Without a doubt, the global recession heavily impacted the vast majority of printing ink markets. One of the few areas that remained fairly stable was the energy-curing segment. UV and EB curing has remained strong due to the environmental advantages of the technology, its performance benefits and its usage in the packaging printing market.
As for end-use markets, IAL reports that the graphic arts segment is the largest in the Americas, at 55,900 tons. Globally, the market for formulated energy-curable products amounted to slightly more than 464,000 tons in 2009.
In North America, IAL noted that the fastest growing technology is digital, where good growth opportunities exist in 100% UV as well as low viscosity water-based UV chemistries. Conductive inks are also receiving an increasing amount of attention. Globally, IAL expects good growth in UV-curable inks from many emerging Eastern European markets, including Russia.
UV and EB raw material suppliers noted that while printing was impacted by the recession, packaging did relatively better by comparison.
“The printing industry was affected by the economic downturn that began at the end of 2008,” said Jo Grosemans, global marketing manager, Cytec Industries Inc. “The publication segment was the most severely impacted by both the crisis as well as increased use of digital media.We see a number of printers retrofitting their presses with UV lamps to be able to do previously outsourced orders (one-page leaflets, inserts, etc.) themselves.”
Mr. Grosemans noted that food packaging is the market segment which has been the least impacted by the recession, as people have been eating at home compared to dining out.
“Also, we observe that rigid containers are being replaced – plastics, glass, metal – by flexible packaging, especially plastics,” Mr. Grosemans added. “Flexible packaging can provide more design freedom for packaging designers and also reduce weight significantly which helps environmental performance and also generates cost savings. In general, we expect improvements in all segments as the economy is slowly recovering.”
Roger Küng, head of operations energy curing at Rahn AG, said that especially in Q1 and Q2 of 2009, the whole industry was impacted by a heavy downturn in all market segments in the U.S. as well as in Europe.
“The areas suffering most were – as you would expect – automotive, wood coatings and also screen, which took a double hit due to an acceleration of the substitution through digital printing,” Mr. Küng said. “In the second half of 2009 things started to improve, first in the North American market, and later also in Europe.”
However, in the face of this good news, there is the spectre of higher raw material costs and shortages, beginning with acrylic acid.
“Shortages in specific raw materials have had a major impact on the whole value chain,” Mr. Grosemans said. “Prices have gone up, and, in some situations, not enough material was available to supply the market demand. It has been a very difficult situation for the whole industry and we have been trying hard to fulfill our customers demand as much as possible, without trying to interrupt customer operations.”
“Right now, everything is on the rise,” Mr. Küng said. “The current acrylic acid shortage is affecting the whole market. But also other raw materials, like basically all polyols, or for instance adipic acid or isocyanates, have experienced significant increases going into Q2/2010. Sometimes it seems like the big chemical producers make unlucky choices when it comes to scheduling maintenance stops or other supply interruptions.
“As the economy improved, the supply side immediately became a problem,” Mr. Küng added. “Increasing freight rates and currency fluctuations in Europe are another factor impacting prices. Chinese sourced raw materials are affected by this, but also see increases due to more regulations in terms of environmental protection and labor laws. We expect the whole of 2010 to be hectic and volatile for raw material prices.”
“The advantages and drivers of UV/EB essentially remain the same, although it seems that people lately have become more aware and receptive to the true benefits that are more than just a clever marketing spin,” Mr. Küng said. ‘The interest in ‘green’ technologies certainly gives our market another boost, but in the real life of converters, I would put the relevance of the key drivers in following order:
1. Operational efficiency gains / turnaround times of printing jobs
2. Quality of finished goods
3. Space and energy savings of operator
4. High level of product innovation from inks, coatings and equipment manufacturers
5. Reduction in emissions / “green” aspect
“We believe that the economic situation has helped to drive attention towards green technologies, although there was some slowdown due to the economical downturn (limited investment and R&D resources),” said Mr. Grosemans. “Some green products have been launched. However, the successful market adoption of these products has been difficult as they are perceived as cheap materials, which does not reflect reality.
“From a positive side, the economic situation made many printers reflect on real cost positions and can make a difference for future investments as we believe printers understand better their total costs and potential productivity gains which could be provided by energy curing technology,” Mr. Grosemans added. “We see that working capital is becoming extremely important for brand owners and printers, and energy curing can help in reducing this as JIT supply and shorter order runs are easier to achieve with energy curable printing technologies. Regulatory changes are driving interest towards green technologies. It is becoming more and more difficult to obtain permission to run solvent-based technologies, or the cost of building recuperating systems or obtaining insurance is playing a role in investment options. We believe that energy curable technologies have a good growth potential in printing, while new developments in resins and inks are necessary.”
When it comes to major markets for UV and EB, packaging remains the most important.
“In terms of significance, it still is the whole packaging area, flexo and offset, that offers high single-digit growth rates across the globe,” Mr. Küng noted. “Within packaging, it is predominantly secondary food packaging where we see a lot of activities and innovation from inks and coatings manufacturers.”
“From a market perspective, food packaging, especially flexible packaging, seems to have the best opportunities, including the increased use of low migration inks,” Mr. Grosemans noted. “From the printing technology side, we still see good growth in flexo technology as some flexible food packaging applications previously done with conventional technologies shift to narrow web UV. Offset seems to move more or less at GDP growth.Some new press types, like the VSOP technology and a recently launched variable sleeve press for flexible packaging, could have an impact on this specific application. These press types could be beneficial in converting some of the traditional solvent-based central impression printed flexible packaging towards energy curing printed packaging. Screen is decreasing year-over-year.”
Inkjet is an area where UV offers a lot of promise.
“Digital printing obviously is another growing technology that in the last two to three years has seen sustained double-digit growth and will continue to do so,” Mr. Küng said. “Further down the line, printed electronics and within that segment, printed photovoltaics, could gain traction, although the UV niche still needs to be better defined for some of these applications.”
“UV digital printing has the fastest growth rate,” Mr. Grosemans said. “However, the base volume remains small compared to the other more established technologies.”
While energy curing did feel the impact of the recession, its market share increased relative to other technologies. Mr. Küng added that converters have also been doing their homework on UV, and are adding UV capabilities.
“We believe that energy curing volumes declined in Western markets by 9 to 11 percent in the past year, which is a relatively moderate decline compared to conventional technologies,” Mr. Küng added. “Thus, a further increase in market share for radiation curing is one of the most important outcomes of the recession. It also seems that many converters have used the downtimes to strategically assess their business model, resulting in investments into UV equipment and some retro-fitting of existing lines. What we see right now is a quite significant upturn in all the market segments we serve.”