Arnold Wang, China Correspondent03.09.18
The landscape of China’s ink industry is relatively stable, with foreign companies still holding most market share. But with small- or middle-sized printing companies spread throughout China, domestic ink companies are taking advantage of their flexibilities and efficiencies and growing their businesses in niche markets and regions.
The total market share of traditional gravure and offset inks is still approximately 80%, and the market share of flexo ink has grown slightly to 12%. In addition to the pricing increases for raw materials, ink manufacturers also face continuous market softness for newspaper printing and more pressure from increasing environment protection standards and regulations.
The market trend for sure is that environmental protection will affect all printing ink companies’ market strategies in China, and it will be a major theme running through the printing ink business in the future.
China is Legalizing Environmental Regulations
On Jan. 1, 2018, China implemented a new environmental tax policy, effectively ending the pollutant discharge fee. All tax income will be retained by local governments, meaning the local governments have more willingness to enforce this new policy. In addition, one change from the previous policy is that firms that pollute 30% to 49% less than the standard receive a 25% tax reduction.
However, under the tax system, failure to pay can result in a fine up to five times the tax.
Local authorities can decide their own tax rates applicable, within the range presented by the central government.
Regions with large manufacturing bases normally set their tax rates low. For example, Beijing, under huge pressure from the central government and the public for improving air quality, has the highest tax rate in China. On the contrary, Guangdong, Zhejiang and Fujian, among others, have relatively low tax rates in order to remain attractive locations for manufacturing investments.
The release of more environmental regulations does not stop new investments from pursuing market opportunities. Sakata INX broke ground on a new plant in Maoming, Guangdong province, in late 2017. The new plant, with a total investment of 150 million yuan, will manufacture offset ink that is used mainly for commercial printing such as books, posters and catalogs.
Sakata INX’s new plant will produce environmentally friendly inks with natural materials such as soybean oil and rosin resin, and will be put into operation in 2019.
Flexo and EB Inks
Flexo ink is still applied mainly to corrugated paper printing, holding a 90% share of this market. Corrugated paper packaging is mainly used for transportation, but in China, corrugated packaging also plays the function of marketing, especially in the food and beverage drink market segment, mainly because of Tetra Pak’s huge success in China. As a result of this, flexo printing also has important marketing promotion functions in the local market.
On the contrary, in flexible packaging, flexo printing does not have as many successes as it has had in western markets, resulting in a limited flexographic printing ink market share growth in China.
The resolution from flexo printing is not as high as that from gravure printing, putting flexo printing in a weak position in competition. Besides, waterborne gravure ink is being introduced actively in the market.
If adoption of waterborne gravure ink is faster than that of flexo ink in China, the development of flexo ink could be restricted. One thing for sure is that flexographic ink will take more market share from gravure ink in the flexible packaging market in the future, with technology advantages such as thinner ink film for printing, faster printing speed and more accurate printing.
Growing Interest in EB Printing in China
Until recently, EB printing has been rarely mentioned in the China market for commercial use.
On Nov. 29, 2017, Shaanxi Beiren Printing Machinery Co., Ltd launched its FOE-CI350 satellite EB printing machine, making EB printing a hot topic in the industry.
EB printing has many benefits, and according to Xue Zhicheng, technical director of Beiren, their EB printing machines cost much less than foreign brands. But the investment for purchasing EB printing machines is still relatively intimidating for middle- and small-sized flexible packaging companies, and EB curing devices are still mainly controlled by foreign brands such as Energy Sciences and Ebeam.
One reason for some companies to consider investing into EB printing is to free themselves from environmental issues and extra costs needed to deal with releasing pollutants, because EB printing has no volatile organic compounds (VOC) release.
The other reason is that these companies require flexible and cost efficient printing machines because their businesses focus on short and individual orders, and gravure printing has high costs related to plate-making and switching one order to another.
Besides, the price of EB printing inks is relatively high, and EB printing still depends on imported inks. Several domestic ink producers have begun their development and production of EB inks, but they need some time to catch up.
EB printing is a relatively new market in China, but it may provide a new breakthrough for those printing companies who are under pressure for changing their traditional printing approach. It will take some time for the flexible packaging market to evaluate whether to choose this direction or decide against it.
Despite all the difficulties that lie ahead for the development of flexo inks, EB inks or UV inks, the right time for growing the environmental friendly ink market is coming in China. For those companies that want to be successful in this market, they will need to take necessary actions.
The total market share of traditional gravure and offset inks is still approximately 80%, and the market share of flexo ink has grown slightly to 12%. In addition to the pricing increases for raw materials, ink manufacturers also face continuous market softness for newspaper printing and more pressure from increasing environment protection standards and regulations.
The market trend for sure is that environmental protection will affect all printing ink companies’ market strategies in China, and it will be a major theme running through the printing ink business in the future.
China is Legalizing Environmental Regulations
On Jan. 1, 2018, China implemented a new environmental tax policy, effectively ending the pollutant discharge fee. All tax income will be retained by local governments, meaning the local governments have more willingness to enforce this new policy. In addition, one change from the previous policy is that firms that pollute 30% to 49% less than the standard receive a 25% tax reduction.
However, under the tax system, failure to pay can result in a fine up to five times the tax.
Local authorities can decide their own tax rates applicable, within the range presented by the central government.
Regions with large manufacturing bases normally set their tax rates low. For example, Beijing, under huge pressure from the central government and the public for improving air quality, has the highest tax rate in China. On the contrary, Guangdong, Zhejiang and Fujian, among others, have relatively low tax rates in order to remain attractive locations for manufacturing investments.
The release of more environmental regulations does not stop new investments from pursuing market opportunities. Sakata INX broke ground on a new plant in Maoming, Guangdong province, in late 2017. The new plant, with a total investment of 150 million yuan, will manufacture offset ink that is used mainly for commercial printing such as books, posters and catalogs.
Sakata INX’s new plant will produce environmentally friendly inks with natural materials such as soybean oil and rosin resin, and will be put into operation in 2019.
Flexo and EB Inks
Flexo ink is still applied mainly to corrugated paper printing, holding a 90% share of this market. Corrugated paper packaging is mainly used for transportation, but in China, corrugated packaging also plays the function of marketing, especially in the food and beverage drink market segment, mainly because of Tetra Pak’s huge success in China. As a result of this, flexo printing also has important marketing promotion functions in the local market.
On the contrary, in flexible packaging, flexo printing does not have as many successes as it has had in western markets, resulting in a limited flexographic printing ink market share growth in China.
The resolution from flexo printing is not as high as that from gravure printing, putting flexo printing in a weak position in competition. Besides, waterborne gravure ink is being introduced actively in the market.
If adoption of waterborne gravure ink is faster than that of flexo ink in China, the development of flexo ink could be restricted. One thing for sure is that flexographic ink will take more market share from gravure ink in the flexible packaging market in the future, with technology advantages such as thinner ink film for printing, faster printing speed and more accurate printing.
Growing Interest in EB Printing in China
Until recently, EB printing has been rarely mentioned in the China market for commercial use.
On Nov. 29, 2017, Shaanxi Beiren Printing Machinery Co., Ltd launched its FOE-CI350 satellite EB printing machine, making EB printing a hot topic in the industry.
EB printing has many benefits, and according to Xue Zhicheng, technical director of Beiren, their EB printing machines cost much less than foreign brands. But the investment for purchasing EB printing machines is still relatively intimidating for middle- and small-sized flexible packaging companies, and EB curing devices are still mainly controlled by foreign brands such as Energy Sciences and Ebeam.
One reason for some companies to consider investing into EB printing is to free themselves from environmental issues and extra costs needed to deal with releasing pollutants, because EB printing has no volatile organic compounds (VOC) release.
The other reason is that these companies require flexible and cost efficient printing machines because their businesses focus on short and individual orders, and gravure printing has high costs related to plate-making and switching one order to another.
Besides, the price of EB printing inks is relatively high, and EB printing still depends on imported inks. Several domestic ink producers have begun their development and production of EB inks, but they need some time to catch up.
EB printing is a relatively new market in China, but it may provide a new breakthrough for those printing companies who are under pressure for changing their traditional printing approach. It will take some time for the flexible packaging market to evaluate whether to choose this direction or decide against it.
Despite all the difficulties that lie ahead for the development of flexo inks, EB inks or UV inks, the right time for growing the environmental friendly ink market is coming in China. For those companies that want to be successful in this market, they will need to take necessary actions.