The global availability of raw materials for printing inks continues to be a major concern. With little or no clear outlook as to the length of shortages, availability and price escalations are likely to continue throughout raw material suppliers.
Following the economic downturn in 2008, many raw material suppliers reduced operating capacity and personnel. In some instances, suppliers permanently shut down plants to accommodate the economic downturn. Inventories were reduced dramatically over 2009.
Due to the increase in demand at the end of 2009 and early 2010, many industries were not positioned to adequately supply and service their customers. In addition, many suppliers were not sufficiently convinced of the sustainability of the increases, and have consequently hesitated in restarting previously idled production capacity.
Compounding the problem, numerous cases of force majeure, closures due to environmental reasons and labor strikes exacerbated an already tight market which has led to serious reductions in supply and product allocations.
In spite of continued efforts to minimize the effects these supply chain challenges have placed on the ink industry, Siegwerk is forced to announce a 5% to 7% price increase on all energy curable inks sold in the U.S. and Canada effective Sept. 1, 2010.
The prices of many types of raw materials have been increased – ranging from 10 to 40% for pigments, 10 to 150% for resins, 5 to 10% for additives and 15 to 30% for solvents. While Siegwerk has worked to mitigate the effects of such large price increases on its customer base by focusing on cost reductions and process improvements, Siegwerk is no longer able to withhold the effects from its customers.
“Siegwerk greatly appreciates its customers’ continued business and patience during these challenging times,” said Jim Ross, president of Siegwerk USA and Canada. “Siegwerk is committed to being a world-class ink supplier and is doing everything possible to work through this global and regional shortage of raw materials while continuing to supply a consistent, quality product coupled with value-added services.”