For the most part, the past few years have been financially grim for the printing ink industry, as increasingly high raw material, operational and transportation costs have taken their toll on margins. According to the U.S.-based National Association of Printing Ink Manufacturers (NAPIM), the earnings before interest and taxes (EBIT) in 2006 was a paltry 1.9 percent. As poor as that is, that is more than double 2005’s dreadful 0.9 percent.
While we won’t know the 2007 results for quite a few months, ink industry leaders are reporting that the past year has been an improvement for their businesses. This gain occurred despite even harsher raw material prices increases, as crude oil nears $100 per barrel and pigments and intermediates lost their value added tax (VAT) subsidy from China.
For ink manufacturers, one key has been the ability to pass along the price increases they are receiving. In the past, many ink companies would just internalize the price increases, but the time came when that was no longer feasible. While the price increases ink manufacturers are putting through most likely don’t completely cover their higher costs, it is helping to keep the industry somewhat profitable.
There are still challenges ahead. Ink industry leaders are wary of more price increases, and new technologies and consolidation continues to change the shape of the printing industry. However, ink manufacturers are looking forward to the challenges ahead, as they note in The Year in Review beginning on page 21.
The ink industry has seen many changes over the years, including new executives, and I profile some of the new leaders within The Year in Review article. I also have the pleasure of welcoming one of the new executives, John Copeland, president of Toyo Ink America, to Ink World’s Editorial Advisory Board.
Mr. Copeland is a 30-year veteran of the ink industry, and has been involved in laboratory, R&D, sales, technical service and manufacturing during his distinguished career, beginning at Sinclair & Valentine and including Flint Ink, SICPA and Handschy Industries before he joined Toyo Ink America. The Editorial Advisory Board is a key source of advice and counsel for me, and Mr. Copeland is indeed a most welcome addition to the board.