Overall, the flexo market has fared relatively well this past year. While the flexible packaging segment has exhibited the most growth, paperboard has contributed some incremental growth as well.
“The flexo market has been less affected than other markets by the general slowness of the economy over the last several years,” said Mike Impastato, vice president, market development, North American packaging division, Flint Group. “It has held up well with good strength in flexible packaging, and somewhat less strength in paper and board applications.”
“The flexo market held its own in 2005,” said Jim Freid, product manager, fluid inks and coatings at Wikoff Color. “It was an area where we saw good sales growth and developed additional opportunities that we expect to benefit from in 2006.”
“The flexo market, which includes packaging, labels and a small amount of commercial newspaper printing, grew slightly in 2005. The strongest growth was in packaging, but that was probably less than 2.5 percent in 2005,” said Brian Chwierut, flexible packaging product manager, Sun Chemical North America Packaging Inks.
“Our business has been quite good,” said Bob Nowak, general manager, flexo operations at Braden Sutphin Ink. “Our sales growth has come in tag and label, envelope and flexible film. Nine of our last 10 months have seen double-digit growth compared to the previous year, and the gains have been across the board.”
Curwood, Inc.’s Jennie-O Turkey Store “Oven Ready” Turkey Bag with Curwood’s IntegraScore opening feature received the 2005 Flexible Packaging Association’s (FPA) Highest Achievement Award in Packaging Excellence as well as a Gold Award in Packaging Excellence and Silver Award in Printing Achievement.
“In general the packaging ink growth in North America and Europe is very close to their respective GNPs,” said Mr. Impastato. “In other parts of the world we see the growth in double digits. The hot spots now appear to be Southeast Asia and China. Those areas are growing very fast and will likely continue to have a high growth rate for the next several years.”
“We have found that our products are profitably exportable if the demand is due to quality or consistency issues that an export customer may have with their local supplier,” Mr. Freid said. “However, the freight and usual import duties add enough to the cost that prevent us from competing solely on the basis of price.”
“In Europe and Japan, flexography is not as dominant in package printing as it is in North America,” said Mr. Chwierut. “However, it is gaining increasing acceptance worldwide as its quality approaches that of gravure printing and also because many have found that it produces some cost advantages in the product process.”
Raising Ink Prices
Of course one of the most important issues effecting the flexo ink market and the ink market as a whole is the continuing rise in prices of raw material and fuel. Flexo ink manufacturers had a tough time passing these cost increases on to their customers.
“Prices have increased over the last year, but not nearly at a rate that will recover the high costs of raw materials,” said Mr. Impastato. “Our industry has been working diligently over the last six to eight years to cut cost out of our businesses. Those successful cost cutting and cost control measures made it possible to offset the cost increases we experienced over those years, with little if any of the cost increase being passed through the supply change to the packaging buyer. Because we have trimmed our cost and streamlined our businesses over this period, there isn’t additional opportunity to offset these latest raw materials cost increases. The ink industry cannot sustain itself long term unless it can pass through these material cost increases.”
“Price increases of any kind are difficult,” said Mr. Freid. “The suppliers of the raw materials to us usually hold their pricing as long as possible. But when they are passed along to us, we examine our options. We have the choice of losing some profitability if we don’t raise prices, or risk losing some business if we do raise prices. In the past, costs increased incrementally over some time period and getting increases was very difficult. During the past 12 months, it has sometimes been easier to get increases through because the drastic changes in petroleum-based products have been front-page news and everyone has seemed to accept higher energy costs on a personal basis. For example, when the price of oil doubles, the increases are an easier sell than during times when energy costs were more stable. And yes, we have been successful in getting price increase through.”
According to Mr. Chwierut, the ink industry is facing steadily increasing costs, raw material shortages and complications from natural disasters. “Volatile prices for raw materials affect both manufacturing and transportation costs, necessitating increases in ink prices,” he said. “Most printers have accepted these increases because they know ink makers could not absorb the rapid hikes in material costs as they have for several years and still continue to meet the demands of customers.”
Flexible packaging, with its demand for high quality graphics and inks, offers the most potential for growth, but flexo ink manufacturers caution that growth could be hampered by the continuing rise in raw material prices.
“We believe we will continue to see good growth in flexible packaging for 2006, but that growth could be tempered by a continuing escalation in oil and feedstock costs,” said Mr. Impastato.
“The area showing the most promise in 2006 is the flexible packaging market,” said Mr. Freid. “There is a growing demand for improved graphics, and quality ink products are needed to meet this demand. We feel that we are well positioned to meet those needs.”
According to Mr. Chwierut, in packaging, stand-up pouches and shrink sleeves are likely to show growth in 2006.
Solvent vs. Water
In terms of growth, solvent-based inks continue to dominate over water-based inks in the flexo market.
“We have observed that both products have their specific niches and the growth of solvent-based products is primarily due to the growth of the flexible packaging market,” said Mr. Freid. “Water-based is not yet capable of meeting all of the demands on high end flexible packaging, but is perfectly suitable for meeting the demands of the label and folding-carton markets.”
Braden Sutphin is focusing its efforts on water-based flexo inks. “We’ve chosen to stay away from solvent-based inks,” Mr. Nowak said. “We have many potential customers looking to switch away from solvents due to environmental concerns.”
Another area of growth in flexo is UV technology.
“UV flexo continues to grow steadily as new applications are found for its unique characteristics,” said Mr. Impastato. “In some markets like narrow web label, UV flexo has gained a strong position and is looked on as a standard product. In other market areas, like film printing, UV flexo is still emerging as a viable technology.”
“In the U.S., flexography is already the dominant printing process for many types of package printing, so it is unlikely to gain much further share against offset, gravure or letterpress printing,” said Mr. Chwierut. “UV flexo is becoming increasingly popular for labels, representing one area of growth.”
So far, digital technologies have not had a significant impact on flexo’s use.
“We recognize that digital printing is replacing some printing that was done by litho or flexo processes, but we have seen little impact in the markets that we participate,” said Mr. Freid.
“At this point, the biggest impact digital technology is having is in the prepress arena, where it is used in making separations and in computer-to-plate manufacturing,” said Mr. Chwierut. “Some label converters are using small digital printers to produce shorter runs of labels. In the packaging area, digital printing is not yet having a major impact, primarily because it cannot be used in many of the packaging structures or it does not have the speed and affordable costs for mass manufacturing that other processes, such as flexo, can supply. Ink jet printers are used for imprinting information on many packages, but this is not a substantial portion of the package’s cost.”
Flexo offers its users a variety of improved characteristics. “Higher speed, quick changeover flexo presses will further enhance flexo’s ability to compete in cost sensitive areas of the market,” said Mr. Impastato. “The productivity provided by this advanced equipment changes the economics in the highly cost competitive parts of the market.”
“The continued growth of direct drive-gearless flexo presses in addition to the sleeve anilox and plate systems continue to improve the print quality and competitive costs versus offset and gravure printing,” said Mr. Freid. “We also see the economic opportunities proved by the 7-color process print systems, such as Opaltone, allowing the printer to reduce operating cost while providing high-end graphic capabilities.”
“Printers increasingly are using finer aniloxes to achieve better laydown of fine ink films, which can improve the quality of print,” said Mr. Chwierut. “In addition, some printers are exploring the use five-color or six-color process printing to expand the gamut of colors they can easily reproduce without using special inks. Recent developments in prepress have allowed printers to factor these colors into their separations.”
Flexo ink makers are working hard to deliver added value to their customers.From improved customer service to the latest technologies, flexo ink manufacturers are continually challenged to meet the demands of their customers.
“Sun Chemical strives to produce a continuous stream of innovative products that allow printers and converters to achieve new effects and efficiencies in their operations,” said Mr. Chwierut.
“We have three product development labs that handle the increasing technical requirements and demands of our customers,” said Mr. Freid. “These labs are comprised of chemists, ink technicians and people with practical printing experience. We also have intensive internal training for our sales and technical representatives so that other service demands of the customers can be met on a timely basis. Our goal is to help our customers improve their printing efficiencies, and in doing so, help reduce their operational cost and improve profitability. We help our customers make money.”
Focusing on providing value is essential in today’s business world.
“Printers want an ink company that can deliver on the four Rs (the right ink, at the right press, at the right time for the right price),” said Mr. Impastato. “Adding value for our customers means that we can either reduce their applied costs or help them grow their business. During these hectic days, no one has time or resources to spend on services or activities that don’t add value at one or both of these two basic levels. This is where we are maintaining our focus.”
New Products For the Flexo Market
Sun Chemical has launched a new retort ink called Duratort, which can be used for both flexographic and gravure printing. According to Sun, this ink represents a real advance for retort, a growing segment of the flexible packaging market that has been printed primarily with gravure to this point. “In retort packaging, the food or other product is cooked at temperatures up to 250° in a laminated pouch that also serves as its package,” said Brian Chwierut, flexible packaging product manager, Sun Chemical North American Packaging Inks. “Duratort can be printed using the flexo process, and maintain excellent reproduction and very good bond strengths on a variety of films. For example, the Duratort inks will allow converters interested in retort packaging to use their operations. For example, the Duratort inks will allow converters interested in retort packaging to use their existing flexo presses to expand into this growing area. In addition, Sun Chemical backs its products with the best technical service in the business and support from the largest number of local service centers around the country.”
Braden Sutphin is offering its new pH Neutral ink, which minimizes ink tweaking, and benefit include a cleaner environment, faster cleanup time, faster anilox, and engineered for high end process work.
This year Flint Ink will be launching a line of high-strength solvent-based inks. “These new inks will support finer anilox usage, providing better graphics, better run efficiency and better end-use properties,” said Mike Impastato, VP Market Development, North American Packaging Division, Flint Group
“Wikoff has successfully introduced a range of high performance-high color density, high speed process inks for fine line anilox applications across a number of its product lines,” said Jim Freid product manager, fluid inks and coatings for Wikoff Color. “Specific inks have been formulated for high gloss surface print in regular and lightfast applications, heat resistant and multi-purpose laminating applications. The systems offer the printer exceptional color fidelity capabilities for high-end graphic reproduction. Other new products are constantly being introduced that are mostly modifications of existing products, again, that are required to meet some specific requirement.