Ink manufacturers are heavily reliant on waxes and additives suppliers to help formulate the properties that printers and brand owners require. As a result, it is a sizable market: MarketsandMarkets estimated the global value of ink additives as approximately $630 million in 2013, and anticipated a 5.78 CAGR through 2019.
In terms of specific additives, Freedonia Group places the US surfactant market at $14.4 billion and growing by 3.2% annually through 2018, driven by construction, oil and gas and personal care industries. Grand View Research suggests the global defoamer market exceeds $2 billion, with paints and coatings growing the fastest. In 2015, MarketsandMarkets estimated the PTFE wax business at $870 million by 2018.
Consolidation was on the rise in the ink industry during the past year, and the waxes and additives field also saw some interesting acquisitions.
For example, Evonik is awaiting final regulatory approval on its acquisition of Air Products’ Specialty and Coatings Additives unit, while DyStar purchased Emerald Performance Materials’ Specialties and Polymer Additives and Nitrile business groups. Bryan Haltom, business development manager for DyStar, reported that demand for waxes and additives has been consistent with slightly higher volumes in printing and packaging applications in 2016.
Leading executives in the waxes and additives segment reported that the market was fairly stable during 2016.
“Volume and demand have remained stable for waxes and additives industries, with some shifts in use within the various segments of the ink and coatings area,” said Shamrock Technologies VP Joon Choo. “Growth was driven primarily in the US market, closely followed by China.”
David Grabacki, president, Keim Additec Surface USA LLC, reported that the usage of waxes and additives is stable within customers’ formulations and follows the tendencies of the industry.
“Those customers that are benchmark in their applications were able to grow with our products,” Grabacki added.
John Jilek Jr., VP of sales for Inksolutions LLC, said that volumes in general have been down 2% to 3%, and additives have been affected proportionately.
David Towell, product manager – coatings for Michelman, reported that this year has been a solid year in the waxes and additives market for both the graphic arts and overall coatings industries.
“We believe there has been slow growth in additives for printing inks and overprints during 2016 when compared to 2015,” Towell added. “This is also true with regard to the coatings industry, which requires similar performance factors. Scratch resistance, rub resistance and abrasion resistance, anti-blocking, lubricity and water resistance are important properties for both sectors.”
“Growth of wax and additives has varied by industry over the last 12 months,” noted Kevin Quinn, surface modifiers product manager, Lubrizol Advanced Materials. “Demand for wax-based lubricating products in the ink and graphic arts industry remained flat vs. previous year compared to traditional paint and coating applications, where demand for wax-based lubricating products exceeded the normal growth.”
“For Kustom, it’s been a busy year with the continued growth of our wax compound and additive product line,” said Jerry Trauth, product manager wax/ink applications for Kustom Group. “There was a need to expand our facility, and that work is now complete. Overall, Kustom has increased our market share and expects continued growth.”
Key Trends in Graphic Arts
It is not a surprise that waxes and other additives are seeing the most growth from the packaging ink segment. Grabacki observed that the graphic arts industry is quite often focusing on the development of printing systems for the packaging industry “This means printing on sensitive plastic substrates, absorptive substrates or on paper of lower quality,” Grabacki added. “This places high expectations on additive performance. The Keim Group is the globally recognized source for solutions with its wax based and non-wax based Silcona additives.”
“The most notable trend in graphic arts has been the demands of packaging printers,” Jilek said. “Various converters and their customers are requesting inks that meet certain criteria; largely Nestle 2014 guideline approved, Swiss Annex 6 and Prop 65 have been the guidelines to formulate within. Reviewing this list has found items that have been used in the past that no longer are on these approval lists and this is demanding change where needed to all products, especially additives.”
Choo said that environmentally friendly waxes and additives are in demand.
“The continued push towards environmentally friendly and sustainable products remains a key driver in customers reformulating new product platforms,” Choo observed.
“We are seeing more requests for products that are targeted for food packaging,” said Quinn.
Rebecca Marshall, sales and marketing associate, Coating Additives at Evonik Corporation, said that inks should be multi-functional, and additives play a role in achieving this capability.
“They need to give good color, provide scruff resistance, have good barrier performance, etc.,” Marshall said. “Better dispersants are needed for increased color strength demands. Print speeds are steadily increasing, and as always, environmental concerns are a factor.”
Haltom said that digital printing is a growing field.
“Traditional printing continues to decline, but inkjet printing continues to grow at a noticeable clip,” said Haltom. “There is always a desire to improve speed of printing and subsequent processing of the printed substrate, especially flexography.”
“We continue to observe the trend of suppliers moving out of the offset ink market,” said Trauth. “Kustom has tried to fill that void through expanded product lines for this segment of the market.”
Towell said that while there are continued pressures to keep costs under control, customers are asking for better durability and rub resistance.
“Packaging applications with attractive graphics require better performance in keeping brand images sharp and appealing,” said Towell. “There is also a movement toward more sustainable ingredients which will perform as well as traditional materials in key applications such as rub resistance. While these renewable materials are slowly coming to market, not only must the performance standards be met, but they must be economically feasible.
“Companies are continuing to become more and more focused on meeting the Swiss Chemicals Ordinance and navigating the evolution of European and China REACH requirements and the many growing number of country inventories,” Towell added. “Digital printing and packaging are the most attractive sectors of the printing ink market. The technology base is strong in the US while rapidly growing in China and India.”
The ink industry is facing more regulations, particularly on the packaging side, and waxes and additives suppliers are being asked to help their ink customers meet these demands.
“There has always been a concern from customers in our industry on regulatory issues,” Choo said. “There is an increased sensitivity to media and public opinion on safety and the environment. China, for instance, is making strides in enforcing regulation of chemical industries to achieve improved air quality standards.”
“Regulatory issues are always a top priority for customers’ requirements in their raw materials selection process” Grabacki said.
“The Keim Group’s EQHS Team closely monitors all regulatory issues globally in order to maintain our high level of customer support.”
Haltom noted that California Prop 65 is causing concerns in for ink manufacturers and suppliers.
“Prop 65 rules have affected the way our customers have approached their formulations, as they have found that many of the components they were using are now on the excluded list,” said Haltom. “A good example is ethylene oxide used in several slip and mar additives. APEO-free, 100% active products are in demand. While a customer may have an additive that meets one regulation, finding one that meets a particular combination of FDA, Prop 65, etc. can be a real problem, especially since formulators don’t want to have a different ink for every application.”
“The increased demands for complete formulation compliance for both food contact and suitability for country inventories have forced many graphic arts companies to expend considerable resources on meeting the requests for more transparency and disclosure,” Towell observed. “These challenges have also been pushed back into the supply chain to navigate the various regulations.”
“Labeling changes mandated by the new GHS regulations have created some concern within our customer base and challenges within our technical community to select raw materials that will eliminate requirements for sensitive pictograms on product labels,” said Quinn. “Supplying globally compliant products for food contact applications is becoming increasingly difficult as a result of regional specifications including the Swiss Ordinance, Nestle’ Guidance Note on Packaging Inks, EU 10/2011 directive, China GB9685, etc.”
“Confirming compliance with suppliers for the various raw materials presents a big challenge,” Trauth said. “We continue to receive many inquires concerning the various regulatory and compliance issues. Gathering information concerning compliance is very time consuming, but must be done.”
There are plenty of concerns for the ink industry, and waxes and additives manufacturers are looking at ways to help their customers.
For example, Jilek said that a major challenge is taking on the new demands of packaging converters with the expectation that cost will not increase.
Choo said that given the tight global competition, customers have required improvements in the delivered cost and efficacy of additives.
“Working on improving local on-time product deliveries and new technologies to accomplish these guide our focus in our core products for graphic arts and coatings,” added Choo.
Grabacki said that speed to market with new inks requires suppliers to work equally quickly.
“Customers are being required to turn new ink developments into commercialized products at record speed,” Grabacki said. “The Keim Group’s Technical Support Team assists them with every step of the process including additives. In a market with high competition, our customers rely on us for increased formulary performance at very competitive pricing.
Trauth reported that help and support with everyday problems are still very important.
“Whether they are calling from their lab or the pressroom, a live body they can reach for immediate technical support is vital,” Trauth added. “Also high on the list is turn around on orders, more pack out options to choose from, and support with occasional rush orders.”
“Meeting regulatory hurdles without sacrificing performance is our most frequent request,” said Haltom.
“Our customers expect, and frankly demand, high quality products that fulfill a wide variety of performance and regulatory requirements at competitive prices,” said Quinn. “Our challenge is to continue to invest in R&D and product development while trying to create cost competitive products.”
Towell noted that customers are looking for better rub resistant additives that have regulatory compliance and food contact.
“In new printing and overprint applications, better rub resistance keeps high performance packages looking neat through processing, transportation and handling,” Towell noted. “Customers are asking for emulsions that improve durability, anti-blocking and water resistance.”
Raw Material Concerns
Waxes and additives manufacturers indicated that the problems with raw material supply and availability have abated in recent years, and that there are few if any raw material concerns.
“Raw material prices and availability have remained stable over the past 12 months,” Choo said.
Grabacki said that 2016 did not come up with real concerns, nor does Keim Additec see any on the immediate horizon.
“Raw material availability and cost development were following the market rules,” Grabacki added. “However, these were less affected by the low oil price.”
Trauth said that raw material supply and pricing has been stable for the most part this year, although availability with some raw materials has been unpredictable. “However, reduced capacity, suppliers leaving our market and consolidation are an ongoing concern.”
“Generally, we have been able to maintain controls on raw materials cost, though pressure is mounting,” Towell said. ‘Supply has also been good with the possible exception of some synthetic waxes, where there has been sporadic tightening of supplies.”
“Supply of petroleum-based wax products has been and continues to be tight as manufacturing processes have been optimized to minimize the isolation of these components,” said Quinn. “This is creating opportunities for unique raw materials and demanding new processing techniques in order to supply lubricating additives without compromising film appearance or properties.”
“Overall, market supply and availability of raw materials are not major issues,” said Haltom. “Since oil prices have stabilized, the conversation with customers is now back on performance rather than feedstock prices.”
Outlook for Waxes and Additives
Waxes and additives suppliers say that all things considered, they are optimistic about the graphic arts market heading into 2017.
“Together with our key customers and distributors, the Keim Group continues to respond to market demands by broadening our global position with our continuously expanding product portfolio and offering customized additive solutions” Grabacki said.
“The specialty chemical business of Emerald Performance Materials was just purchased by DyStar, so we look forward to integrating under the DyStar banner while continuing to provide innovative solutions to customers.” Haltom said. “We believe that the traditional and digital ink industry is a great fit for our competencies in providing technical solutions that address performance gaps and meet regulatory concerns.”
“We expect 2017 to be an interesting year as we have a new administration in the US and some uncertainty about the future subsides,” Towell said. “We expect the digital ink market to remain strong. If petroleum prices rise further, we could see an impact on raw materials.”
“We are expecting growth with our new HQ products,” Jilek said.
“With available capacity on the wax compound and additive side, we plan to take an aggressive approach in gaining additional market share. We are also in the early stages of developing wax dispersion products for water-based inks,” Trauth said.
“The strong US dollar continues to impact the way business is conducted, and represents opportunities for international companies with global supply chain and local manufacturing capabilities,” Choo said. “Shamrock expects 2017 to be a year of continued investment in our plants globally to support product development and manufacturing in regional markets.”