The UV/EB Report

By David Savastano, Ink World Editor | 11.15.10

The energy curing ink industry continued to enjoy growth during the past year, particularly in the packaging segment, and technologies such as LED offer further opportunities in the coming years.

The market for energy curable (EC) inks and coatings has been one of the strongest growth areas for ink manufacturers in recent years, and while the growth has slowed down a bit during the past year, new opportunities continue to emerge.

“In 2010, the EC market was up from 2009, but we estimate that it grew at less than traditional compound annual growth rates for the third year in a row,” said Grant Shouldice, director, product management of energy curable inks, North American Inks, Sun Chemical. “UV flexo inks for the narrow web, tag and label printing segment were the fastest growing. UV inks for commercial printing was flat to marginally up. As UV sheetfed printers look to grow their business, they are tapping into the high end packaging markets.”

“We have experienced excellent growth in 2010,” said Jonathan Graunke, vice president – energy curable technologies, INX International Ink Co. “The energy curable market for inks and coatings is enjoying a strong run, especially from the packaging segment. Our international sales growth continues to be steady, with solid results in the UV flexo market.”

“Our UV business is booming, especially in packaging,” said Richard Czarnecki, senior vice president and chief technical officer for Superior Printing Ink. “We continue to see UV as a great opportunity for growth, and we are planning on dedicating additional resources to this market.”

“For Toyo, UV ink sales are up over 2009, and in particular, plastics and folding carton applications are showing the most growth,” said John Copeland, president and COO of Toyo Ink America, LLC. “In recent years, we’ve significantly beefed up our UV ink lineup with several new value-added technologies and applications to meet the diverse needs of our customers.”

Peter Hilpert, BU head, labels and sheetfed/UV EMEA at Siegwerk, noted that as with all markets in the graphics industry, energy cured inks also suffered under the economic crisis. “A lot of companies shortened their production and due to this overcapacity in the printing shops, we faced a price pressure on UV/EB products,” Mr. Hilpert noted. “In late 2009, the market in Europe recovered and the first shortage of raw materials appeared, combined with a significant price increase on raw materials up to 25% – partly FOREX (foreign exchange market) driven. All major ink producers had to raise their prices.”

“UV inks and coatings continue to make inroads in the label, decorative and industrial markets,” said Brij Nigam, vice president of sales and marketing for IdeOn LLC, “while losing ground in commercial (magazine, advertisement and consumer information) market mainly due to declining ‘print’ advertising dollars.”

“We see a small level of growth, especially in packaging,” said Daryl Collins, Wikoff Color’s vice president of sales and regional operations. “There have been some new EB presses sold in the last few months, and this is a good leading indicator of future ink demand. The greatest opportunities for UV seem to be in UV flexo, at the moment. The constraints being placed on UV formulations by some large consumer packaged goods companies are definitely hindering growth in UV, but are not affecting EB in any significant way.”

“The market’s been soft, although I have seen some improvements in the commercial end, and we are making good inroads in packaging,” said Pat Carlisle, president of Joules Angstrom U.V. Printing Inks. “We are noticing that customers are looking to differentiate themselves by offering high quality. We consider ourselves blessed.”

Mr. Carlisle noted that niche markets are growing. “We’re making slow inroads into the LED market,” Mr. Carlisle said. “Waterless UV also seems to be a nice little niche.”

“Overall it is recovering nicely compared to last year,” said Damon Geer, vice president, Zeller+Gmelin Corporation. “Some new equipment is being sold, which is a primary sign of real recovery and gives us hope for the future. Last year at this time, the printing industry as a whole was still reeling and no one knew where the bottom was; as it turns out we were at bottom then.”

Raw Materials

Raw materials are a constant concern for the ink industry, and the energy curing field is no exception. While acrylic acid is the ingredient most frequently cited, resins and pigments were also areas of concern.

“The acrylic acid shortage seems to be lessening, although costs have not yet started to decline, and for a couple of raw materials, we are still on allocation,” Dr. Don Duncan, director of R&D at Wikoff Color, said. “Pigment availability has been a larger problem recently, although there are still some niche raw materials that are occasionally hard to get. In general, there are enough raw materials to meet current demand, but with longer-than-expected lead times. Any sudden growth in demand will likely put some raw material suppliers back into a shortage situation.”

Mr. Carlisle said that pigments are a growing concern.

“The biggest issue is availability of pigments,” Mr. Carlisle said. “We are noticing that there’s something going on in the pigment industry, as some pigment companies seem to be shifting away from the ink industry toward markets where margins are better.”

“A significant price increase combined with a shortage of raw materials did not make our life easier,” Mr. Hilpert noted. “Delays in deliveries and partly changed qualities or borderline specs increased the effort in quality control and in the labs to guarantee ongoing supply of our customers.”

“At the moment it’s affecting ink availability from some ink suppliers,” Mr. Geer said. “It has certainly caused the industry to look for alternative materials from alternative sources.”

Mr. Shouldice said that 2010 has been an extraordinary year in terms of raw material challenges.

“Arguably, the chemical industry has not seen a year of similar supply tightness in many years,” Mr. Shouldice said. “Among the many products under varying degrees of pressure were rosin resins, some specialty pigments, energy cure resins, acrylic resins, titanium dioxide and some additive resins. The combination of a number of factors, including unexpected feedstock issues, higher demands as companies refilled their pipelines following a slow 2009, and tautness in supply resulting from cost and working capital actions, has led to elevated fixed costs on raw material goods and an increase in the price of energy curable inks and coatings.” Mr. Shouldice added that Sun Chemical continues to work on controlling costs closely with its supply chain partners, to improve internal operations and to develop new value-oriented products.

“The shortage of materials has led to substantial price increases that cannot be absorbed,” Mr. Graunke said. “Having strategic supply partners has proven to be invaluable for us to have continued access to supplies without delays.”

“Toyo Ink America has been closely coordinating our raw materials replenishment schedule with our customers before they set up print jobs,” Mr. Copeland said. “This has led to improved forecasts, allowing us to deal with just-in-time ordering while keeping inventory costs to a minimum.”

Mr. Nigam said that the supply situation has been a confusing one for suppliers. “At one end, raw material suppliers informed us that everyone is on a quota system, then the supply situation disappeared,” Mr. Nigam said. “We have seen price increases since the middle of 2009 due to the supply situation. As we received the information from our raw material suppliers, we passed it on to our customers, which created a very confusing environment in the market place. Customers became very dubious about utilizing UV/EB technology in the new markets. This definitely will have a significant impact on future growth.”

Growth Markets

Energy curing technologies continue to make inroads in key markets. Mr. Copeland noted that in particular, folding carton market and new food packages for the flexible packaging market are strong. Mr. Collins noted that key growth markets include UV flexo for labels and labels in general, UV inkjet and EB litho for packaging.

“The narrow web, tag, and label printing segment showed the largest growth; the packaging market segment, in general, showed growth,” Mr. Shouldice reported.

“We see a quicker recovery in the packaging markets rather then in the pure commercial segment (leaflets, magazine printing),”Mr. Hilpert noted. “In the packaging segment, a strong trend towards low migration inks is noticeable.”

“For UV inks, the label market and POP box decorative continue to show areas of growth,” Mr. Nigam said. “For UV coating, the real growth is in label, packaging boxes and industrial markets.”

“The only market we are seeing ‘real growth’ in is the packaging markets, most of that coming from the flexo sector,”Mr. Geer said. “Commercial sheetfed, business forms, direct mail and even cup printing are still lagging behind previous levels established in 2008, though it isn’t a market, end users pursuing green alternatives is growing.”

“Packaging is by far the strongest performer,” Mr. Graunke noted. “Across the board, from folding cartons to food packaging and plastic labels, it is doing extremely well and exceeding our expectations.”

EB Market

The EBmarket also offers opportunities, although these are primarily in packaging.

“We’ve been hearing more discussion on EB technology for UV offset ink applications,” Mr. Copeland said. “Technological advances are also driving the use of EB materials towards flexible packaging applications.”

“EB printing is primarily used for packaging printing applications, and is growing in those packaging printing applications where there is sensitivity with the raw materials used, such as in the folding carton segment,” Mr. Shouldice said. “Emerging printing technology, like the variable speed offset (VSO) presses, use EB ink technology.”

“There is some talk that EB could provide some practical solutions to the food packaging markets in the near future, but LED could possibly provide the same solutions at a lower cost as it is unlikely that the operational costs of EB are going to drop. That being the case, LED might be the more likely option,”Mr. Geer said.

“It’s slow yet it is steady growth,” Mr. Graunke said. “The reorganization of Drent has impacted growth and may have some effect into the first quarter of 2011.”

“EB demand is largely based on press installations, and new press installations are just now beginning to occur,” Dr. Duncan said. “Volume on existing presses is strongly dependent on demand from CPG companies, but this demand seems to be growing after the tough economy of 2008 and 2009.”

“Despite the difficult economic times, the EB market continues to hold its own,” Mr. Nigam said. “The technology has potential for growth but clearly lacks a good solution in the packaging market. Although there have been some innovations in recent times, we believe there is a lot more to be done to expand the market for EB technology. IdeOn, along with Amgraph, partnered to introduce a first-of-a-kind ‘EB Gravure Technology’ for the packaging market.”

The Environment

Interest in environmentally friendly products is having a major impact on the energy curable market.

“The brand owners and suppliers to brand owners are strongly indicating a need to satisfy sustainability requirements,” Mr. Shouldice said. “EC inks help the market to meet the demand for environmentally friendly products by conserving energy and using bio-renewable raw materials. These inks require less energy in the printing process and are manufactured with very low, and in some cases without any, volatile organic compounds.”

“Sustainability became in the last year not only just a key word,” Mr. Hilpert noted. “Low odor, low migration and also environment friendly systems such as renewable raw materials (also in UV) attract especially end-users and brand owners. Here we see a real potential for differentiation from competition as soon as we have reached the industrial production stage and not only on lab scales.”

“This is an area where things are changing rapidly,” Mr. Geer reported. “Low odor and low migration inks are being requested now more than ever, and biodegradable substrates are showing up more and more. The push by many end users to go green certainly helps the UV industry break into markets previously dominated by conventional inks.”

“With air quality regulations becoming more stringent, many printers are faced with the need to reduce emissions and bring their facilities to compliance,” Mr. Copeland said. “Such businesses tend to gravitate toward green equipment and technologies.”

“This is where both UV and EB technology excels and has seen quite a bit of traction, especially with packaging customers,” Mr. Nigam noted. “Since both UV and EB products can be formulated without VOC, they represent a substantial advantage over both water/alcohol and pure solvent base technologies. With such a heighten level of awareness and genuine concern among the consumers in regards to environmental issues, many of the packaging customers are interested in exploring the technology. Obviously the poor economic conditions have not helped business, as they have cut back on R&D, which is essential for developing and implementing new technologies like UV and EB.”

“The energy curable market is generally viewed as a BACT (Best Available Control Technology),” Mr. Graunke said. “Like any process that has competing processes, we are consistently performing impact studies that measure environmental impact of various product lines compared to other technologies. Each ink technology – UV, solvent, water-and oil-based – has unique characteristics that make it the best for its specific application.”

“Raw material suppliers, especially for oligomers, are continually introducing new products with a higher content of plant-derived material,” Dr. Duncan said. “This concept is being promoted as a ‘good thing,’ although there have been no studies to prove whether the incorporation of plant-based content actually uses less petroleum-based energy and processing. Companies are responding as best they can to a perceived market pull, but it is way too early to be sure exactly what the right thing to do is. However, since the UV and EB products typically have very low emissions and a fairly low-energy curing process, they tell a pretty good ‘green’ story.”

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