The Gravure Report
Gravure’s positions in publication and packaging printing offers a look at how the printing industry is faring.
By David Savastano
Marks & Spencer Raspberry and Mango Passion Fruit Coulis, printed by CLP Packaging Solutions, Inc., was the winner in the Packaging & Label Gravure Association’s 2009 Print Quality Awards’ International Pouches category. The judges commented that the rich, reverse printed graphics reflect the lusciousness of the sauce inside.
It should come as little surprise, then, that the packaging ink side of gravure is faring better than publication. In North America and, to a lesser extent, Europe, gravure is working to hold onto its market share against flexo.
“Flexographic printing continues to dominate the packaging sector within the North American and European sectors,” said Mike Impastato, vice president – strategic marketing, packaging and narrow web at Flint Group. “However, gravure does continue to enjoy a consistent market share that has remained level over the last several years – a trend we see continuing for the foreseeable future.”
Mr. Impastato believes the biggest threat in maintaining this market share is the current economic climate, should the recession continue past the end of the year.
“As packaging buyers look for more avenues to reduce cost and as volume decreases in alignment with general economic activity, there may be mounting pressure to drive costs down, which could cause some traditional gravure purchasers to look at other forms of printing,” Mr. Impastato said. “We do however believe that the percentage of short runs in packaging printing has now hit a peak level, and this will in turn make it difficult for flexo printers to take any additional market share from the packaging gravure sector. Technology continues to be a primary driver to the market– particularly in Europe where innovations such as laser gravure, automization or high-speed engraving heads have already led to significantly lower cylinder costs.”
In terms of packaging, gravure has its strongest presence in Europe and Asia, largely due to its excellent quality.
“In the packaging market, gravure continues to be the leading printing process of choice in Europe and continues to be a standard by which other printing processes, specifically flexographic printing, are measured,” said Michelle Hearn, director of marketing, North American Inks, Sun Chemical. “In North America, flexographic printing dominates the package printing business, but there are a number of gravure printers in North America. To meet the needs of both the gravure and growing flexographic market in North America, Sun Chemical introduced many of its inks for both printing processes.”
Peter Heimerzheim, corporate spokesperson for Siegwerk, noted that despite continuous trend towards shorter runs in Europe – and the resulting competitive advantage of flexo printing – big players in the market continue to invest in gravure.
“Emerging markets like Eastern Europe and Turkey seem to be a potential gravure market, thanks to homogenous consumer demands and resulting long runs,” Mr. Heimerzheim added. “Multinational packaging converters and local players in Eastern Europe, invest in gravure presses. In Central Europe, older gravure presses are being replaced by modern faster presses.”
Aviv Haruta, corporate communication, Toyo Ink Mfg. Co., Ltd., noted that growth in the packaging gravure sector slowed, albeit at a steady pace.
“In 2008, demand for gravure inks used in construction materials was exceptionally sluggish on a global level, not just in the U.S.,” said Mr. Haruta.
Mr. Haruta added that the Toyo Ink Group expects to see growth in the China and Southeast Asia markets in 2009, particularly with regard to demand for environment-friendly products and solutions.
“We see growth opportunities for gravure in packaging in particular in the regions of China, India and South America,” Mr. Haruta noted.
The global recession is having a major impact on packaging gravure printers.
“It seems as if the recession hits European gravure printers harder than flexo printers,” Mr. Heimerzheim said. “At branded goods manufacturers, there is a preference for gravure printed packaging. Since branded goods currently lose market share to retail brands and discounters, flexo printers suffer less. In addition, gravure is suffering from the current trend that batch sizes went down due to stock reduction and changed order behavior. This might change again in the long run.”
“The gravure market has certainly been impacted with the recession as with all areas of the packaging printing,” Mr. Impastato noted. “At this stage it is perhaps a little too early for packaging buyers to assess changes to printing methods; however, we have certainly witnessed a reduction in overall print volumes as inventories are reduced and future orders being much more conservatively managed.”
“The economic recession has made it a challenging time for gravure packaging printers,” Ms. Hearn said. “We saw a decrease in volume beginning in mid-October and that trend has continued into 2009. Our response is to focus on our customer through this difficult time. We will take appropriate measures to ensure that we can help our customers effectively weather the storm. In the current challenging market conditions, our solutions are designed to help customers operate more efficiently without sacrificing quality or service to their customers.”
There are some strong trends that are benefiting gravure printing. Ms. Hearn pointed to increasing interest in water-based gravure inks.
“A trend in packaging gravure is the revisiting of water-based inks as an alternative to solvent-based inks,” Ms. Hearn noted. “The main reason for this trend is the desire of more printers to find answers to the market’s demand for sustainability.”
Mr. Heimerzheim sees opportunities for flexible packaGing in Eastern Europe and Turkey.
“In Eastern Europe and Turkey, gravure can profit from the potential to substitute rigid packaging, such as glass or metal, e.g. through the replacement by stand-up pouches,” Mr. Heimerzheim said.
Mr. Impastato said that private label brands offer good possibilities for gravure.
“We believe we will see a growth in the private label (store brands) market particularly under the current recession,” Mr. Impastato said. “As consumers tighten spending, we would anticipate a larger movement towards private label products rather than branded items. As these products increase in volume and stature, we would expect to see some move to gravure, as the run sizes increase which will make gravure a more attractive economic option. The developments to reduce cylinder costs will only assist in making gravure a more attractive option – particularly for shorter runs.This may provide some boost for gravure, but it will likely have a small overall impact when viewed across all packaging segments. Geographically, Asia, Eastern Europe and particularly Russia continue to offer good opportunities for gravure market growth driven by high volume print runs.”
Ink manufacturers have developed new technologies that will assist gravure packaging.
Mr. Impastato noted that Flint Group continues to be very active in developing new technologies designed to deliver increased on-press and end user performance. In the last year Flint Group has introduced a number of new technologies, including Sterling GPF, a high performance nitro urethane system that is providing excellent printing properties with very good bonds and minimal retained solvents on a wide number of substrates.
In relation to water gravure, Flint Group’s Symplex G system has demonstrated outstanding press stability properties while providing excellent laydown on recycled board applications and requires minimal on press adjustment to keep running clean and smooth. The company has also expanded its Arrowshrink portfolio with the introduction of nitro-based systems that can be applied successfully on all the active types of substrates and is also available as economical systems for increased use on individual substrates.
Flint Group’s new X-12 system has been developed to provide excellent press properties with very high extrusion bonds and low retained solvents. In many industries, high extrusion bonds have been an elusive target for many years.
“We are focusing our efforts on technological innovations and development of eco-conscious products such as water-based ink systems,” Mr. Haruta said.
Mr. Heimerzheim said that Siegwerk has developed full EAC systems (solvent recovery systems) for retort application and PETP stand-up pouches as well as new high speed gravure inks for sleeves. “In addition, Siegwerk offers improved NC inks with outstanding good printability for reverse printing and lamination,” Mr. Heimerzheim added.
By contrast, the publication gravure business is facing considerabLy tougher times. Dennis Sweet, vice president, product management of publication inks, North American Inks, Sun Chemical, said that 2008 presented a challenging business year for the publication gravure printing industry.
“Advertising is the engine which drives most publication printing, and newspaper insert advertising makes up a significant part of the publication gravure print work,” Mr. Sweet said. “The economic downturn, combined with the struggling newspaper and magazine industry and the poor health of many retailers, have all contributed to the challenges of 2008. As the recession continues, we expect these challenges to continue in 2009.In this 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.”
“The global publication gravure market, like other ink segments, faced a challenging year in 2008, with markets down in comparison to 2007,” said Wolfgang Blumschein, vice president sales – Print Media Europe at Flint Group. “This decline was particularly evident during the second half of the year and we do not anticipate seeing a reversal of this trend until at least the final quarter of the year at the earliest. We do however believe that publication gravure will remain as a major printing platform due to the quality it can provide and that it will remain as a primary application for the foreseeable future.
“Flint Group constantly looks to develop initiatives which allow customers to be more efficient,” said Mr. Blumschein. “With Vendor Managed Inventories (VMI), we work hard with the customer to ensure that the client's supply chain is optimized and that logistic costs are reduced to a minimum. With regard to product development we support customers by offering high-quality specialities (such as special effects ink) which allow an enhanced promotion of sales magazines during the crisis. Moreover, Flint Group has actively supported the process of creating an industry-wide colour standardization in form of the ECI standard.”
“Flint Group has been actively involved in an initiative to develop optimized mediums for publication gravure printing to ensure highest quality on low quality papers, which is becoming more and more essential for publication gravure printers,” said Mr. Blumschein.
Mr. Heimerzheim noted thatEurope is Siegwerk’s major publication gravure market, and the company sees the publication gravure ink market decreasing by approximately 6 percent in 2008, and is expecting a further decrease in demand. Mr. Heimerzheimadded that Siegwerk has closed its Lynchburg, VA, production unit due to lack of orders awarded.
The economic downturn has definitely impacted publication gravure customers.
“The economic downturn has impacted our customers very heavily,” Mr. Heimerzheim said. “The printing industry is among the first industries to feel the signals of faltering economies.Advertising in magazines went down by 25 percent plus reduced circulations of magazines and catalogues. The business with leaflets and brochures remains stable.”
“Reduced advertising budgets, page counts, catalog print orders and decreased newspaper circulation have affected gravure printers every bit as much as most companies within the graphic arts industry,” Mr. Blumschein said. “As a consequence of the economic crisis, editors are cancelling low performing titles or allowing them to be produced by external contractors using news desks or even by pooling resources. Even Central and Eastern Europe, which had been a constantly growing market in recent years, is suffering.
“Shifting market demands and increasing postal charges continue to challenge the publication market and, therefore, publication gravure printing,” Mr. Blumschein added. “However, printers who remain innovative in today’s market will be well positioned to take advantage of increased print demand once the economy improves.”