An industry that had disappointing results in 2001 finds itself facing ever-tougher competition from overseas suppliers and is also having a difficult time getting desperately needed price increases. As a result, pressure is building on crucial areas such as R&D.
Sound familiar? It should. That description unfortunately fits the ink industry as well.
Alas, that description also matches the state of the pigment industry worldwide. All of the pressures that are being faced by ink companies are already being brought to bear on the pigment industry.
What happens to the pigment industry has a major bearing on ink manufacturers. Pigments account for the largest part of the cost of making ink, and the future fiscal health of pigment manufacturers will have an impact.
There are anecdotal stories of some pigment companies cutting back R&D efforts or, in extreme cases, looking to get out of the industry altogether. For just one example, PMC has abandoned its return to the alkali blue market in the face of overcapacity in the market, leaving the field to BASF, Clariant and Hindustan Inks & Resins. Less competition means higher prices and diminished choice, which affects the bottom line and production capabilities of customers.
Concerns about the competition coming from offshore pigments are also frequently mentioned. U.S. and European companies believe that the safety concerns and environmental regulations that are emphasized in the U.S. and Europe lead to higher costs, and are not required for producers of offshore pigments. Those costs add up.
Ultimately, it comes down to being able to produce a better quality product that is competitively priced. The hope continues to be that the economy will improve by the end of 2002, and the pigment and ink industries will be able to breath a sigh of relief as prices move forward.
Still, even if there is a break in the prices, there has to be a question about the the future of the pigment industry. Will R&D efforts be further diminished, with work being done on an incremental basis, rather than on major new approaches? Will consolidation further cut down the variety of products? Time alone will tell.
For ink manufacturers, these questions are definitely concerns that will define the ink industry for years to come.