Asia-Pacific Region Offers Strong Opportunities for Ink Manufacturers

By David Savastano, Ink World Editor | 06.01.06

In recent years, there have been few bright spots for the printing ink industry. In terms of regional growth, certain major markets have, at best, witnessed slight growth. However, the Asia-Pacific region has been the area of greatest opportunity for ink manufacturers in recent years, with nations such as China and India showing double-digit economic growth.
 Needless to say, multinational ink manufacturers have taken notice. Flint Group will open its new packaging ink plant in China in the coming months, and Dainippon Ink & Chemicals is opening up new ink facilities throughout the region, most recently in Vietnam. Sakata Inx has opened new ink factories in China, India and Vietnam. Siegwerk Group’s acquisition of SICPA’s packaging ink division last year gave the company a stronger presence in the region. Huber Group acquired Micro Inks, the leading ink manufacturer in India, late last year. 
In my report on the Asia-Pacific ink market beginning on page 29, the growth in the Asia-Pacific region, including the economic upturn in Japan, is providing opportunities for many ink manufacturers. There are challenges, to be sure: rising raw material prices are impacting margins, and more consolidation among printers and ink companies is likely. Still, the Asia-Pacific market looks to be the best opportunity for ink manufacturers.

When we talk about the changes that are occurring in the ink industry, we look most frequently at the consolidation that is taking place – overcapacity, increasing offshore activity and the challenges occurring due to the inability to completely pass along higher raw material prices, thus negatively impacting margins. For suppliers to the ink industry, the story is similar.
Resin manufacturers are no exception. Petrochemical price increases are hurting resin makers, leading to price increases and further efforts to cut costs. With that, there have been some recent merger and acquisition efforts. Last year, Hexion Specialty Chemicals announced its intention to acquire Akzo Nobel Ink and Adhesive Resins, an effort that is ongoing.
Last month, BASF moved to acquire Johnson Polymer from JohnsonDiversey. However, this acquisition is more about JohnsonDiversey looking to focus on core businesses and BASF seeking new technologies, a strength of Johnson Polymer. I look into this and other recent trends in the resin market in our cover story beginning on page 21.

David Savastano
Ink World Editor