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    Features

    Mexico's Ink Industry Anticipates Growth in 2003

    Growth in the Mexican market for all segments of printing inks should rise from an estimated value of $150 million in 2002 by about 3 percent in 2003

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    Charles Thurston, Ink World Correspondent10.14.09
    Growth in the Mexican market for all segments of printing inks should rise from an estimated value of $150 million in 2002 by about 3 percent in 2003, keeping pace with the rise in gross domestic product, industry officials say. While this recovery is expected to be strong, it will still be shadowed by the 6.6 percent rate that the economy expanded in 2000.

    “The Mexican market runs pretty much like the U.S. market; theeconomy is struggling, and the printing business was down to about 1.5 percent growth in 2002,” said Brad Bergey, vice president, operational support at Sun Chemical Ink (GPI), Northlake, IL. “Overall growth in 2003 could be 3 percent, depending on a lot of factors, including the way that the Mexican economy is tied to the American economy.”

    The market growth in Mexico is being driven in part by new investments by major customers in key segments.

    “Seven or eight years ago there was virtually no presence of foreign (client) printing companies in the Mexican market; but then Donnelley came in, followed by Transcontinental,” says Enrique Perez Cirera, general manager of Sun Chemical in Mexico City. “We are seeing more printing of Mexico distributed products being printed in Mexico versus in the past being printed in the U.S., including the phone books for Telmex, which are now being printed at Quebecor in Mexico.”

    The investments encompass a variety of business segments, observed Mr. Bergey. “What we are seeing is a lot of major companies making investments in Mexico in offset printing and also in packaging,” he said.

    Mr. Perez said that joint ventures or acquisitions are paving the way for wholly-owned stakes among ink customers.

    “The way these companies have come into the market has been through buying into local companies,” he said. “So the trans-border consolidation will continue.”

    Transcontinental Group bought Editorial Offset in May 2002, and then in October acquired the final one-third equity interest in its now wholly-owned subsidiary Impresora Transcontinental de Mexico, which has made the group the largest commercial printer in the country. On consummating the deal, Remi Marcoux, CEO of Transcontinental Group, said, “Mexico is a market with strong growth potential that has been identified as key to Transcontinental’s development strategy.”

    As global ink suppliers follow their customers’ investments in Mexico, the relative share of the Mexican ink market controlled by domestic companies also is shrinking. “If you look at heatset printers, 50 percent to 70 percent of the market is already in foreign hands,” said Mr. Perez. “And Sun now has a substantial percentage of that market.”

    Last year, a fire destroyed Sun’s warehouse and its entire inventory in Mexico City. “Because of our association with the U.S. and our other locations, we were able to supply all our customers and not miss a beat,” said Mr. Bergey. “Now we have reinvested in the warehouse and are committed to grow in Mexico.”

    Mr. Bergey said that Sun increasingly is providing technical assistance to customers in Mexico. Energy curing, flexography and heatset technology is in great demand in Mexico, which imports inks from all over the world. Mr. Perez noted that Mexican ink imports from Europe are following equipment imports.

    “There are a lot of printers in Mexico looking to Europe for equipment, more so than from the U.S.,” said Mr. Perez. “ISO certification is a must now, and many companies are achieving Six Sigma.”
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