The Annual State of the Industry Report, the result of industry surveys conducted by NAPIM, have reflected the challenges faced by ink manufacturers in recent years. The 2013 State of the Industry report, presently by Braden Sutphin CEO Jim Leitch, was a little more upbeat, as results from the ink manufacturers who responded showed improvement over 2012.
“The results are much improved over past years,” Leitch noted.
Leitch reported that the overall gross domestic products in the U.S. grew 1.9% in 2013, down from 2.8% in 2012. “The end of the recession doesn’t mean all is well,” Leitch added. “It just means that contraction has stopped.”
In terms of ink, NAPIM reported that there was $3.1 billion in ink sales in 2013, with 1.4 billion pounds of ink sold, not including screen, textile, digital or non-impact inks. This represented slight growth from 2012.
In terms of specific types of ink, litho inks again suffered a decline, with sales falling 2.3%. In terms of pounds, litho no heat inks declined 7.9%, while sheetfed inks increased 3.4% in terms of pounds.
Packaging inks were more positive, with all three segments – flexo solvent-based and water-based inks and gravure solvent-based inks showing growth. Overall, NAPIM estimates that more than $1 billion in liquid packaging inks were sold in 2013, a growth of 1.3%.
Leitch also reported that profitability was up for 2013, with earnings before interest and taxes (EBIT) increasing to 3.2% from 1.2% in 2012 and 0.4% in 2011.
“Profitability is much improved,” Leitch concluded.
Following the State of the Industry report, Jan Paul van der Velde, senior vice president, procurement, sustainability, IT and regulatory for Flint Group, offered his annual insights on the state of raw materials.
“The raw material market in 2013 was probably the most ‘steady’ year since 2007, albeit at a high price level compared to long-term averages,” said van der Velde. “The market is also volatile at short notice.
“While there was a light decline in material costs, these were not sufficient enough to allow ink producers and raw material manufacturers to make up what they have lost,” he added.
In particular, van der Velde noted that crude oil, gum rosin, read ad blue pigments and phenolics are some of the areas that bear watching closely.
“I don’t think this will be a major change year,” van der Velde concluded. “Industry seems to accept higher price levels as the new norm. The long-term outlook remains challenging.”