Digital Markets Explosive Growth is Leading to More OEMs, Ink Alliances

By Sean Milmo, Ink World European Editor | 10.25.05

To meet demand for greater ink variety, digital equipment manufacturers are working more closely with more ink suppliers.

Manufacturers of digital printing equipment for industrial and commercial sectors are beginning to rethink their strategies on ink supplies.

Parts of the digital market are expanding so rapidly in Europe that makers of digital presses and key components like ink jet printheads are starting to lose their tight grip on the ink distribution chain. In particular, they are having difficulties keeping up with the growing demand among printers for a wider choice of inks.

As a result, they are having to form alliances with a broader range of producers of inks and their ingredients. The need among printers for greater variety has also extended to coatings and toners.

This trend could be the beginning of the end of the practice within the industrial and commercial sectors for ink supplies to be controlled by the digital printing equipment manufacturers (OEMs).

Their dominance of distribution has stemmed from the small office and home segment (SoHo), but it is looking increasingly unlikely that in the long term they will be able to replicate that power in high-volume printing. Nonetheless, in Europe, any major changes in the supply chain will be slow and gradual.

At the core of the present strong growth in digital printing are alliances between printing equipment manufacturers, printhead makers and ink producers and formulators.

These will continue to prevail for several more years at least because the complexity of ink jet and other digital technologies necessitate partnerships between the major players.

However, within these alliances, there are already signs of ink manufacturers wanting to promote their owns brands of digital inks.

Manufacturers of digital printing equipment rely on ink sales for a relatively large proportion of their profit because of the high margins involved. Their profits are starting to be affected by the activities of third-party suppliers selling direct to printers. One option for equipment makers is to lower their margins on ink supplies and hope equipment sales will compensate for the reduction.

Digital printing is making inroads into most areas of industrial and commercial printing. It is probably growing at the fastest rate in the lower end of the commercial sector, where printers are able to take the biggest advantage of the demand for personalized and customized materials.

In the book market, publishers are switching in larger numbers in Europe to digital printing systems which enable them to respond to individual needs, such as the printing of backlist and out-of-print books.

In the larger printing companies, digital printers are being introduced to complement offset and litho presses.

Changing Strategy
The strategy of OEMs within their rapidly expanding markets is try to promote both their equipment and their inks. But this is becoming more difficult as they are forced to use more sources of ink supplies to broaden their ink portfolios so that printers have a greater choice.

In the electrographic segment of digital printing, OEMs whose main outlet has been the copier sector have the advantage of many years experience of developing their own proprietary toner systems.

Toners have become more sophisticated as a result of technologies which improve the size and consistency of particles. This has enabled toners to provide higher quality color printing.

Oce has recently launched a digital color printing system based on a direct imaging toner technology called Top-S, which has both smaller and more uniform particles. The iron-based toner particles are placed side by side, giving a wider gamut of colors. Seven colors – red, green, blue, cyan, magenta, yellow and black – are employed to give a full-color image.

“Although the toner is tied to our Platinum Platform range of presses, we decided to give it a brand name of its own because it is such a key part of the machines,” said Dirk van Thillo, a marketing executive at Oce’s Colour Production Systems (CPS), Venlo, Netherlands. “In addition to optimizing color and giving new opportunities for the applications of coatings, the toner allows for the structuring of the print surfaces such as embossing.”

A major outlet for the Platinum Platform machines is small and medium-sized commercial printers running their own print shops.

“We are seeing a lot more commercial printers looking seriously at digital processes so that sales are beginning to pick up quite quickly,” said Mr. van Thillo. “Digital printing has taken longer than expected to penetrate the commercial market. But now it has lost its mystique and has become more acceptable.”

Kodak Nexpress
Kodak Nexpress has been broadening the market for its range of dry inks which have a powder form like toners but when heated they have a flow like conventional inks.

The inks, which are made at a Kodak plant in the UK, have just received European Union certification for use on paper and board food packaging.

“This will open up a potentially large market for the inks,” said Wolfgang Heimes, Nexpress’ marketing communications manager. “We only applied for the certification because of the demand for the use of digital printing in the food packaging sector. It gives packaging companies the flexibility of cost-effective short runs and the possibility to print variable data, and to be more responsive to customized requirements.”

Like other OEMs with a background in copier manufacturing, Oce and Kodak have been expanding aggressively in ink jet printing.

Oce recently introduced a range of large format ink jet inks which can be printed on a wider variety of substrates for outdoor applications.

The European digital sector has been bracing itself for the full impact of Kodak’s drive into the ink jet market following last year’s takeover of Scitex Digital Printing, now renamed Kodak Versamark. As a result, Kodak is one of the few major OEMs to be completely backward integrated, not only into ink development and production but also in the development and manufacture of printheads as well.

A proprietary waterborne ink technology for continuous ink jet uses has enabled Versamark to boost its European sales in direct marketing services.

The ink can be applied in a Versamark printing system with a speed of up to 300 meters per minute, a resolution of 300 dpi and a capability of personalizing the equivalent of 170,000 A4 sheets per hour.

“It is the only system of its kind on the market with such a high print speed and level of variability,” said a Versamark official. “It is especially appropriate for incorporation within offset printing lines.”

“Kodak has a long inheritance of ink development,” she continued. “You can expect the introduction of many more new technologies in digital printing inks.”

New Role for Ink Companies
Major producers of conventional inks in Europe have had only limited opportunities to establish their own brand names in the OEM market. The biggest openings have been in the after-market or in the segment for third-party sales, which is still relatively small in the region.

Ink companies like Sun Chemical and Sericol have become distributors of digital printing machines in which their own inks are used.

Sun Chemical has an agreement with Inca Digital Printers, Cambridge, England, under which it distributes and provides the ink for an Inca ink jet machine for the sheetfed corrugated packaging market.

“There are not many other ink producers who have created an ink jet ink for the corrugated sector,” said Peter Walshe, general manager of SunJet, Sun’s OEM digital inks business, based at Midsomer Norton, England. “Instead of waiting for an OEM to produce the hardware, we formed an alliance with Inca to make a jointly developed product commercially feasible.”

Sun Chemical also has a branding arrangement with Xaar, the Cambridge-based developer and producer of printheads. The Sunjet name appears on the Xaar printheads for which Sun has created the inks.

“There are similarities with the way the name of Intel, the chip maker, appears on computers,” said Mr. Walshe. “But it remains to be seen whether this is what will also happen with inks in digital printing.”

Xaar has now applied a variation of the branding system for its ink development partners to other ink suppliers. It has introduced a certification plan under which third-party ink producers will become approved suppliers to users of its print heads.

“One of the ideas behind the scheme is to meet the needs of end-users who want to stay with their existing ink suppliers,” said Jill Woods, Xaar, inks product manager. “We will provide the data for the ink producers to make the inks for the printheads, test them and then give them a Xaar certificate. It broadens the choice of inks for end-users, gives more access to ink makers to our printheads and allows us to retain a level of control.”

Xaar already has certified the inks of two U.S. digital ink producers, Triangle and Lyson Inc., the North American subsidiary of Lyson Ltd. of the UK, for supplies to the Asian and South American markets. In both regions, printers are not so dependent on OEM inks in the way they are in Europe and North America.

“In Asia in particular, end-users are left by OEMs to fend for themselves,” said Ms. Woods. “There could be potential for our certification scheme in Eastern Europe, but it looks unlikely there would be any demand in Western Europe or North America, where we would not want to compete with the ink sales of OEMs who are our primary customers.”

Chinese OEM have begun to market their digital presses in Western Europe. Also, Asian producers are selling digital UV inks in Europe. Asian companies may accelerate changes in the Europe digital printing market.

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