The Asian Ink Market

By David Savastano, Ink World Editor | 05.07.07

Driven by economic growth in China, India and other key countries, the Asia-Pacific region continues to grow at a fast pace, and is poised to become the largest region in terms of printing ink.

The $14.5 billion printing ink market is roughly split evenly between North America, Europe and Asia-Pacific. While the North American and European sales have flattened out, the Asia-Pacific region continues to grow at a fast pace, and should soon become the largest region in terms of ink consumption, driven by economic growth in China, India and other key countries.
“The printing ink industry in Asia grew by about 6 percent to 7 percent in 2006 compared to 2005,” said

Flint Group opened its new packaging and commercial ink plant in Guangzhou, China.
Ivan Cheng, sales manager, Asia for Flint Group. “China continues to lead the way with about 10 percent growth in the overall market. Other countries experiencing significant growth include Vietnam and Malaysia.”
As a result, ink manufacturers reported solid growth in the region during the past year.
“Relative to 2005, Toyo Ink saw a greater than 10 percent rise in shipments to the Asia (South and Southeast) and China regions,” said Aviv Haruta, general manager, public relations department, Toyo Ink Mfg. Co., Ltd. “Particularly striking was the increase in demand for specialized inks, such as UV inks.”
“China and India maintained strong economic growth in 2006, and the Japanese economy continued its recovery,” said Hisato Tanemura, group marketing director for Southeast Asia, Oceania and South Asia, Dainippon Ink & Chemicals (DIC). “Because of this, 2006 printing ink sales in the region were good, although our profit margins were squeezed by rapidly rising raw material costs.”
“India and Pakistan have shown the best growth, with double-digit growth in the sheetfed, news and liquid ink areas,” Mr. Tanemura added. “In China, sheetfed, web offset and packaging (liquid and UV offset) continued to have good results.
However, Mr. Tanemura added that due to a decrease in advertisement from the real estate industry as well as strong competition, news ink sales stagnated.
“China’s GDP growth in 2006 was about 9 percent,” Mr. Cheng noted. “Printing ink market growth trends slightly higher than GDP growth at about 10 percent. Again, packaging leads the way with growth of about 12 percent.” Mr. Cheng noted that packaging, conventional sheetfed offset and UV are particularly strong in China.
 “We increased our sales volume of gravure inks, especially in India and Indonesia, where we showed double-digit increases,” said Yuichiro Nishikawa, international operation division, Sakata Inx. “We started local full-scale production and sales in Vietnam in January 2007.” He added that Sakata Inx plans to construct a second printing ink production factory in India.    
“GDP in India increased in the fiscal year 2006 by 9 percent, and we estimate the printing ink industry will continue growing much more,” Mr. Nishikawa said. “Sakata Inx India is strengthening our production system in reply to the market demand.”

Ink Manufacturers’ Presence in Asia-Pacific

With a population of more than 3.5 billion in the region as well as the growing export market, there is plenty of opportunity for the printing industry.

Sakata Inx began production at its new printing ink manufacturing plant in Ho Chi Minh City, Vietnam in January 2007.
The growth of the printing industry in the Asia-Pacific region can be seen by the movement of major packaging printers into the region. These companies form a veritable “Who’s Who” of the packaging industry, from Tetra Pak, SCA Packaging, Crown Cork & Seal and CCL Labels to flexible packaging leaders Alcan, Amcor, Huhtamaki and Sealed Air Cryovac, among others.
Much like the ink market, the $45 billion flexible packaging market is presently broken up into fairly even portions between North America, Europe and Asia-Pacific, with the Asia-Pacific market growing fastest and likely to be the largest region by 2010.        
According to Paul Gaster, manager of flexible packaging for PCI Consulting, a UK-based consulting firm, Asia-Pacific accounts for $15 billion of the worldwide flexible packaging marketplace, and is growing at a 7 percent rate overall. China and India are exceeding that figure with 15 percent growth.
For example, Tetra Pak produced 23.5 billion packages in China in 2006 and added capacity for an additional eight billion packages at its Beijing facility during the year. In March 2007, Tetra Pak announced plans to build a state-of-the-art packaging material manufacturing plant in Hohhot, China which will add the capacity to produce eight billion more packages annually for the dairy and beverage industry when it goes online in late 2008.
Why the need for additional packaging? Tetra Pak CEO Dennis Jonsson pointed to the 26 percent average growth rate in the Chinese dairy industry from 1993 to 2004, with expectations for further double-digit growth ahead.
On the corrugated side, SCA Packaging has 21 sites in China, Malaysia, Indonesia and Singapore, and in March, acquired a 20 percent holding in Chinese tissue company Vinda, one of the four largest players within tissue in China.
On the beverage can side, major converters who have a manufacturing or sales presence in Asia-Pacific region include Rexam PLC, with eight sites in Asia, including four in China and two in Indonesia: Ball Corporation, which has had double-digit sales growth in China; and Crown Cork and Seal, which makes a wide range of metal packaging for food, beverage, personal care, household and industrial products and can making equipment. Its Asia-Pacific Division is comprised of 13 plants in six countries, and in 2006, had net sales of approximately $482 million. In February, Crown Asia Pacific Holdings Ltd announced it will construct a new wholly-owned beverage can production facility in Cambodia, located in the suburbs of the capital city Phnom Penh and close to local customer filling plants. The plant will have an annual production capacity of approximately 500 million two-piece, 33cl aluminum beverage cans. Commercial production is scheduled to begin by mid-2007.
With this investment, Crown will operate 10 2-pc beverage can plants in Asia – four in China and six plants in Southeast Asia, with two in Vietnam and one plant each in Malaysia, Singapore, Thailand and Cambodia.
While the label industry tends to be more localized and fragmented, CCL Labels, the world’s largest label manufacturer, has three facilities in Asia, including a personal care label plant in Guangzhou that opened in 2006, a battery and pressure sensitive beverage label plant in Hefei, China, and a personal care, food and beverage label facility in Thailand.

To meet this increasing demand,  the largest ink manufacturers have a strong presence in the region. DIC, Flint Group, Toyo Ink, Sakata Inx, Siegwerk, Huber Group, T&K Toka and many other top international ink companies have operations throughout the Asia-Pacific region.
DIC, the world’s largest ink manufacturer and Sun Chemical’s parent company, has eight ink manufacturing sites in China under the DIC and Coates labels; two each in India and Thailand; and one in Indonesia, Malaysia, Vietnam, Taiwan, Sri Lanka, Philippines, Pakistan, Australia and New Zealand.
Mr. Tanemura said that DIC plans production rationalization and capacity expansion of liquid inks in India. At the same time, DIC is reorganizing operations in Malaysia, Australia and New Zealand.
“We are also seeking opportunities for mergers and acquisitions or joint ventures with local companies in sheetfed, liquid and pigments in China and India,” Mr. Tanemura added. “To cope with the continuing rise in raw material and high energy prices, we are consolidating both purchasing and production activity throughout Asia. Furthermore, backward integration in production of pigment, varnish and offset ink in one place, now completed in Nantong, China, also is planned in India.”
Then there’s the Flint Group, the world’s second-largest ink manufacturer, which merged the ink operations of Flint Ink, BASF Drucksysteme and ANI Printing Inks (formerly Akzo Nobel Inks). Now that Flint Group has become fully integrated and opened a packaging and commercial ink plant in Guangzhou in 2006, the company is well situated in the region, manufacturing ink at two sites each in China, India and Australia, as well as one site in New Zealand.
“With our current facilities in Beijing for publication inks and Guangzhou for packaging inks, Flint Group is well-placed to enhance our market position in both the Chinese market as well as the rest of Asia,” Mr. Cheng said. “At this point in time, increasing our market share for products manufactured in Beijing and Guangzhou will be our main focus.
“We are now truly a global player fully equipped to provide total solutions to global customers,” Mr. Cheng said. “With our added strengths in packaging and sheetfed offset, we are equipped with a more specific product range to cater to the many needs of individual printers.”
Among Toyo Ink Mfg. Co., Ltd.’s operations is Tianjin Toyo Ink Co., Ltd., the largest ink company in

Tianjin Toyo Ink Co., Ltd., the largest ink company in China, is a joint venture between Toyo Ink Mfg. Co., Ltd. and Tianjin Ink Company. The company produces 12,000 tons in offset and news ink annually.
China. Tianjin Toyo is a joint venture between Toyo Ink Mfg. Co., Ltd. and Tianjin Ink Company and produces 12,000 tons in offset and news ink annually. Toyo Ink also manufactures inks in Shanghai and Guangdong in China, as well as in Singapore, Malaysia, Thailand, Philippines, Indonesia, Vietnam, South Korea and Australia.
Siegwerk Group has 17 sites in the region, including China, Indonesia, India, Malaysia, Singapore, Thailand, Australia and New Zealand.
Sakata Inx has manufacturing facilities in Philippines, Malaysia, Vietnam, India, Thailand, Taiwan, and Indonesia, and three facilities in China.
Aside from having the leading ink position in India as a result of its acquisition of Micro Inks in 2005, Huber Group is present in China, Thailand and Australia.
Meanwhile, Japanese UV ink specialist T&K Toka has a joint venture, Hangzhou Toka, the second-largest Chinese ink producer and a specialist in liquid, offset and UV inks. 

The Importance Of the Environment

The importance of environmentally-friendly products is increasing worldwide, and the Asia-Pacific region is definitely putting an emphasis on the environment.
“There is definitely an increase in environmental awareness,” Mr. Cheng said. “Food packages recently have taken on a more stringent requirement for residual toluene content. With the coming of the 2008 Olympics, environmentally-friendly inks in publications as well as packaging are expected to grow in demand.”
“Demand for environmentally-friendly inks is getting higher and higher,” Mr. Nishikawa noted.
As a result, there is growing interest in energy-curable products.
“UV applications are experiencing a very steep growth, particularly in offset and flexo,” Mr. Cheng said. “Tobacco packaging is a key growth area for UV inks.”
“The energy curable market is showing good growth for the coming years, supported by the growth in the overall printing market,” said Wim Dubois, market manager graphics, radcure, Asia for Cytec Surface Specialties. “More and more countries are implementing or have announced new legislation to promote environmental friendly products. This should stimulate the use of energy curable and waterborne technologies in the graphics industry. Growth in the energy curable printing industry is expected to be higher than overall GDP growth.
“At present there are many players active within the industry, resulting in strong and fierce competition,” Mr. Dubois added. “Consolidation between ink formulators is expected in the next years.
“Overall in Asia, we expect a growth of 8 to 9 percent for the UV graphics market, but with differences in growth expectation between different printing technologies and different areas within the Asia region,” Mr. Dubois said. “Looking at printing technologies, the main growth is expected in litho, flexo and digital printing. Within the Asia region, China will take the lead as the number one growth area with an expected annual growth rate of close to 15 percent for the next years.”
Mr. Tanemura said environmental regulations have begun to tighten in the Asia-Pacific region, and because of that, demand for environmentally-friendly inks, such as non-toluene/non-MEK liquid ink, water-based gravure ink and VOC-free offset ink have gradually increased in recent years, especially for export-oriented printers.
He pointed out that high-speed printing, environment-friendly inks and digitalization all are important trends in the Asian market.

Expectations for the Future

With the economic growth in the region, ink manufacturers have great expectations for Asia-Pacific in the coming years.
“With the economic growth of population giants China and India continuing, demand for printing ink in Asia-Pacific region should continue to grow for at least the next few years,” Mr. Tanemura said.
Raw material prices and consolidation among printers will remain a challenge for ink manufacturers. Mr. Tanemura added that high raw material prices, especially for solvents, and consolidation in printing industry will affect margins for the ink industry. Because of that, he expects consolidation in the printing ink industry to continue, especially in China.
“We can not expect the Japanese printing industry to grow more than other Asian countries although the sales volume has slightly increased,” Mr. Nishikawa noted. “On the other hand, we think the printing industry in the Asia-Pacific market will be growing up more together with the economic growth in the Southeast Asian market. Our big concern is the trend of raw materials prices in the Asia-Pacific area including Japan.”
“The outlook is definitely positive,” Mr. Cheng concluded. “With the 2008 Beijing Olympics around the corner and with emerging economies like Vietnam, there will be an upsurge in demand for all segments of the printing inks market. Packaging is expected to lead the growth in the Asian region.”

Flexible Packaging

Much like the ink market, the $45 billion flexible packaging market is presently broken up into even fairly portions between North America, Europe and Asia-Pacific, with the Asia-Pacific market growing fastest and likely to be the largest region by 2010.        
According to Paul Gaster, manager of flexible packaging for PCI Consulting, a UK-based consulting firm, Asia-Pacific accounts for $15 billion of the worldwide flexible packaging marketplace, and is growing at a 7 percent rate overall. China and India are exceeding that figure with 15 percent growth.
Mr. Gaster noted that the Asia-Pacific market leader in the flexible packaging segment is Australia-based Amcor, which accounts for approximately $300 million and is present in China, Singapore, and New Zealand as well as its home market. The company also owns the Leigh-Mardon packaging businesses in Singapore and Malaysia, which specialize in packaging gravure for tobacco.
Alcan Packaging is also active in the Asia-Pacific region, with an estimated $285 million in sales in the region. Alcan is present in 10 countries with 27 sites, with substantial operations in China, Indonesia, Philippines, Thailand and New Zealand. In addition, Alcan recently announced plans to build a new flexible packaging facility in Haridwar, Northern India that will supply the rapidly growing Indian food and personal care markets. That plant will open in the fourth quarter of 2007. That joins operations as diverse as tobacco packaging in Malaysia to flexible packaging for food and pharmaceutical packaging in China.
Other major converters in the region included Sealed Air Cryovac, which has operations in China, Japan, Australia, Malaysia and New Zealand; Huhtamaki, located in India, Vietnam, Thailand and New Zealand; and Aperio, strong in Australia and New Zealand. These three companies are thought to have annual sales between $150 million and $200 million within the region.
In Japan, five converters dominate the $4.5 billion market: DaiNippon Printing, Toyo Seikan Kaisha, Fujimori Kogyo, Toppan Printing and Maruto Sangyo.     In South Korea, Youl Chon Chemical and Lotte Aluminium are estimated to both have flexible packaging sales of approximately $125 million.
The flexible packaging market is fragmented in India, which is thought to have a market of $900 million. Mr. Gaster estimates there are roughly 600 flexible packaging converters, led by Flex Industries and Paper Products Ltd., which each have approximately $115 million in sales, and Positive Packaging, which has an estimated $90 million in sales.
This market is also an opportunity. Consider the food packaging market in India. “Only 1 to 2 percent of the food they produce in India is packaged at all, which gives you an idea of what the potential is for flexible packaging,” Mr. Gaster said.
“There is a huge market going on in China,” Mr. Gaster added. “It is chaotic, with so many companies producing flexible packaging – hundreds and hundreds, with many more starting up.”