Commercial sheetfed printers have faced difficult times in recent years. The market has been impacted by the recession, which took its toll on advertising, as well as the Internet. As a result, consolidation and plant closures have further eroded the sheetfed printing market. Meanwhile, the sheetfed packaging side has been relatively better, as folding carton remains strong.
There has been some good news, as sheetfed ink manufacturers said that the economic recovery is generally helping their customers.
“All in all, 2010 proved to be a better year than 2009 despite sluggish market conditions,” said John Copeland, division president, Printing Ink Division, Toyo Ink America, LLC. “The ink market was steady and stable for most of the year. For Toyo, this resulted in steady ink sales with no huge gains or losses. One bright area has been UV inks for printing on plastic and paper stocks, and we expect this growth trend to continue into 2011.”
“The commercial market was clearly hit harder than other print markets as the recession lingered in 2010,” said Richard Czarnecki, senior vice president chief technical officer for Superior Printing Ink. “While some of our customers are thriving and finding ways to stabilize and even grow their business, there are many others who are simply struggling to survive. We are aligning ourselves wherever possible with customers who are going to be successful as the economy continues to improve in 2011.”
“The market continued to shrink but at a much slower and more manageable rate compared to the last few years,” Charles Sagert, vice president of sales for INX International Ink Co., said. “Gross sales remain stable, but value-added sales in the commercial market remain very soft.”
“On a comparable basis, 2010 was an improvement over 2009, although continued improvement is needed in these print markets,” said Jim Leitch, Braden Sutphin Ink’s CEO.
John Toigo, president of Grand Rapids Printing Ink, including subsidiaries Ohio Valley Inks and Columbus Printing Ink, said his region appears to have become more steady for printers.
“Between Michigan, Kentucky, Ohio and Indiana, printers seem to have for the most part stabilized, although there isn’t a backlog of work,” said Mr. Toigo, who is also president of Print Suppliers Group, a consortium of regional ink manufacturers.
“Some of our customers are pretty busy while others have very little to print,” said Bryan Gobbell, president of Bowers Ink. “I think people in the printing and ink industries are still in survival mode and will be through the rest of this year.”
Mr. Toigo noted that some larger ink companies have cut back on service for their sheetfed customers, and smaller companies are able to fill the void.
“It’s harder for the larger companies to provide cost-effective service,” Mr. Toigo said. “Regional ink companies provide service and high quality ink, and are picking up the pieces.”
Consolidation has had an impact on the sheetfed printing industry.
“We have seen a number of closings during the past couple of years,” Mr. Leitch said. “The economy has been tough on printing. In terms of mergers, we have seen more mid-size companies merging to avoid closing all together. “
“We saw more printing businesses merging or folding in 2010,” Mr. Copeland added.
The Folding Carton Market
The folding carton business has been a bright spot for sheetfed ink suppliers, as some forms of packaging, such as food packaging, tends to be more resistant to economic downturns.
“The packaging sheetfed market has fared better than commercial for the past few years now,” Mr. Copeland said. “Since the economic meltdown in 2008, we saw dramatic volume declines in commercial printing while the packaging segment has exhibited slight to moderate growth. We expect to see similar moderate growth in 2011.”
“There is no question that the ongoing success of our business will rely on a strong presence in the packaging market,” Mr. Czarnecki said. “While the commercial sheetfed market is not going away any time soon, it is clear that packaging is a significantly more robust and ‘recession-proof’ segment of the industry.”
“Packaging in general continues to explode, and in some cases, is taking commercial printers along for the ride,” Mr. Sagert said.
“There currently is a high demand for specialized packaging, and many commercial printers have the capabilities and expertise to satisfy that market. We believe diverse packaging will continue to grow as marketing firms and packaging designers are devoting a larger percentage of their advertising budgets to high end packaging.”
“The packaging market has been stronger than the commercial side during the past year,” Mr. Leitch said. “These customers have been steadier from month to month.”
“The packaging side is busier, probably because people are staying home and cooking rather than going out,” Mr. Gobbell said.
Expectations for 2011
Ink manufacturers said that they can see the potential for improvement for sheetfed printing in 2011, but it will still be a challenging market.
“The outlook for 2011 is tough,” Mr. Copeland said. “We expect to see some growth in commercial sales, but it will be at a very low rate. The commercial printing segment is working to reinvent itself as it deals with pressures to coexist with electronic media and integrate cross-media communication services into their product offerings. Improvements will need to be made in how we market and deliver the value of print to end-users.”
“Superior still provides the best overall combination of service, quality, performance and value to the commercial sheetfed market and, although this segment is flat to declining, we will continue to be a major supplier to North American commercial printers,” Mr. Czarnecki said.
“I think 2011 will be a repeat of 2010, with slightly greater stability and predictability,” Mr. Sagert said. “The line between commercial litho and digital will continue to blur as the demand for personalization and one-to-one marketing continues to replace historical print requirements.”
“We look for the commercial printing and ink market to improve slightly during the first part of 2011 and then get stronger as the year goes on,” Mr. Leitch said. “Beyond 2011 is largely going to depend on the overall economy – a stronger economy will lead to a strong commercial print market.”
“It’s not going to get back to the way it was 15 or 20 years ago, but printers are starting to look forward and plan ahead,” Mr. Toigo concluded. “I think it still comes back to the fact that everyone needs to look out for each other and help each other.”