The resin market has been, to choose a word, volatile in recent years. Dramatic price swings for important raw materials have become the new normal, making planning difficult for resin suppliers and their ink customers alike.
However, availability and supply are perhaps more problematic. Some resin and rosin suppliers have left the ink market, while others are looking to reduce their supply.
For Arez LLC, the ink industry represents an opportunity, and rather than reduce its presence in the market, Arez is expanding. A subsidiary of Arez International, Ltd., which is headquartered in Waterford, Ireland, Arez LLC built a new state-of-the-art resin manufacturing plant in Crossett, AR. The plant is designed to produce more than 30 million pounds of resins for the North American lithographic and publication gravure printing ink markets.
For Arez, the decision to build resin manufacturing facilities in the U.S. came as its Chinese operations drew more business in the Asia Pacific and Europe. U.S. ink manufacturers wanted to ensure that there would be production for their needs as well, and also wanted to eliminate the uncertainty of ocean transportation.
“Capacity in the China operations was being committed to Asia Pacific and Europe, and we had been asked by several customers to commit to larger U.S. volumes made in the USA,” Arez LLC president John Smith said. “We needed a position in the U.S. We are displacing our Chinese-based materials with our U.S.-based production.”
The resin market has undergone tremendous upheaval in terms of raw material costs and availability. Mr. Smith said that the new Arez plant in the U.S. will help the company meet these challenges.
“The world-wide gum rosin price run- up of the past few years will not soon be forgotten,” Mr. Smith said. “As an example, we began in 2005 with rosin at $425/mt and rose over five years to $3,500/mt. The Crossett operation is designed to use rosin of many types to mitigate rosin price moves. We can also use Arez China’s buying of other raw materials to improve U.S. costs. Our U.S. customers will also benefit from just-in-time service.”
Crossett is an ideal location due to its proximity to the raw material it needs, most notably rosin, as well as being in a centralized position to supply Arez’s customers.
“The location is central to several sources of our major raw material, rosin, and is near to our major market area,” Mr. Smith said. “The State of Arkansas and the Economic Development Committee of Crossett worked together to offer an excellent incentive package, and we have available land contiguous to the Crossett plant should expansion be warranted.”
The Crossett plant is up and running, no small feat considering the state of the economy.
“It is an impressive plant, different from the ones we built in China because we have used new ideas to improve the process,” Mr. Smith said. “We are working to get up to speed. We want to make extra sure everything is running perfectly for our customers.”
Arez is using pine chemicals derived from raw materials from the forestry sector (wood, pulp and paper processes) as its primary raw material as opposed to hydrocarbon-derived feedstock.
“It is a pleasure to be able to offer products based upon universally accepted, environmentally friendly raw materials. These products are part of the environmental solution, not the environmental problem,” Mr. Smith said.
Once the Crossett plant was operational, Arez needed to get samples out to customers to make sure the new resins met their specifications.
“We had a big flurry of activity when we first opened as we got production samples out to our customers,” he said. “After a lull while testing was going on, everything is now going well.
“Product acceptance has been very good,” Mr. Smith added. “The first runs of each product needed to be trialed down-stream, and our customers have been very helpful to us during our start-up time. They are letting us know if there are any differences as well as what their specific requirements are. The results were what we all hoped for.”
Mr. Smith said that despite the economic struggles of the printing and ink industries, Arez is successfully moving forward with its plans.
“Arez was looking forward to better economic times when the facility opened,” Mr. Smith said. “We had predicted that the economy would be in recovery mode when the plant came up, and it hasn’t happened yet. However, even in today’s business conditions, our customers are supporting the ramp-up of Crossett. I am optimistic.”