The price increases for packaging inks ranges from 5 to 8 percent for water-based inks and 7 to 12 percent for solvent-based inks. The News Ink Division will apply a price increase of 8% to coldset colored inks and 11% to coldset black products. Flint-Schmidt/ XSYS Print Solutions will increase prices for inks in Publication (heatset and publication gravure) across Europe by a range of 7.5 percent to 10 percent.
These increases will be effective from Jan. 1, 2006, or as contract term allows.
The packaging ink industry has come under severe pressure from the dramatically rising costs of energy and raw materials. The price of some critical raw materials have doubled over the past few years and ink companies are also experiencing shortages in key areas. The industry is faced with high prices, especially for solvents such as ethyl acetate, MEK, ethanol and ethoxypropanol, as well as titanium dioxide. This price increase is driven by the need to remain competitive and meet customer needs over the long term.
“The high prices of crude oil and natural gas are the key drivers for price increases in ethylene and propylene which are the main basis for the raw materials in our products,” said Doug Aldred, vice president and general manager, Packaging Inks Division. “We have so far tried to absorb these increases through intensive cost management and significant improvements in operating efficiencies. However the extent of the increases in key raw materials over the past few months has intensified, and we now find ourselves in an unsustainable position where we must pass price increases on to our customers. We have taken this difficult, but necessary step to ensure that we remain a viable and sustainable supplier to the industry.”
The introduction of the price increase for news inks is necessary in view of the unprecedented rise in raw materials, driven by crude oil.
“During 2005, we as an industry have faced dramatic price increases across all key raw materials by as much as 70 percent over 2004,” said Tony Lord, vice president, general manager, News Inks Division. “We have attempted to absorb these increases through intensive cost and management efficiencies. However ,the escalation in raw material prices coupled with shortages in key areas has created an unsustainable position. If we are to remain as a viable supplier to the news industry, we have no choice other than to seek support from our customer base by passing these price increases through the value chain.”
The increases in publication inks have also been driven by dramatic increases in energy and raw material costs. The costs of some raw materials
have doubled over the last year, and the industry is faced with high prices for resins, pigments, solvents and oil.
“This year, we have been faced with an historically unprecedented rise in all our costs which was totally unexpected,” said Wolfgang Blumschein, vice president and general manager, Publication Division. “We are currently receiving double-digit price increases for the vast majority of our raw materials, with some up by 50 percent over last year. We have so far tried to absorb these increases, in particular through intensive cost management and greater efficiency. However, the extent of the increase in costs, which over the previous weeks has intensified, is now obliging us to pass on price increases to our customers.”