The pigment industry has seen plenty of consolidation in recent years, whether it is their customers, its suppliers or the pigment industry itself. Speaking with pigment industry leaders, consolidation will continue to be a fact of life.
“Consolidation is evident across all major industries, so it is only natural that it is a growing trend within the pigments and ink raw materials sector,” said Mehran Yazdani, vice president, marketing, Performance Pigments, Sun Chemical. “Sun Chemical’s customer base has joined the consolidation effort and many have begun to become global participants in the ink market. Sun Chemical has acted in accordance with this trend and has made its own strategic acquisitions and formed strategic alliances to provide our customer base with a global footprint to support their growing demand.”
Don McBride, COO of Heucotech, Ltd. (a Heubach Company), said that consolidation is a continuing reality in both the pigment and ink industries.
“Accurate forecasting and material planning remains essential to ongoing customer satisfaction, as traditional pipelines continue to lengthen on many key raw materials,” said McBride. “Heubach has made the strategic decision to carry extra inventory on key raw materials as well as finished pigments and preparations.”
“In some select areas, consolidation is having an impact,” John Erbeck, Emerald Specialties product manager - graphic arts, said. “We have seen tightening supplies in some areas as a result of consolidation of suppliers as well as product rationalization in the offset ink area, as those suppliers seek to streamline their operation and improve turnover of inventory to improve profitability.”
“Overall consolidation is perhaps a lesser theme than a few years ago,” said Neil Forsythe, sales manager, Printing, Packaging & Adhesives, Dispersions & Pigments Division, North America for BASF Corporation. “In 2013 BASF announced some changes to our portfolio and production network. We consider that we are now well placed for the future.”
Andy Grabacki, vice president of sales for General Press Colors, noted that consolidation has had some impact on the availability of high performance pigments.
“It hasn’t been much of an issue regarding customers not as much as the decline in the printing industry in general,” Grabacki added.
“Consolidation is a major trend being driven by tighter regulatory and customer requirements coupled with the highly competitive nature of the global pigment market,” said Frank Lavieri, executive vice president and general manager, Lansco Colors. “Pigment buyers who have experienced past supply disruptions are more discerning than in years past and are doing more due diligence. Lansco Colors welcomes this scrutiny and is a major beneficiary as the legacy pigment manufactures which once had patent protected monopolies become less important.”
“There is always a concern about the future changes in the availability of raw materials due to the consolidation in the number of suppliers, product offerings and manufacturing sites,” said Vashti Jagmohan, product/marketing communications manager at ECKART America. “However, there has not been much impact within the metallic industry in the past few years.”
“Continued consolidation is having an effect on marketing strategies as each supplier continues to fight for their share of the pie,” said Ron Levi of New Brook International. “This leads to price/margin erosion which may drive some suppliers out of the market. The larger the company, the less the tolerance for lower margins/netbacks is. The same can be said for the ink suppliers.”
Bill Gray, vice president and business manager for Sincol USA, said that a natural byproduct of stricter enforcement of environmental regulations trend will be a reduction in number of pigment producers worldwide.
“These same environmental forces are reducing the number of manufactures of key raw materials to all pigment suppliers around the world,” Gray added. “Sincol is well positioned to meet these challenges and remain focused and committed to meeting the changing supply line and marketplace needs.”
“We believe further consolidation is still to come,” said Li Wu, co-owner and technical director, Trust Chem China. “As competition increases, companies are consolidating to strengthen their market position. These changes impact suppliers of pigments and other raw materials. Consolidated companies will have more purchasing power to tighten demands on their suppliers.”