Raw Material Supply, Cost Issues Are Major Concerns for Ink Companies

By David Savastano, Ink World Editor | 09.20.10

Every September, Ink World publishes our annual Buyers’ Guide, which is also available online and updatedat our web site, www.inkworldmagazine.com, throughout the year. The Ink World Buyers’ Guide remains the industry’s most comprehensive listing of products and services for ink manufacturers and allied industries.

The Buyers’ Guide issue is also the ideal time for our annual Raw Material Report, which begins on page 19. For the Raw Material Report, ink industry leaders discuss the trends they are seeing on the supply front. And what these ink industry leaders are reporting is clearly cause for concern.

Obviously, the global recession and the sluggish printing ink industry have impacted ink manufacturers. The hope was that once the economy improved, things would get better for the ink companies. However, the recession had some major side effects that are leading to widespread challenges for ink manufacturers as well as their suppliers.

One of the major forces at play is the consolidation that has occurred throughout the supply chain. There are fewer suppliers of key materials and feedstocks, and many of the companies that remain have shut down facilities and taken capacity out of the market. Considering the state of raw materials, it is unlikely that most of these companies will make the investment into new facilities at this time.

Another major concern for ink manufacturers is that some of the important ingredients they need for formulating their products are also coveted by larger industries, which has led to restrictions on purchasing.

The list of ingredients that ink companies are worried about is lengthy. On the UV side alone, acrylic acid is in short supply, which impacts monomers and oligomers. In terms of pigments, titanium dioxide, carbon black and Violet 23 are of particular note. Gum rosin, nitrocellulose and solvents all are areas of concern; actually, the list is practically endless.

Ink companies are also facing higher prices from their suppliers, with some estimates ranging for raw material cost increases averaging as high as 30 percent.

To meet these challenges, Sun Chemical, Flint Group, INX International Ink Co. and Siegwerk announced a series of price increases of their own. Whether these increases are being acccepted by customers is uncertain, but higher raw material costs and supply issues are a reality that ink companies have to face.

David Savastano
Ink World Editor