DIC has signed an agreement with a leading Japanese printing company, Dai Nippon Printing Co., Ltd. (DNP), and DNP subsidiary The Inctec Inc. to integrate the domestic printing inks businesses of DIC and the printing inks businesses of The Inctec in a joint venture to be established by DIC and DNP on October 1, 2009. The agrement was signed at the end of June.
DIC will have 66.6 percent of the JV, while DNP will control 33.4 percent. Annual total sales are estimated at 110 billion yen ($1.14 billion).
Demand for printing inks in the Japanese market has declined steadily since peaking in 2006. In light of the increasing prevalence of digital printing and the Internet, as well as Japan’s declining birth rate, conditions in the domestic printing inks market are expected to remain slow. Moreover, rising prices for crude oil and naphtha in recent years have resulted in a significant increase in raw materials costs for both companies.
Against this background, in December 2008 the three companies began discussing the idea of a business integration. Bringing together the know-how and management resources of DIC and The Inctec is expected to substantially enhance efficiency and competitiveness, creating an entity that is capable of sustainable growth even in a harsh operating environment.
As a consequence of these discussions, the three companies resolved that the best approach was for DIC and DNP to establish a joint venture that would take over the domestic printing inks businesses of DIC and the printing inks businesses of The Inctec. The new company will be a consolidated subsidiary of DIC.
As one of Japan’s leading manufacturers of printing inks, DIC is known for its outstanding technological capabilities product quality, as well as its organic pigment and synthesizing technologies. The Inctec is a reputed manufacturer with a top domestic market share in such areas as news inks and sheetfed offset inks and technological capabilities that enable it to offer dispersions and blends tailored to customers’ needs. By drawing on the respective strengths of the two companies, the business integration is expected to facilitate the development of superior-quality, highly competitive new products and the realization of a stable supply structure.