Market Growth Forecast for UV/EB
According to the RadTech biennial survey North American Market Update, suppliers of ultraviolet (UV) and electron beam (EB) technology are optimistic about near term growth prospects. Pointing to the significant operational and “enabling” benefits of the process, survey respondents, including more than 80 industry suppliers and end users, project market growth of 6 percent to 9 percent each year over the next three years.
Respondents reported growth of UV and EB formulated product usage up more than 8 percent during the two year period 2000 and 2001, to just over 77,000 metric tons. During much of that period, the U.S. manufacturing sector was in decline until Sept. 11, when the U.S. economy fell into a broad recessionary climate. Survey respondents suggest that the moderation in growth of UV/EB from previous double-digit levels reflects overall weakening economic conditions, rather than any lessening in enthusiasm for the technology.
“There are a number of applications where UV/EB is establishing a foothold and industry penetration is expected to grow significantly,” explains James Reese of DSM Desotech, who is RadTech’s president. “Survey results point to a diverse list covering a wide range of techniques and substrates, including digital printing, rapid prototyping, adhesives, automotive and food packaging.” In total, survey respondents identify 23 distinct applications where they expect double-digit growth for the technology.
While these new areas are expected to help propel growth, most UV and EB usage is in already well-established applications. Survey respondents identify 14 industries where the share of UV or EB already accounts for between one-third to nearly 100 percent of industry processes – including fiber optics, the manufacture of CDs and DVDs, premium packaging, screen printing, tag and label, premium no wax flooring, automotive headlamps and composite wood fillers.
“Whether it is a well established operation or new application, ‘value’ is the key reason companies turn to UV or EB,” says David Diehl of PPG and incoming president of RadTech. “UV and EB are fast, automated processes that contribute to the bottom line by greatly increasing productivity, reducing scrap and waste and lowering inventories. While past surveys indicate that pollution prevention and environmental compliance issues had been motivators in the use of the technology, the current results spotlight ‘speed’ and process simplification as the driver for industry growth.”
As UV/EB continues to grow, suppliers are expanding their operations, new companies are entering the field and economies of scale have improved. This trend is reflected in the “top recent industry advances” reported by survey respondents, including lower costs and better materials.
The survey also asked about the most important limitations to adopting UV/EB technology, with most responses focusing on a basic theme – the industry still has a big job to do to educate potential customers. Suggestions for overcoming this hurdle include providing potential users better information about capital equipment cost justification for the process; data on “applied” costs, rather than just material costs of per gallon or pound (for formulations) and accurate information about how the health and safety characteristics of UV and EB generally compare favorably with traditional processes.
Survey respondents were asked to project applications that are now in their early stages of development and have the greatest probability of “widespread success” for UV/EB application by 2007. The top four responses include coatings for plastics, impactless printing (ink jet, digital printing), wide web flexo and pressure sensitive adhesives.
Low Profits Reflect a Tough Year
According to a Printing Industries of America (PIA) 2002 PIA Ratios Survey sponsored by Heidelberg, SAPPI and print Café, the average printer’s profit on sales declined to 1 percent over this past year, down from the 1.9 percent from the 1990-91 recession and the lowest in more than 30 years.
Profit leaders, those in the top 25 percent of profitability, averaged only 8 percent profit on sales, down from 2000’s figure of 10.5 percent and even lower than the 8.9 percent recorded during the 1990-91 recession.
Labels/wrappers and books were the most profitable printing sectors, according to the survey, with an average profit rate of 4.3 percent and 3.4 percent respectively. Forms/document printers and commercial/ advertising printers were the least profitable sectors, reporting profit rates of 0.9 percent and 0.4 percent respectively.
Even in light of these bleak numbers, there is some reason for optimism. Dr. Ron Davis, PIA’s chief economist, said, “Despite the tough economic climate in 2001, printers’ productivity increased as sales per factory employee increased from $158,188 to $162,054 in 2001. The worst appears to be over. Our surveys indicate that print markets are slowly returning to health so printers’ bottom lines should begin to improve soon.”