The Publication Ink Report

By David Savastano, Ink World Editor | 10.24.05

The publication ink market has made slight gains during the past year as advertising has picked up.

Impression counts continue to increase for catalogs.
The publication ink industry has been hard hit in recent years, with major declines in the heatset market and double-digit declines in volume and sales in publication gravure. Of particular concern has been that price has been declining faster than volume, indicating that price erosion has been ongoing.

For the first six months of 2004, the ink industry has been receiving better news in some segments, while other markets remain troubling. Overall, the National Association of Printing Ink Manufacturers (NAPIM) reports that volume has increased 1.2 percent year to date, while sales have risen 2.4 percent.

The good news comes from the news ink market. According to NAPIM, the volume of news ink sold has increased 2.9 percent year to date, with sales rising 6.6 percent.

Unfortunately, heatset hasn’t shared in that good fortune. While volume rose 2.7 percent during the first six months of 2004, sales dropped 1.6 percent. Publication gravure continues to decline.

All things considered, the fact that volume is up overall for the first time since 1999 is good news for the ink industry, but the continuing price erosion remains a major concern.

U.S. and International Markets
The U.S. publication market has shown some signs of strengthening so far in 2004. Magazine ad lineage has improved slightly year-over-year, but is not back to levels seen in 2000. Book printing also has shown some improvement, while directories are being challenged by Internet offerings. Newspaper inserts show some continued strength.

“All publication segments are facing stiff competition from new and developing media,” said Mark Levin, corporate vice president, Sun Chemical North American publication inks. “In addition, despite some consolidation, the printing industry still has overcapacity, and the competition among printers for business is fierce. This has led to a profitability squeeze for printers and their suppliers, especially as prices for many raw materials are increasing.”

“Although growth has not been as great as anticipated, the publication market has been growing steadily,” said Susan Kuchta, vice president, Flint Ink’s North America publication division. “We are seeing the greatest growth from publication heatset web applications.”

Advertising gains are key to this growth.

“Advertising spending continues to post increases this year, which has positively affected print media in general,” Ms. Kuchta said. “The summer Olympics and 2004 elections have contributed to greater advertising and higher page counts in the magazine sector. Additionally, we are seeing new-entry celebrity magazines, such as Warner Media’s Us Weekly and Bauer Publications’ In Touch.”

Outside of the U.S.. the publishing industry hasn’t made huge gains.

“These markets have been flat in publication gravure and in web offset,” Dr. Nonn said. “In Asia there is no publication gravure except in Japan, but this is a very small market.”
There are indications that some U.S. publication printing may be moving overseas. Sun Chemical officials said that printers in Asia and South America increasingly are finding market niches in the U.S., especially in such printed products as books and calendars.

“We are seeing a trend of print production moving outside the U.S. for non-time-sensitive materials and production that requires significant handling,” Ms. Kuchta said. “This has been especially apparent in the book market.”

Publication Gravure
Publication gravure remains a challenging market. At best, publication gravure is maintaining the status quo, Mr. Levin said. “While only three North American printers continue to use gravure, it remains a large and substantial portion of their business,” he said. “They are beginning to retire some older presses while gaining productivity of their newer, larger presses.” However, other factors seem to be weighing against gravure, including the perception that other printing processes can match its quality at lower cost.

“Growth for the publication gravure market has been flat,” Ms. Kuchta said. “The trend towards lower basis weight papers continues. Publishers and/or advertisers are leading the push towards this, in an effort to reduce overall postage and shipping costs.”

Siegwerk Group, a worldwide leader in publication gravure inks, hasn’t seen much growth in the market.

“Based on Siegwerk's participation in and exposure to this market, we have witnessed zero growth in 2004,” said Dr. Ansgar Nonn, president of the business unit print media of the Siegwerk Group and member of the company’s international management board.

Marketers also are looking to target their audiences, Mr. Levin said, which means shorter press runs where heatset offset has some advantages, and personalization afforded by other processes such as digital printing. Suppliers continue to work on sleeves and other methods to engrave cylinders that can reduce the cost of printing gravure, so it can remain competitive, he said.

Newspapers, Catalogs and Magazines
As noted before, the news ink side has rebounded somewhat in 2004. According to the Newspaper Association of America (NAA), advertising expenditures increased 3.46 percent and 4.1 percent during the first and second quarters of 2004, respectively.

“The news ink segment is rebounding slowly due to a slow recovery that is beginning in advertising spending,” said Mike Green, vice president, North America news ink division at Flint Ink. “Newspapers are striving to achieve higher quality standards in order to remain competitive for future advertising revenue, which is the life-blood of this industry. Additionally, newspapers are refining operations to improve pressroom efficiencies, and adding more commercial work where possible.

“Newsprint consumption, which is a good indicator of how the newspaper industry is doing, has declined somewhat during 2004,” said Todd Wheeler, marketing services manager, US Ink. He added that the continuing increase in process color usage among newspapers benefits the news ink suppliers.

The catalog and magazine industries continue to be affected by the economy. “In Europe and NAFTA countries, the markets are down by 2 percent,” Dr. Nonn said.

“Growth in the catalog and magazine industries has been steady,” Ms. Kuchta said. “Impression counts are slowly increasing, but magazines are still challenged by other communication media.”

Advertising measurement services report slight growth in ad pages, and somewhat larger growth in revenues as publishers raise advertising rates. Through the first half of the year, the Publishers Information Bureau recently reported that YTD ad pages in magazines were up 0.5 percent over 2003, while publishers’ ad revenues were up 7.3 percent in the same time period.

“It appears that printers and their suppliers thus far have not been able to pass on their rising costs to the publishers due to the intensely competitive nature of the market,” Mr. Levin said.

Many catalog companies have dropped or reduced large catalogs in favor of targeted catalogs that can be personalized to meet the interests of individual customers.

“Some retailers who tried to move from print to on-line catalogs have found they need to cross marketing in both areas to keep consumer interest and sales high,” Mr. Levin said.

Meanwhile, flexo has yet to make a dent in the publication market. Some newspapers continue to purchase flexographic presses, Mr. Levin said, but the process is not seeing the same type of growth in publications that it has in the packaging converting market. “The print quality just doesn’t match heatset or gravure for publication printing, while platemaking time, cost and quality continue to be concerns,” he said.

“No significant inroads are being made in flexo,” Ms. Kuchta said. “Production efficiencies just are not there for the longer runs common to most publication work.”

Ms. Kuchta noted other trends in the industry, such as the use of lower basis weight papers and new fulfillment services.

“The trend towards lower basis weight papers continues across the board in the publication market,” Ms. Kuchta said. “In addition, many larger printers are providing specific fulfillment services designed to aid their customers in realizing the best shipping and postage rates possible. Some examples are Quad/Graphics’ Parcel Direct and RR Donnelley’s distribution Optimizer service.”

New Technologies
To meet the more stringent demands of printers, ink companies have developed a wide variety of new products.

“Siegwerk Inc. is in the process of developing a new color set for the U.S. market, which would eliminate complexity caused by the duality of coated and uncoated inks,” Dr. Nonn said.

On the publication gravure side, Siegwerk has developed new varnishes to improve performance for customers.

“Siegwerk offers individually developed special extender varnishes to customers,” Dr. Nonn said. “This is an all-around high-quality product which reliably supports all print jobs. Tailor made to the specific requirements and the order structure of the respective printing house, they combine the need for high quality with optimal cost-effectiveness.”

Handschy Industries manufactures several product lines that serve the publication printing industry. The Heatset Low Tack Series is ideal for printing on lightweight substrates such as flyers and inserts. This series offers excellent transfer properties and has very low misting.

Heatset Cleargloss Series is ideal for higher basis weight papers. Cleargloss Series are used for printing brochures, annual reports, direct mail and speciality labels. It is also FDA compliant. The Heatset Top Dri Series delivers properties in the finishing of specifically printed products beyond typical specifications. Excellent rub resistance and high gloss levels make this series a must for demanding end use requirements.

Heatset Sterling Series provides excellent print quality, brilliant color and high gloss. It is ideal for high speed presses and can be used on a wide variety of substrates.

Arrowlith UV, a new ink system developed by Flint Ink, helps coldset web printers expand their business opportunities into work on coated or semi-coated stocks.

“This new capability allows coldset printers to produce materials traditionally handled by other segments of the printing industry, increasing both revenue and profitability of coldset printers,” Mr. Green said.

The Future
The publication market remains a highly competitive field, with overcapacity hindering printers’ chances of rainsing prices to their customers. That, in turn, impacts ink manufacturers.

Still, with the economy seemingly having turned a corner and ad revenues increasing, ink companies are hopeful that the market will finally see signifiucant improvement the near future.

Stochastic Screening Shows Promise

Valued for its near-photographic quality, stochastic screening has become one of the brightest spots in publication printing. While it is not a new technology, its usage has grown in recent years, and ink manufacturers are working to meet new demand.

“Stochastic and its imitation screening has been around for 20 years,” said Robert J. Ruggieri, senior offset technical service representative for INX International Ink Company. “During the film age, producing this type of screening was difficult both prepress and on press, so printers were reluctant to offer this technology. Also, this technology was patented by a printer, which forced other printers to pay a fee just to use it. Printers were then passing an up charge to their customers. The up charge for most customers did not justify the printing they were receiving as anything earth shattering. So for years, this technology was made available mainly in the sheetfed market or for customers who agreed to an up charge. The attraction of stochastic screening first and second order was to eliminate the rosette pattern producing a continuous tone reproduction. This is achieved by increasing the resolution and by frequent modulation of dot reproduction.

“During the last four years, there has been a renewed interest in stochastic screening for several reasons,” Mr. Ruggieri said. “First, with the introduction of computer to plate imaging, it has made this process much easier to achieve, especially in plate making. Second, this technology is not patent protected anymore. Third, the cost for the software is now included with most plate setters. Fourth, customer are still looking for a niche with the products they produce. Fifth, continuous tone effect printing (stochastic) is still a very desirable look.

“There are some disadvantages of printing with stochastic screening,” Mr. Ruggieri said. “Because of pushing the envelope in printing, press crews find it more difficult to control print reproduction. Higher resolution screening requires less of an ink and water window, ink emulsification. Blanket piling increases with this type of screening. Customers are demanding that web printers resort to this type of screening, which really challenges the printing process. Sheetfed printers have a little more control than web printers. Printing with stochastic screening requires plate curves in order to be successful. Because of this, printers shy away of promoting this technology, unless they are confident in their plate curve writing. Minor adjustments to ink and or fountain solution are necessary to be more successful.

“The end result is a smoother gradation of the gray scale, no rosette pattern, and in some cases cleaner colors,” Mr. Ruggieri concluded. “I believe there will still be a demand for stochastic screening for the reasons explained above.”

“We estimate that approximately 40 percent to 50 percent of retail/FSI (free standing insert) advertisers are either considering or have already made the move to stochastic screening,” Ms. Kuchta said. “Flint Ink offers several special ink sets for our customers who have moved to stochastic screening.”

Mr. Levin said that the use of stochastic screening continues to grow.

“Two key factors in the increased usage of stochastic are improved hybrid screening technology and wider use of computer-to-plate technology,” Mr. Levin said. “Printers who have begun work with frequency modulated screening, now want to take their printing to even higher levels. Sun Chemical recognizes this, and we have begun developing specialized inks that can hold the stochastic microdot. To completely optimize stochastic screening, we also are working with our new division, Rycoline, to develop founts and blankets that can be paired with the stochastic inks for remarkable printing results.”