The Packaging Ink Report
The packaging market continues to do well in relation to other printing segments. In particular, flexible packaging and narrow web remain strong areas, and ink manufacturers continue to see opportunities for growth.
“In the packaging market, we have seen moderate growth in 2011 and similar growth in 2012,” Charles Murray, president, North American Inks, Sun Chemical, said. “Sun Chemical will continue to see growth in the flexible packaging segment, specifically value-added packaging, as the trend in the market continues to move towards functional and sensory packaging.”
“We continue to see the packaging printing market as one of the few printing segments with sustainable long-term growth prospects,” Siegwerk CEO Herbert Forker said. “Depending on the development stage of the macro-economy in question, we see growth rates that are significantly above GDP growth in emerging markets, while growth of packaging printing in established economies - like Western Europe and USA/Canada - tends to run parallel to GDP.”
Mr. Forker noted that the recovery from the recession has not impacted all packaging segments consistently. “It generally depends on which type of product is being packaged, with non-food products being more impacted by recession that food-related products,” Mr. Forker added. “Compared to other industries, we tend to see a somewhat reduced cyclicality of packaging printing.”
“The past couple of years showed us that the packaging market is not ‘recession proof,’ and 2011 was no exception,” said Doug Aldred, president, Global Packaging & Narrow Web at Flint Group. “The year held promise in the beginning and turned into a struggle as the economies in both Europe and North America came under severe pressure fueled by the deficit crisis and consumer doubts. It’s true packaging did significantly better than other parts of the printing industry, but the recovery process was slowed and, in some places, stagnated.”
“There are bright spots in the market, and we are optimistic about slow but steady growth over the next few years,” added Doug Labertew, vice president, Sheetfed, North America for Flint Group. “Nonetheless, so far in 2012, we continue to see lackluster market activity.”
“The packaging ink market has been very stable over the past year,” said Mark Hill – vice president of R&D for INX International Ink Co. “From our perspective at INX, the economy has resulted in little impact on the demand. It appears that packaging, especially the food segment, wasn’t affected by the recession.”
“We found the overall packaging and ink markets to grow slightly in the past year,” said Rob Callif, vice president, BCM Inks. “We have seen a recovery in recent months, but not to the level of where business was prior to the recession. Our company saw Mexico to have the greatest growth within North America.”
George Sickinger, president and CEO, Color Resolutions International (CRI), said that 2011 was improved but not robust.
“Within the flexo world, narrow web printing showed remarkable stability against economic downturns,” Mr. Sickinger said. “The economy has shown an upswing in the 4Q and continuing in 1Q 2012, with a forecasted GDP growth of 3.5% in Mexico. Regional growth along the Mexico/U.S. border continues to be restrained by the drug war violence. This regional insecurity is preventing foreign investment and market growth.
“We have observed that the most successful companies in this economy are the ones who seek to get to the ‘next level’ of graphic reproduction and are listening to what the consumer products companies are asking for to boost consumer demand,” Mr. Sickinger added. “The trend for more graphics in packaging and narrow web plus increased emphasis on productivity gains is placing more pressure for investment in new print equipment. The 2-3 color market is shrinking, and four-color process and higher graphics is dominating the market.”
Raw Material Trends
As has been the case throughout the ink industry, raw materials impacted packaging ink companies in 2011, and there is every likelihood that 2012 will bring more of the same.
Diane Parisi, vice president supply chain, North America for Flint Group, noted that raw material costs were a significant issue in 2011 due to a mix of factors that include supply and demand, environmental regulations that resulted in increased manufacturing costs for suppliers and a decreasing number of raw material suppliers serving the graphic arts industry.
“We did see some costs ‘stabilize’ in 2011, though they did so at historically high levels,” Ms. Parisi added. “Unfortunately, raw material trends continue to challenge the packaging industry in 2012. Flint Group addresses these by leveraging our global network of resources, expertise and forecasting and planning practices.”
“In 2011, we saw a continuation of many of the same raw materials supply issues and cost pressures that featured prominently in 2010,” said Ed Pruitt, chief procurement officer, Sun Chemical. “Rosin, solvents (particularly in Europe), acrylics, energy cure resins, carbon black, titanium dioxide, nitrocellulose, phthalocyanine pigments and Violet 23 pigments all faced at various times tight to short supply during 2011. The drivers for these supply issues and cost pressures were the same factors we wrestled with in 2010, i.e., increased demand from developing markets, feedstock issues, supply limitations and environmental and regulatory constraints in India and China.
“As we look ahead to 2012, we expect to see continuing improvement in the availability of many raw materials, but we also expect to see volatility and continuing pressure from oil and petrochemical derived products, titanium dioxide and other commodities exposed to global supply/demand swings,” Mr. Pruitt added.
“We have experienced similar raw material price and supply issues as in the publication segment,” Mr. Forker said. “However, due to the bigger diversity of applications and hence raw materials used in packaging the exposure to a specific supply-side issue - like, for instance, gum rosin - tends to have somewhat less of an impact on the overall segment than in publication.”
“There have been numerous increases in some areas such as solvent, certain resins and TiO₂,” Mr. Hill noted. “TiO₂ is in demand because it makes up a large portion of what typical solvent packaging ink printers buy.”
“Raw material cost increases abated slightly toward the end of last year,” Mr. Sickinger said. “However, with petroleum prices remaining high and the economy continuing to improve, I expect material costs to continue to rise. Availability could be a real issue when the housing market rebounds and the feedstocks find the construction industry a more attractive market than pigments and ink. TiO₂ is still a problem in terms of pricing and supply. However, any raw material price relief we are getting will not offset our prior increases and the price pressure we have gotten from customers. The ink industry has not been able to recover a fraction of these costs in this down economy, and relief is sorely needed.”
“This is our greatest impact in that our margins continued to get squeezed. It has been difficult to pass along a price increase,” Mr. Callif said.
To meet the needs of packaging converters and their customers, ink manufacturers are frequently developing new formulations.
“New products are always the result of a customer running a new press or substrate, so we are always coming up with new formulations to respond to these situations,” Mr. Sickinger said.
Mr. Forker noted that Siegwerk is launching the next generation of its highly successful low migration sheetfed-offset product line Nutripack.
“The new product is testimony for our continued dedication to deliver our customers cutting edge technology in the field of product safety and food compliance,” Mr. Forker said. “Also, as to support the protection of the environment, Siegwerk is about to launch the waterborne system UNIRICS, (RICS stands for Renewable Ink Content System), for corrugated postprint and preprint applications. The system (colored ink, white, OPV) is developed around renewable raw materials. For energy curing inks we have recently established a new benchmark in terms of low migration inks with our flexo ink UV 256. The system is designed for printing under nitrogen inertisation and it is, among other applications, particularly suitable for the demanding market of lidding material in the dairy industry.”
Tony Renzi, vice president, product management liquid inks, North American Inks, Sun Chemical, reported that Sun Chemic al has introduced a wide range of new inks for the packaging market, such as SunSpectro Sunsharp solvent-based flexo inks.
“Developed for high-speed, wide web flexo presses of bread bags and frozen food packaging, SunSpectro Sunsharp inks are high gloss, resistant to water, fats and oils, and formulated for low odor and low viscosity for enhanced color strength,” Mr. Renzi said. “SunSpectro Sunsharp HR solvent-based inks provide moderate heat resistance of up to 350°F, maintain excellent gloss, and minimize typical flexo ink defects such as dirty print, plugging, pin holing, and tracking. Its clean printing and water resistance make it an ideal choice for printing on items such as plastic bags, shampoo bottles and milk containers.”
For high-speed flexo presses, Sun Chemical’s SunStrato SB Velocity DPT-285 lamination links are designed specifically for printing on polypropylene and polyethylene.
“These nitrocellulose-base blendable inks are compatible with a wide range of adhesives, and are formulated to combat flexo dirty print, maintain high color strength and maintain good solvent release properties. These inks are suitable for printing on harder, more durable plastics, as well as mugs,” Mr. Renzi said. “As an additional way of providing value to our customers and helping them manage their costs, these inks can be sold in a package deal with our SunGraphics high definition flexographic plate technology, with Esko HD software and CDI high resolution imaging. Converters that utilize the HD printing plates can print with an image quality of up to 4,000 PPI resulting in expanded tonal range and wider color gamut to produce sharper more vibrant images and colors.”
Sun Chemical recently introduced SunBar Oxygen barrier coatings to the North American market to address the industry’s challenge to reduce waste costs and minimize packaging while still maintaining all the critical functioning properties of the packaging structure.
“SunBar Oxygen barrier coatings are designed to enable lightweighting of packaging by removing the metal foil and one layer of adhesive from packaging, as well as offering improved laminate flexibility,” Mr. Renzi noted.
Scented coatings are another new product from Sun Chemical.
“Addressing the sensory packaging needs of the industry, Sun Chemical in partnership with ScentSational Technologies, can help brand owners interact with consumers using the sense of smell through SunScent water-based coatings,” Mr. Renzi said. “Available in stock or custom aromas, SunScent coatings, can be used for all types of print and can be applied as a spot coating and done in-line. Additionally, Sun Chemical scent marketing experts can help brand owners and package printers develop a unique fragrance for their brand.”
For the corrugated market, Sun Chemical’s customers who are integrating sustainable practices into their workflow can also consider SunGraphics SunLite In-Position Plates. Shown to reduce a printer’s carbon footprint, these alternatives to conventional mounted plates are produced using up to 50 percent less photopolymer-eliminating solvents, VOCs and PVC materials.
Originally designed for commercial and folding carton printers, the Sun Chemical Dispenser Program, which helps customers decrease their overall ink spend by up to 45 percent, recently expanded to serve customers in the narrow web tag and label market.
Flint Group has been actively developing new products for packaging.
"We have announced a number of new technologies in the last several months,” said Michael Impastato, vice president, strategic marketing for Flint Group. “In Europe we released FlexiPrint MV, a laminating ink system, and FlexiStar MV, a surface printing ink system. Both provide improved printability and press stability, along with improved adhesion to chemically treated PET. These are free of monomeric plasticizers and can be easily cleaned up.There has been growing interest in low migration ink systems for food packaging due to some highly publicized food recalls in the last few years.In response to this growing concern, Flint Group has formulated low migration UV flexo inks.We have Flexocure ANCORA for narrow web applications and PackCure for wide web applications. Both ink systems meet all the low migration requirements for food packaging.
“In North America we released FlexiTech Shrink U, PamioStar Outdoor, and Biocure F,” Mr. Impastato added. “FlexiTech Shrink U is a universal solvent-based flexographic ink for shrink sleeve applications. PamioStar Outdoor is a solvent-based ink system specially formulated for outdoor applications, and provides adhesion and resistance properties not previously available in this market segment.
Biocure F is a UV ink that contains bio-renewable raw materials.”
Mr. Labertew noted that Flint Group also heightened its focus on environmentally friendly inks for sheetfed packaging.
“Most recently, we added to our ultra-low VOC ink options with Arrowstar High-Strength 4041,” Mr. Labertew said. “The inks contain less than 3% VOCs – among the lowest VOC levels available today – and earned a bio-renewable content (BRC) index of 70 from the National Association of Printing Ink Manufacturers (NAPIM). Arrowstar High-Strength 4041 inks are also ideal for perfecting, and are compliant to ISO as well as IDEAlliance’s GRACoL 7 standards. ow Migration inks and coatings are another area of interest for Flint Group, especially as folding carton printers and converters worldwide strive to meet legislative requirements, Good Manufacturing Practice guidelines and consumer demand.”
There are opportunities throughout the gamut of packaging. Ink manufacturers pointed to growth potential in flexible packaging, labels, folding cartons and corrugated.
“We continue to see big potential in flexible packaging, labels and folding carton segments going forward,” Mr. Forker said. “All three of these segments address the needs of today’s brand owners and FMCG producers.”
“Flexible packaging has always had the best growth rate, and this has been forecast to continue into the future,” Mr. Sickinger noted. “Overall, I see the greatest opportunities for any packaging converter who has new equipment and wishes to run faster with more color being applied.”
“We feel the graphics corrugated market is still poised for growth, especially in Mexico, Central and South America,” Mr. Callif said.
“The packaging market faces different challenges than other market segments, such as migration in Europe, and the push toward smaller package size, recyclability and other efforts to reduce the impact of packaging on the environment, but these challenges are great opportunities for growth at Sun Chemical,” Mr. Murray said. “We’re working with brand owners and major packaging groups to provide them with solutions for specialized packaging of the future.”
Mr. Impastato said that flexible packaging and labels will continue to lead growth in the packaging segments.
“In fact, I don’t hear flexible packaging printers talk about competing with other packaging formats, but I do hear other packaging printers discuss how they will compete against flexible packaging,” Mr. Impastato said. “In emerging economies, all packaging formats will see growth as the broader population increases its spending.”