Last Updated Tuesday, September 2 2014
Print RSS Feed

Ink Industry Looks Back on 2006, Considers Possibilities for 2007



By David Savastano, Ink World Editor



Published December 7, 2006
Related Searches: ink savastano napim
As 2006 comes to a close, ink manufacturers find themselves looking back on a year full of challenges as well as hope, while wondering what the future may bring in terms of consolidation, raw material prices and overseas competition.
   
After 2005’s unprecedented wave of consolidation, the ink industry remained relatively quiet. In terms of financial results,  most of the major ink manufacturers reported that they fared better than in recent years.
     
Still, major moves have occurred on the customer and supplier sides which are impacting the industry, and rumors persist of more changes to come. On the positive side, the consolidations in the ink industry are allowing the largest manufacturers to streamline their operations and serve their global customers more effectively.
   
Raw material prices offer a clearer picture. Crude oil prices have subsided somewhat, but ink manufacturers find themselves in a tight squeeze. Simply put, ink manufacturers are competing for key ingredients with much larger industries, and the ink industry’s overall buying power hardly matches those businesses. This means the ink industry will be paying a premium price for these ingredients, or risk being shut out altogether.
   
On an optimistic note, ink manufacturers have finally been able to raise their prices in an attempt to make up for the higher raw material costs, manufacturing and transportation expenses they are facing. According to the National Association of Printing Ink Manufacturers (NAPIM), during the first nine months of 2006, U.S. ink sales declined 1.5 percent by volume compared to the previous year, while sales rose 4.9 percent.
   
Whether these increases are enough to stabilize or even improve the paltry margins for ink manufacturers is another matter. NAPIM’s 2005 State of the Industry Report showed that U.S. ink manufacturers had an average earnings before income taxes and depreciation of 1.4 percent and return on net assets of 2.6 percent.   These numbers are, to put it mildly, unhealthy for any industry.   
   
These are among the critical topics discussed in my Year in Review article, which begins on page 20. The ink industry finds itself in the midst of changing times. Only time will tell what the future may bring.

David Savastano
Ink World Editor
dave@rodpub.com


blog comments powered by Disqus