“I don’t believe I would call it a recovery, but our graphic arts business appears to have stabilized over the past year,” said Ron Levitt, regional sales leader at Shamrock Technologies. “Business toward the end of the year picked up, and we see this continuing in the first quarter of 2013.”
“From a water-based ink perspective, wax additive losses for inks on packaging were not so significant that you could claim a significant recovery,” said Alan Kalmikoff, president of Keim Additec Surface USA, LLC.
“We have seen improvements in some areas of our graphic arts business,” said Patrick J. Heraty Jr., key account manager, coating additives - Tego, Evonik Goldschmidt Corporation. “Packaging and inkjet applications have increased. Publication continues to trend downward as expected.”
“For Kustom Group, the overall graphic arts side of our business slipped a little in 2012, but the additives part of our business continued to show some growth,” said David Aynessazian, vice president sales and marketing, Kustom Group. “At Kustom Group, we consider a product used at a level of less than 5% of a formulation to be an additive. Additives can help to push an ink to perform in a specific way that the printer requires without having to completely reformulate. No ink type is immune from a need for an additive regardless of chemistry (oil-based, aqueous or energy cure) or press configuration (flexo, offset, screen, gravure, spindle, pad or inkjet). The result is that additive use increased in 2012.”
Growth Areas for Additives
There are a number of areas of interest for ink manufacturers, and additives suppliers are working to deliver products that will help their customers meet their needs.
Alex Radu of Shamrock Technologies’ Product Marketing Center said that flexible packaging is one of the strongest areas of interest.
“The main growth area for the ink industry will be packaging, mostly flexible,” Mr. Radu said. “It is an exploding segment, driven by the general consumer trend of food and drink pouches becoming smaller and smaller.”
“Our strong customer focus provides Shamrock the ability to listen to our customers to develop innovative products to meet their needs,” Craig Baudendistel, director of sales at Shamrock Technologies, added. “Delivering value added performance-based products are key to meeting our customer’s expectations.”
“Our company has been very active in the REACH initiative overseas and in complying with those requirements on this side of the pond as well, so that customers who have global interests or aspirations have little to fear when using materials from Keim-Additec Surface,” Mr. Kalmikoff said.
Mr. Heraty noted that packaging and inkjet are two of the areas Evonik expects to continue their growth path.
“The need to differentiate a commodity item is pushing for more varied and eye-catching packages,” Mr. Heraty observed. “Brilliant colors, metallic sheens and special effects all require unique solutions by the printing ink manufacturers. And of course, the more environmentally friendly these inks, the better. Inkjet technology offers the ability to efficiently customize anything, from a circular in the newspaper to a bread wrapper. The combination of speed and target marketing of a product is a great tool for the manufacturer.”
“We see two trends in the market; first is toward more ‘green’ products which have lower VOCs, less odor and less objectionable chemicals in them, and secondly, a trend toward products with greater utility for multiple uses in different applications,” Mr. Aynessazian said.
“The reemergence of ‘green’ has been driven by packaging print buying companies who are insisting that the packaging that they are using for their products contain only a specific list of chemicals on them and are lower in residual odor,” Mr. Aynessazian noted. “To comply with these new restrictions, suppliers to ink makers have to develop new products which offer similar performance while following these new rules.
“Other ink raw material buyers are pushing to consolidate the number of products that they purchase and the number of suppliers that they deal with as a way of reducing inventory dollars,” Mr. Aynessazian added. “This is forcing producers to look at their products in a new way. We all have to ask ourselves, ‘besides the intended purpose of my product, what else might it be used to do.’ This has caused many to slightly modify products so that other uses may be possible, which offers the added utility to the customer that they are looking for.”
Concern over pricing and supply of raw materials subsided somewhat during the last year, but regulatory issues are becoming more of an issue.
“The past year has seen some waxes become more available again versus the severe shortages of the previous few years; some of their costs continue to rise but there is more stability than has been seen in previous years,” said Melanie McCarroll, director of operations/purchasing at Shamrock Technologies. “Shamrock's years of multiple sourcing of a wide range of wax raw materials balanced with its commitment to having materials in place for our customers' needs remains one of our top priorities.”
“Generally, pricing and availability were better in 2012 versus 2011, but as additives are only a small portion of the ink and make a huge difference in performance, typically the price pressures on these materials are not as intense as for those materials that encompass the other 95+ percent of the formulation,” Mr. Aynessazian said. “The bigger issue for the additives market lately has been increased regulation. Regulations like REACH, Swiss Ordinance and EUPIA have forced many raw materials out of the market as the cost of registering and testing some materials is simply too high for the small amount of sales they produce regardless of how unique they are. As a result, even in the additives business, it is necessary to find a way to do more with a smaller stable of chemical choices. To cope, Kustom Group has had to partner with our suppliers in an even greater way to jointly understand the market for a given material and find multiple uses to increase the volume used to help assure a continued supply.”
Being innovative while controlling costs is a major challenge throughout the additives market.
“A key challenge for Shamrock is to continue to develop new and creative products that will give customers new tools to use in their new innovations,” Mr. Levitt said.
“Continuing to be innovative and differentiated while addressing customer requirements is the challenge we face everyday,” Mr. Kalmikoff said. “Our company has been very innovative in both addressing the chemistry and the technology to do both.”
“Cost-effective performance is of course a major challenge,” Mr. Heraty added. “Printing ink manufacturers need to offer their customers cost-effective solutions. Evonik TEGO products are designed to work at low levels to provide the most ‘bang-for-the-buck.’ The cost of a raw material itself is immaterial; it is the formula cost of the ink that matters. Highly effective products that provide performance benefits add value to the printing ink and help our customers win the battle at their customers."
Mr. Heraty noted that regulatory issues are a challenge for additives manufacturers.
“The continued effects of regulation, and differences in regulations, will be a major challenge for the foreseeable future” Mr. Heraty said. “From FDA to REACH to Swiss List compliance, it can be difficult to supply a global customer with a global product. Evonik TEGO’s regulatory groups assist our customers by providing the required information to insure that their product meets compliance requirements across the globe. This enables the printing manufacturer to develop global product platforms, minimizing their SKUs and increasing their manufacturing and logistic efficiencies.”
Communicating with customers is essential, and Mr. Aynessazian said that Kustom Group is placing great emphasis in that area.
“A major challenge for additives manufacturers is communicating with our customers,” Mr. Aynessazian said. “Today, with the ability of people within organizations to communicate with each other from around the world, decisions about formulating products can come from anywhere on the globe. It is important to be able to find ways to let those decision makers know that you have answers to solve their problems and to offer detailed instructions about how the products are used. Kustom Group has been employing a multi-layered strategy to making this possible around the world. Kustom has dramatically upgraded our website, has completely overhauled its product catalogs and has opened up communication channels with our customers via Skype and conference calls.”Expectations for the Coming Year
All things considered, additives manufacturers are anticipating growth during 2015
“We anticipate that 2013 will be a slow and steady growth year for packaging, and that ink and their raw materials will follow suit,” Mr. Kalmikoff said.
“We hope to see continued, broader improvement in the NAFTA market,” Mr. Heraty said. “With business being so global now, much of this is dependent on the situation in Europe stabilizing. We remain cautiously optimistic.”
Mr. Aynessazian said that Kustom Group expects 2013 to be a good year.
“We have projected a significant increase in sales as some of the new products that we recently introduced to the market start to go from the lab evaluation stage to adoption by our customers,” Mr. Aynessazian said. “We offer many unique additive materials that are finding homes in more and more formulations.”
Mr. Levitt said that Shamrock Technologies is very optimistic about 2013.
“The beginning of the year started off strong” Mr. Levitt said. “We have a number of new products in our pipeline, and we have placed a strategic focus on business growth through product and technology development in line with market and customer needs. Business in the beginning of 2013 has been encouraging, and we expect this trend to continue.”
For more information on the additives market, including the latest news on raw materials as well as major challenges, see the online version at www.inkworldmagazine.com.