Consolidation, Changing Technologies are Key to Vehicles and Varnishes Market

By David Savastano, Editor | 08.01.14

UV and water-based technologies are continuing to gain share in the marketplace.

The varnishes and vehicles market has changed over the years. Some of the larger ink manufacturers have added their own varnish capabilities. Meanwhile, some vehicle and varnish manufacturers have left the market.

In a major move in April 2014, Kustom Group and Lawter announced the transfer of Lawter’s varnish business to Kustom Group, which will produce, market and sell these varnishes in North America and the Caribbean. Lawter also permanently closed its LaVergne, TN manufacturing facility. That follows on Kustom Group’s 2010 acquisition of VarChem Products LLC from Sun Chemical.

 By making this acquisition, Kustom Group adds Lawter’s brands to its portfolio, while also adding purchasing synergies.

“Lawter has been the bellwether of the industry for many decades,” said Michael Gerkin, Kustom Group’s president and CEO. “So when they approached Kustom about the potential of us buying the varnish business so that they could concentrate on their resin and alkyd business, we were excited about the opportunity. Adding names like Cinergi, Uroset, Luminex, Halex, 100S and A1407, among many others, to Kustom’s stable of products gives us a larger footprint in the North American ink market.”

“Kustom Group showed our commitment to the ink industry with the purchase of Lawter in May of this year,” said Mike Cuppari, sales and marketing manager for Kustom Group.

“With Kustom’s recent purchase of the Lawter vehicle line, we are excited to add names like Cinergi, Uroset, Luminex, Halex, 100S and A1407, among many others, to Kustom’s stable of products, which include the VarChem line of vehicles which was acquired in 2010,” added Jerry Trauth, product manager ink applications, Kustom Group. “With these acquisitions, Kustom continues to expand and gain a larger footprint in the North American ink market.”

The market for vehicles and varnishes remains sizable. Cuppari said that Kustom Group’s best estimate of the vehicle and varnish market is around 21,000,000 pounds per year, broken up fairly evenly between water-based, oil-based and UV-based technologies, with the percentages of water-based vehicles and varnishes slightly at 40%.

Matt Grodd of Kane International estimated that water-based technologies are the majority of the vehicle and varnish market.

“UV is growing in publication (magazine print, advertisement, etc.) and I would guess now has 20% of the market,” Grodd said. “Oil-based is about 25% of the market, still dominating the newspaper print business, with water making up 55% (a huge portion of the water market being printed board stock).”

Cuppari and Grodd said that in particular, the UV and water-based markets are showing growth.

“In the past few years, we are seeing some movement from oil-based products towards water and UV,” Cuppari said. “This is due to the trends to become greener by reducing the use of materials that contain VOCs. We also see future growth in Low Migration type products. With the construction of our new facility to produce Nestle Compliant and Swiss Ordnance materials, we are ready to meet the need for these products.”

“For high end good appearance, the UV market is growing, but for the majority of the low end work, the water technologies are moving ahead for cost reasons,” he added. “Only those printers with solvent recovery will resist water due to its impact on their recovery systems.”

Challenges in the Market

Ink formulators are being tasked with meeting new requirements from printer. As a result ,vehicle and varnish manufacturers are being asked to solve many challenges by their customers.

Trauth said that Kustom Group is putting emphasis on staying current from a technical, regulatory, and compliance perspective, to be a partner to customers and an accessible resource they can tap when needed.

“Regulatory requirements are changing quickly, including new GHS Safety Data Sheet (SDS) and labeling requirements on the horizon, along with other compliance issues,” Trauth added. “Offering vehicles and support that solves our customers’ technical problems with products that meet the various regulatory legislations worldwide, or end-use restrictions such as low migration and Nestle compliance are important. Kustom has made a commitment to better understand and keep up with the various restrictions and requirements to be another resource to our customers in that regard.”

“Vehicles are required to print fast with good color strength and over prints are required to cure at low temperature with high performance (gloss, rub resistance, chemical resistance etc.) all at a low price,” Grodd said. “Press speed is a critical issue.”
 With more domestic ink manufacturers either producing their own varnishes or bringing their materials in, vehicle and varnish manufacturers are developing specialty coatings to meet their customers’ needs.

For example, Kustom Group has developed its KB-5001/KB-5000 Nestle compliant sheetfed gel and its KS-230/KS-240 UV/EB Nestle compliant gel for plastic, among its new offerings. Kustom Group has also developed UV LED products, including LED-200 LED Litho Photoinitiated Extender and LED-300 LED Flexo Photoinitiated Extender, as well as KS-304 UV/EB High Viscosity, Fast Cure Dispersion Vehicle.

“In 2013 many of the domestic ink makers produced a large portion of their ink outside of North America to supply the U.S. needs,” Cuppari said. “We see this trend continuing in 2014. This resulted in a double-digit decline in the vehicle and varnish market in 2013, and we expect this segment to be down again in 2014.

“With this downward trend in the vehicle/varnish market at Kustom, we are focusing on a growing interest in specialty coatings,” Cuppari added. “We have developed and continue to develop specialty water, UV, and LED coatings to meet the growing needs for these products.”

Eventually, the varnish industry will find a floor where the volumes will stop decreasing and will flatten and potentially increase,” Gerkin concluded. “Until that time, the varnish industry will continue to consolidate to right-size itself for the graphic arts market it serves. Kustom Group feels that it is important that our customers understand that Kustom will be here for the long haul. We want to give our customers confidence that their partner, Kustom Group, will be available to them as they deal with future challenges.”.

Related Raw Materials: