In order to succeed in the present market, suppliers need to know what their customers are seeking, and develop new products. Meanwhile, they also have to remain cost-conscious while looking forward to economic recovery and better days ahead.
It’s no secret that the price of many mainstream segments of printing inks has been relatively low during recent memory. In the last few years, the rapid increase in the price of crude oil cut margins for ink and raw material suppliers alike. Even though the price of crude oil has dropped significantly, the present economic downturn in the U.S., exacerbated by the terrorist attacks of Sept. 11, has hurt the printing industry heavily.
This, in turn, has forced ink manufacturers to further tighten their belts, seeking concessions from suppliers. This has led waxes, solvents and additives producers to look for ways to keep their own costs down.
“The tight market is pressuring the pricing of all waxes and additives,” said Marc Owens, business manger, varnishes and wax compounds at Lawter International. “While demand remains steady, these increasing price pressures are fostering Lawter’s focus on cost effective yet innovative solutions. Because of Lawter’s broad product base, varnish, resin, polymers for water-based inks, powdered waxes, wax compounds, and additives for paste, UV, and water-based inks as well as paste inks, customers can ‘bundle’ their purchases with the resulting cost savings passed directly to the customer.”
Even if prices hold steady, decreasing demand has hurt suppliers.
“So far, prices are stable, but the demand has slightly decreased in 2001,” said Pascal LeRoy, market and technical manager, polyamide fine powders at Atofina Chemicals, Inc.
“Consolidation and the slowdown in the economy have had a significant impact on demand and price for printing ink industries,” said Dr. Sat Nistala, Baker Petrolite’s imaging and coatings industry manager. “Major automobile companies and departmental stores are spending less advertisement dollars. This trend does have an impact on printing ink industries, especially on pub gravure. That directly correlates to a slow year for waxes that goes into printing inks.”
Dr. Nistala said that even high growth areas such as non-impact printing have been affected by the economy.
“Non-impact printing markets such as toner and ink jet are holding up to the situation,” Dr. Nistala said. “But the price war is already on between the majors, and any time these markets could behave like commodity markets. While I was window shopping in Wal-Mart, I noticed the HP bubble jet 632C printer (600x600 dpi for black and 600x300 dpi for color) on sale for $39.00. Three years ago I bought the same printer for more than double this price.”
The best way to secure business in tough times is to ensure that your products provide unique benefits to customers. If a company relies on price alone to differentiate its products, it takes a risk of making a commodity out of its goods, and having to further cut prices in order to keep business.
A company that has special products is in a much better position to grow. For example, Shamrock Technologies officials see a trend toward customized rheological formulations in wax compounds and dispersions.
“With the tighter market in 2001, most customers have become more price conscious and reluctant to change,” said Mr. Owens. “Lawter’s challenge is to deliver unique technology while maintaining economical pricing. This goal has been achieved with the introduction of our heatset polyethylene compound Stirinol100. 2002 will be a very exciting for Lawter as we examine new raw material streams available through the Eastman organization.”
“At Carroll Scientific we have made significant investments in our micronizing capabilities, enabling us to supply the wax or polymer in the most appropriate form,” said Chris Halvorsen, vehicle business manager at Carroll Scientific. “Many customers are gaining quality and efficiency by using dispersions rather than powders.”
“The trend is to get optimized properties while keeping the cost stable,” said Mr. LeRoy. “Those targets can be achieved by reformulating and trying new additives or resins, or new combinations of additives.”
“Printing ink companies are looking for low cost and innovative product lines,” said Dr. Nistala. “Wax additives that require less processing time are also desirable.”
“The usage of functionalized waxes that are compatible to the resins and colorants is getting popular,” said Dr. Nistala. “The best way to achieve excellent compatibility between resin and wax in the ink is to make a waxy-resin by chemical modification or graftingthe functionalized wax with resin. The waxy-resin works like a two-in-one raw material. In the last couple of years, this concept became very popular in toners and solid ink jet. At present we are meeting the growing needs of graphic arts and coatings industry through a unique polymerization process which produces a family of low molecular weight polyethylenes and derivatives. We have homopolymers, copolymers, alcohols, acids, maleates and oxidized waxes in our toolbox to meet the future trends.”
“The trend continues to be in the area of consolidation, to get maximum utilization out of fewer raw materials,” said Mr. Halvorsen. “Striving towards new formulary technology, customers are more aware of polymer and wax chemistry, allowing them to select specific polymers for a given application. Polymer and wax selection is critical toward meeting end use performance properties.”
One area that is always critical is working closely with customers. In times where ink manufacturers are working to develop products that will differentiate them in the eyes of printers, the expertise of suppliers becomes that much more critical. For example, Shamrock officials believe there is likely to be more supplier partnering with customer technical groups on new product development.
“As far as service, faster response and knowledgeable sales staff will be considered a plus,” Dr. Nistala said.
“Large ink companies require a high level of service in terms of supply, while the smaller ones look for more product development support, and help with formulations,” Mr. LeRoy said.
Above all, ink companies are always on the lookout for new technologies.
“There is lot of research activity in printing ink industry, and every day, fresh ideas are constantly being tested in the research labs,” Dr. Nistala concluded. “Some fresh ideas turn into novel products such as single fluid inks, hot melt gravure inks and electrocoagulative inks. I think additives suppliers who want to be serious players in printing ink industry will have to understand the future needs of the ink industry and offer customized solutions to that need.”
“Ink companies continue to look for new and different approaches to wax compound and additive products,” said Mr. Owens. “To this end, Lawter is working closely with customers to design tailor-made compounds and additives that will meet or exceed their needs. Because of the small amount of wax or additive used in an ink system, when compared to the effect that these products can have, quality and supply is a must. A technically superior product offers many advantages to the overall ink formulation. These new advancements will continue to drive the market.”
That need for new products for printing inks will continue to be a major force in the waxes, solvents and additives markets in the future.