Top Companies Report

5. Siegwerk


5. Siegwerk
Alfred-Keller-Strasse 55
53721 Siegburg, Germany
Phone: +49 2241-3040
Fax: +49 2241-304777

Sales: $1.16 billion (€874 million).

Major Products: Provider of solvent-based, water-based, energy curable and specialty liquid inks and coatings and related point-of-use services for the packaging and label industries. Product applications include flexible packaging, narrow web labels, tobacco and folding carton using flexographic, rotogravure and offset printing.

Key Personnel: Herbert Forker, CEO; Oliver Wittmann, CFO; Ralf Hildenbrand, president, Asia region; Dr. Ansgar Nonn, president, NAFTA region; Hugo Noordhoek Hegt, president, packaging EMEA; Pierre-Antoine Noirot, vice president, global innovation network (GIN); Christoph Thuenemann, director corporate communications.

Number of Employees: 4,400 in more than 30 country organizations.

Comments: Siegwerk had a very successful year in 2010, with sales growing 14% to €874 million ($1.16 billion) and adding Environmental Inks and Coatings (EIC), a U.S.-based label and narrow web specialist, to its fold. Meanwhile, the company is celebrating its 100th anniversary of the “Siegwerk” brand this year.

On Nov. 30, 2010, Siegwerk finalized the acquisition of EIC, one of the largest ink suppliers to the narrow web label market in the U.S. and Canada. The newly formed organization operates as “Environmental Inks – a member of the Siegwerk group.”

EIC had sales of approximately $40 million in 2009. It operates entities in the U.S. and Canada and employs 170 people. EIC is the market leader in the narrow web segment in the U.S., serving the packaging and label manufacturing industries with water-based and energy curable inks and coatings.

“EIC’s strengths complement our product portfolio and our strategy to provide sustainable solutions,” said Siegwerk CEO Herbert Forker. “Over the past decades, EIC has built a strong reputation for environmentally friendly water-based inks for the growing and demanding narrow web segment.”

The acquisition of EIC is in line with a clear strategy Siegwerk has defined for its North American business portfolio.

“Like Siegwerk, EIC is known for consistently high quality, reliable technical sales representatives and exceptional individual service, especially in water-based technology,” explained Mr. Forker. “EIC is well positioned to capitalize on excellent growth prospects, particularly in the segment of self-adhesive labels. EIC is the ideal match between Siegwerk’s strategic needs and the existing competencies in the group.”

Today, a large portion of Siegwerk USA’s market share involves flexible packaging customers operating wide web printing presses. Almost 80% of 2009 revenues were realized in this customer segment, which is dominated by solvent-based ink technology. Together with Siegwerk’s recognized competencies in UV-based inks, the combined businesses will be the market leader in narrow web labels, offering state-of-the-art solutions across the whole technology spectrum.

During the past few years, higher raw materials costs have been a major concern for ink manufacturers, and the past year accelerated these problems as availability of key raw materials becomes a serious issue.

“Higher raw material prices have such a big impact on our business that we have to pass on some of these costs to our customers,” Mr. Forker noted. “We work hard to offset as much of the additional cost as we reasonably can; productivity programs, search for cheaper raw material solutions, purchasing efforts and efficiency measures from last year are continued.

“The situation has not eased in the first half of 2011, and recent supplier announcements resulted in further price increases and continued tightness on the supply side,” Mr. Forker added.

Worldwide capacity reductions and new levels of HSE responsibility and sustainability have led to a smaller supply base for defined raw materials and feedstock products. In combination with increasing worldwide demand, this has resulted in a significant and continued inflationary environment for raw materials and continued shortages in 2011. These developments resulted in dramatic volatility of raw material prices, which have to be reflected in more flexible pricing models and shorter contract terms. Existing contracts and agreements are being reviewed case by case.

For example, prices have risen for materials like pigments, e.g. violet 23, by more than 100% because of a force majeure situation, and gum rosin and polyamide resins have risen by more than 70%. Titanium dioxide prices have increased more than 25% compared to last year.

Meanwhile, nitrocellulose and other binders, as well as energy, will continue to become more expensive. These increases shall be covered by temporary, flexible, and, where available, index-based surcharges.

“We will not compromise on product safety. Siegwerk will maintain its position as a quality supplier guaranteeing the highest standards,” Mr. Forker continued. “We will continue to invest in those areas that make us a reliable partner for the entire packaging and publication industry and support our customers with consistent, quality products coupled with value-added services.”

In 2011, Siegwerk celebrates the 100th anniversary of the Siegwerk brand. The group and its predecessor organizations date back to 1830 in textile printing. While the vast majority of printing houses produced their own inks, Siegwerk was one of the first companies to market the inks that it had developed for its own use to external customers. The decision to specialize in ink production marks the true birth of the “Siegwerk” brand.

This anniversary is celebrated in each of Siegwerk’s more than 30 country organizations with family events. In some locations, so-called INKdays – interactive workshops around the world of printing – are held for Siegwerk’s customers and partners.

“The recent event at our headquarters in Siegburg was a great success, as 300 participants experienced future oriented topics and interesting discussions,” said Mr. Forker.

“As a family-owned company, we take a long-term view, and are devoted to outstanding performance, the satisfaction of our customers and the well-being of our employees,” Mr. Forker concluded. “Over the last century, these values have grown into a strong tradition – one that will endure. With all our experience, knowledge and passion, we are well prepared for the future, and will continue to shape the world of inks. Because one thing is certain: at Siegwerk, tradition has a future and the future is our tradition.”