barometer on how the overall conventional ink market is faring, as sheetfed is utilized both in the commercial and packaging printing segments.
With the global economy in a deep recession, the commercial side of the sheetfed ink business is being impacted, while the packaging side is faring better.
Photo courtesy of Toyo Ink America, LLC.
“The decline was particularly evident during the fourth quarter of the year, which has historically been the busiest period for the market,” Mr. Labertew added. “This trend has also been similar for the packaging and commercial markets, although the commercial market does tend to feel the effects sooner, and to a greater extent. This is not surprising, as commercial printing is more closely tied to the ups and downs of the economy. Advertising budgets are some of the first cuts made as companies trim expenses.”
Dave Sambo, vice president of offset sales for INX International Ink Co., noted that sales were down on all commercial type systems and for all packaging of non-food related products.
“All of the food-related packaging either stayed at 2007 levels or showed significant growth, depending on the food group,” Mr. Sambo said. “This was due to the business and economy situation with the global markets as well as our domestic markets. When people are comfortable with the economic markets, they are more likely to dine out. The sit-down restaurants have been very vulnerable to the economy.The markets that usually pick up in these types of situations are fast food (including carry out) and boxed gourmet, which includes frozen dinners such as pizza and any full meal frozen packages.”
Brian Breidigan, vice president of product management for commercial inks, North American Inks, Sun Chemical, said that 2008 presented a challenging business year for the sheetfed printing industry.
“Both the conventional and UV sheetfed ink market has been flat or has seen softening and is experiencing many of the cost and price pressures shared by other segments in the printing industry as a whole during the recession,” Mr. Breidigan said. “In that kind of environment, Sun Chemical’s focus is on helping our customers grow their businesses and succeed. That means working for our customers everyday to further improve our performance on the essentials of our business such as reliable, on time delivery, consistent product quality, and investment in research and development.”
“When you view things from the market perspective, what we see is the folding carton packaging market did not drop off as dramatically, since there is regular consumer demand,” added Michelle Hearn, director of marketing, North American Inks, Sun Chemical. “The commercial sheetfed market, on the other hand, is one that has more of a discretional component to it in most cases. Advertising displays and brochures are examples. As a result, the commercial sheetfed market is down considerably with most businesses looking for ways to manage their spending.”
Steve Simpson, senior vice president, chief technical officer for Superior Printing Ink, reported that packaging is holding up better than commercial.
“Print buyers are minimizing inventory and targeting distribution very carefully, and consequently run lengths are shorter,” Mr. Simson added. “There is less use of special color matches, and more of a trend toward process printing.
“Another trend we are seeing in this economic downturn is that customers who invested in high-speed sheetfed presses arestriving to maximize productivity,” Mr. Simpson noted. “If the press can run at 18,000 sheets per hour and is only running at 16,000, they are losing money.It think it will be an interesting time, something of a battle between the new machines not yet paid for versus older machines that are not as efficient but are paid for. We continue to make sure that our products are as versatile as possible, and show our customers the benefits of a product that is predictable on press.”
“The business environment in the U.S. was terrible,” said Daryl Collins, vice president of national sales and regional operations for Wikoff Color. “As ink makers, we were faced with significant and frequent raw material increases throughout the year, and then to have volume fall off at the end of 2008 made matters worse. However, I think sheetfed packaging fared better than commercial printers.”
“Overall, we know that sheetfed printing was down industry wide,” said John Copeland, president and COO for Toyo Ink America (TIA). “Toyo Ink America still had a slight upturn in sheetfed sales.”
The Sheetfed Market
There are major forces – the economic downturn, new technologies, consolidation and declining demand among them – that are shaping the sheetfed industry, and ink manufacturers are working closely with their customers to help them adapt to the changing market.
“All of the forces you mention are impacting the sheetfed industry,” said Mr. Copeland. “TIA is working with printers to provide the right products for all of the applications needed as well as some of the high-tech looks they need to help their end-use customers.”
“All of the declines can be attributed to the view the government has painted with a gloomy economic forecast at this time,” Mr. Sambo said. “Political communications and actions can change public opinion, which in turn could spur confidence in point-of-purchase (POP) and luxury items.
“There are emerging technologies being introduced and the green movement is the single most identifiable action that is mandating changes in the offset arena,” Mr. Sambo said. “At INX, we have a ‘Green Scene’ team and a quarterly newsletter to foster and promote this very important change-of-thought process.We are managing renewable resources and incorporating them not only in our ink formulatory make-up, but we also are introducing a smaller carbon footprint in the manufacturing process that is conducive to the environment as well.INX personnel regularly attend industry functions and seminars to acquire more information and knowledge and we convey this to our customers and employees.”
“The commercial sheetfed market was facing numerous challenges even before the economic troubles of 2008 became apparent,” Mr. Labertew said. “The Internet and other media continue to erode print budgets meanwhile, costs have increased on many of the raw materials used in ink while capacity has decreased on some key feedstocks and raw materials. The current economic conditions we are witnessing have only served to compound all of this.”
“Packaging is very often viewed as being immune to economic hardship as it is less affected by downturns in advertising budgets,” Mr. Labertew said. “It does, however, feel the effects of notable economic challenges, sustainability efforts that decrease the amount of packaging, and decreased consumer purchases that might be stored or shipped in packages. In addition, flexible packaging continues to fight sheetfed packaging for shelf space.”
“Flint Group works closely with customers during these challenging times to help them maximize their ink on press performance to achieve optimum results. We stay informed of their changing needs as well as market legislation so we can proactively offer suggestions and help their businesses move forward. We continue to offer highly competitive products in terms of quality and cost while developing and supporting new technologies such as the INULINE ink/varnish system and Novastar Anilox ink series which continues to support the development of anilox technology. Flint Group also finds great market interest in its eco-friendly products, such as the new generation Novavit F 918 Supreme Bio inks. These high-performance vegetable-based inks excel even at very high speeds. As tough as the year was for everyone in the supply chain, we still see a strong need for sheetfed printing and for talented suppliers. Customers demand the same – if not more – quality, efficiency and innovation.”
“There are a number of forces currently shaping the conventional sheetfed industry,” Mr. Briedigan said. “The economic downturn is clearly the overriding force that has a major impact on the industry as a whole and is the catalyst for further consolidation and a decline in demand. The economic downturn is not only causing a decline in print, but is hastening the conversion from analog printing to digital printing. We continue to focus on our customers. We will continue to look for ways to increase productivity for our printers through quality, service and the new and innovative products that we provide.”
“On the energy curing sheetfed side of the industry, we see a trend towards efficiency as you would expect in today’s economic climate,”said Grant Shouldice, vice president of product management for energy curable inks, North American Inks, Sun Chemical. “Customers are taking a hard look at all costs and moving toward the most efficient model without giving up quality.”
New Ink Technologies
Sheetfed printers on the packaging and commercial side are facing more demands from end-users, and ink manufacturers are working to develop new productsto meet these needs. One area of interest is environmentally friendly technologies.
“New ink technologies this year were focused on increasing plant-derived, renewable content and on reducing cost,” said Don Duncan, director of R&D for Wikoff Color. “Both have generated a lot of interest at customers as they address the two main themes this year: sustainability and savings.”
“Our eco friendly products and ‘Kaleido’ process series are providing advantages printers need,” Mr. Copeland noted. “Our UV inks for paper and plastic provide great technology and flexibility for printers looking for an edge.”
“Our new EcoTech process color inks are rich in bio-based renewable raw materials (over 61 percent), of which 45 percent is vegetable oils and are very low (less than 5 percent) in VOCs,” Mr. Sambo said. “These inks are another result of the extensive resources and R&D efforts INX devotes to developing solutions that are economically feasible and environmentally viable. They give printers an advantage in on-press performance with fast start-ups and quick, return-to-color on run after run.Besides delivering super dot sharpness and press stability, especially in light coverage situations, they have excellent fast set and dry times.EcoTech inks also have good gloss and rub resistance, and are suitable for GRACoL certification and conform.”
“The INULINE system continues to attract interest due to the improved efficiencies it can provide whilst, the development in anilox technologies within the sheetfed sector is still gathering momentum,” Mr. Labertew said. “Energy curable inks continue to be a growth market in the U.S. and Flint Group continues to perform well in that arena.”
Mr. Breidigan noted that Sun Chemical recently launched its sharpest printing set, Triumph sheetfed inks, an ink technology that improves significantly on lithographic performance at very high production speeds to help those using new design presses become more productive. Triumph inks offer fast ink setting properties to improve work and turn efficiency. Triumph is Sun Chemical’s newest low-VOC ink technology and was crafted to enhance pressroom productivity by offering ultra high press performance and print quality standards.
Earth inks, another Sun Chemical offering, offer extremely low VOCs and high levels of renewable raw materials such as linseed, soybean and other vegetable oils. Earth inks produce only 2 percent VOCs, which makes this ink technology 80 percent lower in average VOCs than other standard sheetfed process inks now available. In addition, Rycoline, Sun Chemical's pressroom supplies division, has worked closely with the sheetfed ink team to develop a series of chemically-matched low VOC fountain solutions and washes.
Another breakthrough UV curing ink for sheetfed offset printing used primarily in Europe is Suncure Advantage, which uses 30 percent sustainable materials – a first for a UV curing ink, Mr. Shouldice noted. The twin challenges of high productivity at the highest press speeds, together with the need to source ‘sustainable’ materials, have resulted in this unique range of inks.
Expectations for Sheetfed
There are major forces – the economic downturn, new technologies, consolidation and declining demand among them – that are shaping the sheetfed industry. While expecting the market to remain challenging in the coming year, ink manufacturers are working closely with their customers to help them adapt to the changing market.
“Our short-term outlook is the sheetfed market is in a continual slide for commercial type process or applications,” Mr. Sambo said. “Long term, the outlook is much brighter with the introduction of environmentally friendly materials to promote the renewable movement, and the fact that for small printers to enter, it requires a relatively low amount of capital.”
“We expect 2009 to continue being a difficult year for commercial sheetfed printers,” said Mr. Breidigan. “It is difficult to predict when the economy may turn around, but it is possible that we will see stabilization in the market by the end of the year. Until then, Sun Chemical is committed to fulfilling our obligation as the leader of the industry. We will take appropriate measures to ensure that we can effectively weather the storm. At the same time, we remain committed to investing in our strategic imperatives and providing value to our customers.”
“For the energy curable sheetfed printers, in the short term, we expect to see the continuation of the challenges caused by the recession, more niche opportunities in packaging sheetfed industry and a customer base that values efficiency gains in their process,” Mr. Shouldice said. “Our long term expectations include a flat to slightly declining market which will attempt to rejuvenate itself by using new substrates for niche applications while emphasizing process efficiency with ink playing a major role.”
“I don’t have a crystal ball, but if the economy in the U.S. improves, I feel like sheetfed package printing will fare as well or better than competing methods of printing,” Mr. Collins said. “Sheetfed package printing offers very high quality printing on multi-color presses with many options on many substrates with UV inks and coatings, specialty coatings and specialty inks. Sheetfed commercial printing demand is likely to decline in the long term.”
“The print sector has been traditionally slow to recover and we believe the long term prospects for the sheetfed market will be at best a leveling off of demand,” Mr. Labertew said. “When conditions do improve, advertising budgets will increase and sheetfed printing will regain some of its losses, but sheetfed printing recovery will certainly trail economic recovery, as print budgets will be slow to return to old levels with alternative media continuing to be a threat to this.”
“Although the current economy is affecting the printing industry as a whole, we believe the sheetfed market will recover but will need to be self-promoting,” Mr. Copeland said. “In some ways, the industry needs to combat many of the negative ideas to continue in the future. There will still need to be sheetfed printing for the many applications the process fills.”
“There will still be a need for quality sheetfed printing for the foreseeable future,” Mr. Labertew concluded. “The most successful companies in the entire print supply chain will be those who offer consistent quality and service regardless of the economic challenges and competing markets.”