In the past 10 years, there has been much consolidation within the printing ink industry. Siegwerk has
Herbert Forker, Siegwerk’s CEO, spoke of the company’s growth, while also stressing its focus on tradition, proximity and reliability as its three values.
“The drive for us to go global came from the packaging business,” Mr. Forker said. “Many of our customers based in Europe also moved into Asia, such as Nordenia and Pechinney – and that led us to open operations in Thailand.”
Expansion to the U.S. came in 2003, with the acquisition of Color Converting Industries (CCI).
“In the U.S., we had publication gravure business, but when Nordenia moved some of its operations there, we started to ship our packaging inks to the U.S.,” Mr. Forker said. “That was not efficient, and when Alcan bought Pechinney, we started looking for another way. We had had earlier talks with Color Converting in 2001, but hadn’t been ready to expand then. We hadn’t had the cultural awareness, and so we brought new people on board who had international experience. By 2003, we bought CCI, and proved we could handle this type of acquisition. We are growing in the U.S. as we have a strong organization, excellent service people, and always operate in higher value segments. ”
In 2005, Siegwerk acquired SICPA Packaging Ink Division, which added worldwide capabilities to Siegwerk.
“We saw how the industry was consolidating,” Mr. Forker said. “We had negotiations with SICPA before, and when they ran into some financial difficulties due to their aggressive globalization, we came to a deal. SICPA had competences in UV, sheetfed and water-based inks, which was a perfect fit for us, and only three countries had a partial overlap – the U.S., Thailand and Poland.”
Even with all of this expansion, Mr. Forker noted that Siegwerk is in fine financial shape. “We don’t have a huge debt – we are far from that,” Mr. Forker said.
The REACH regulation is a concern for Siegwerk.
“Siegwerk is fully aware of the strategic impact of REACH and we are currently working intensively on the upcoming pre-registration phase which is the next implementation step of the REACH regulation,” Mr. Forker said. “Within the framework of a centrally coordinated REACH project, in which our Corporate HSE department cooperates closely with all involved internal partners, e.g. Purchasing and Application Technology, we investigate the pre-registration status for all raw materials purchased from our suppliers. The results of these investigations are permanently collected in a status-monitoring system in order to safeguard the highest possible level of transparency and ensure legal compliance.
“The main goal of our REACH project is to keep the impact of REACH on our product portfolio as low as possible. However, the main challenges will arise when the registration phase of REACH will start from 2010 on: The high registration costs may increase the raw material prices and there is certain likelihood that some raw materials will not be supported anymore by the manufacturers under REACH. Therefore it can be anticipated that the variety of raw materials available to us will shrink.”
The higher cost of raw materials is also leading to an emphasis on how Siegwerk manages its costs.
“Today, we are all looking at how we manage effectively,” Mr. Forker said. “We are still working on our supply chain. The biggest challenge in the industry is becoming more effective.”
“We don’t want commoditization,” Mr. Forker added. “The customer may have higher processing costs. Sometimes an ink may cost more, but it saves on processing costs.”
The company has made some recent changes, most notably selling its Australian packaging ink business to Flint Group earlier this year.
Mr. Forker noted that Siegwerk continues to invest in the future and providing the best value for its customers.
“We want to be where our customers are,” he said. “Asia is showing 25 percent growth, which is why we bought Siegwerk India. In Russia, a lot of our global customers invested as well and asked us to come with them.”