David Savastano, Editor03.24.22
Just when the it looks like the supply chain situation can’t get any worse for virtually the entire world of business, including the ink industry, it becomes even more chaotic.
Back in November 2021, when I last wrote a blog post on raw materials and logistics, I reported on shortages in key materials, rising oil prices, natural disasters, transportation and logistics, and the beginnings of inflation.
Now? Inflation is rising fast; the US Inflation Calculator places inflation at 7.9% since February 2021.
Transportation hasn’t fared well: according to AAA, the average price of gasoline is $4.236/gallon as of March 24, 2022. That’s at least $1 more per gallon than a year ago.
Then there is the war in the Ukraine, with Russian forces attacking Ukraine and much of the rest of the world imposing sanctions on Russia, including its crude oil industry. This is having an impact at the gas pumps and manufacturing.
Some key raw materials - pigments, resins, solventds and additives, among others - continue to remain scarce, and those that are available are seeing higher prices.
The printing industry is having all sorts of headaches. Paper companies are raising prices, and ink companies have no choice to do so as well. Meanwhile, ink companies are trying to mitigate these costs as best as possible, but some companies are announcing price increases and surcharges. As I have noted previously, many companies don’t officially announce price increases, but I have heard unofficially from a number of companies that they have also had to move on prices.
These are just the announced increases in the last three months.
• hubergroup Print Solutions: hubergroup Print Solutions announced its price increase in early March 2022; the price increase applies to all segments, including sheetfed/UV and web offset as well as flexo and gravure products, and will vary by product.
“The situation on the raw material market is not easing, but instead continues to worsen,” said Heiner Klokkers, CEO of hubergroup, in announcing the price increases. “The printing ink industry is severely affected by the increased costs for transport and raw materials such as pigments, resins or solvents. To ensure that we can continue to supply our customers with high-quality products in the future, it is unfortunately unavoidable that we reflect the increased procurement costs in the prices of our products.”
• Sun Chemical and DIC Corporation: Announced an energy surcharge on the entire Color Materials portfolio, effective from April 1, 2022, as well as a separate announcement on Feb. 1, 2022 reporting that it increased prices across parts of its pigments, dyes and preparations portfolio.
“Our priority remains to keep supplying our customers, allowing them to keep their facilities operating,” said Stefan Sütterlin, president, Global Color Materials, in announcing the surcharge. “However, the magnitude of recent energy related inflation cannot be absorbed and requires us to implement surcharges. The situation will need to be adjusted as it goes, and we can assure our customers that surcharges will be phased out as the situation allows.”
• Flint Group Commercial Publication Web Division: In early February 2022, Flint Group’s Commercial Publication Web Divison announced surcharges. That followed increases across the company’s heatset ink, news ink, sheetfed ink, transfer media and pressroom chemical portfolios that were announced in January 2022.
“The first responsibility of a supplier is to meet its obligations to its customers for provision of required volumes to maintain the integrity of the supply chain,” said Tony Lord, president of Flint Group Commercial Publication Web Division, in making the announcement of the surcharges. “To meet this requirement, we have been successful in responding to the post pandemic’s unprecedented disruption in both global raw material and energy markets by ensuring both product and energy availability to meet our customers’ demands. This has, however, been at previously unparalleled price levels across our entire portfolio of raw materials and manufacturing locations.
“Regrettably, the hoped-for stabilization in both raw material availability and pricing has failed to materialize so far in 2022 with products remaining scarce and their pricing continuing to escalate accordingly,” Lord added. “This, coupled with the exponential increase in energy tariffs, has created a situation where current selling price levels for our products are simply not sustainable.
“To respond to this sudden rise in costs, we feel the sensible approach is to avoid a general price increase and apply a monthly surcharge whilst awaiting further market developments," Lord noted. "To this end, effective for deliveries from March 1st 2022, surcharges to recover these recent cost increases will be applied across our entire publication ink portfolio so that we can maintain supply to our customers.”
• Flint Group Packaging: Flint Group Packaging announced on Feb. 7, 2022 that it will increase the prices of all its packaging products sold by the Flexible Packaging, Paper & Board and Narrow Web businesses.
“The security of supply is our number one priority,” Doug Aldred, chief commercial officer – Flint Group Packaging, said in the announcement. “Due to our extensive global network and efficiency programmes, we are able to mitigate a significant portion of cost and supply risk. However, we continue to witness tightening supply and exponential cost increases. Despite implementing an extensive range of efficiency programs to mitigate these conditions, we are reluctantly compelled to raise prices.”
• Sun Chemical: On Jan 14, 2022, Sun Chemical announced it will increase prices across its entire lines of packaging, commercial sheetfed and screen inks, coatings, consumables and adhesives in North America, effective immediately or as contracts allow. In late January 2022, Sun Chemical also announced that price increases would be implemented in Latin America.
“Sun Chemical’s priority throughout 2021 has been to keep our products flowing to our customers, allowing them to keep their facilities operating. We continue to leverage our global network to secure raw materials and needed services,” said Chris Parrilli, president of North American Inks, in making the announcement on North America. “However, the competition for these resources is significant and is driving costs higher and faster than we can overcome through efficiency programs. This requires us to raise prices to our customers so that we can continue to secure the needed inputs to make and deliver quality products.”
• Epple Druckfarben AG: increased the prices of its sheetfed offset printing inks, coatings and printing chemicals on Feb. 1, 2022.
“We, and the entire industry urgently need to find answers to the current economic challenges,” Stefan Schülling, member of the executive board at Epple Druckfarben AG and responsible for sales and finance, said in announcing the increases. “The increased costs of raw materials, including pigments and plant-based oils, the shortages in the upstream petrochemical supply chains, and the high shipping and packaging costs are destabilizing the entire printing value chain.”
I don’t see any end to raw material pricing and availability issues, and transportation isn’t going to improve soon. The ink industry and its supply chain, both upstream and downstream, are doing what they can with what they have, and we will see what the future holds.
Back in November 2021, when I last wrote a blog post on raw materials and logistics, I reported on shortages in key materials, rising oil prices, natural disasters, transportation and logistics, and the beginnings of inflation.
Now? Inflation is rising fast; the US Inflation Calculator places inflation at 7.9% since February 2021.
Transportation hasn’t fared well: according to AAA, the average price of gasoline is $4.236/gallon as of March 24, 2022. That’s at least $1 more per gallon than a year ago.
Then there is the war in the Ukraine, with Russian forces attacking Ukraine and much of the rest of the world imposing sanctions on Russia, including its crude oil industry. This is having an impact at the gas pumps and manufacturing.
Some key raw materials - pigments, resins, solventds and additives, among others - continue to remain scarce, and those that are available are seeing higher prices.
The printing industry is having all sorts of headaches. Paper companies are raising prices, and ink companies have no choice to do so as well. Meanwhile, ink companies are trying to mitigate these costs as best as possible, but some companies are announcing price increases and surcharges. As I have noted previously, many companies don’t officially announce price increases, but I have heard unofficially from a number of companies that they have also had to move on prices.
These are just the announced increases in the last three months.
• hubergroup Print Solutions: hubergroup Print Solutions announced its price increase in early March 2022; the price increase applies to all segments, including sheetfed/UV and web offset as well as flexo and gravure products, and will vary by product.
“The situation on the raw material market is not easing, but instead continues to worsen,” said Heiner Klokkers, CEO of hubergroup, in announcing the price increases. “The printing ink industry is severely affected by the increased costs for transport and raw materials such as pigments, resins or solvents. To ensure that we can continue to supply our customers with high-quality products in the future, it is unfortunately unavoidable that we reflect the increased procurement costs in the prices of our products.”
• Sun Chemical and DIC Corporation: Announced an energy surcharge on the entire Color Materials portfolio, effective from April 1, 2022, as well as a separate announcement on Feb. 1, 2022 reporting that it increased prices across parts of its pigments, dyes and preparations portfolio.
“Our priority remains to keep supplying our customers, allowing them to keep their facilities operating,” said Stefan Sütterlin, president, Global Color Materials, in announcing the surcharge. “However, the magnitude of recent energy related inflation cannot be absorbed and requires us to implement surcharges. The situation will need to be adjusted as it goes, and we can assure our customers that surcharges will be phased out as the situation allows.”
• Flint Group Commercial Publication Web Division: In early February 2022, Flint Group’s Commercial Publication Web Divison announced surcharges. That followed increases across the company’s heatset ink, news ink, sheetfed ink, transfer media and pressroom chemical portfolios that were announced in January 2022.
“The first responsibility of a supplier is to meet its obligations to its customers for provision of required volumes to maintain the integrity of the supply chain,” said Tony Lord, president of Flint Group Commercial Publication Web Division, in making the announcement of the surcharges. “To meet this requirement, we have been successful in responding to the post pandemic’s unprecedented disruption in both global raw material and energy markets by ensuring both product and energy availability to meet our customers’ demands. This has, however, been at previously unparalleled price levels across our entire portfolio of raw materials and manufacturing locations.
“Regrettably, the hoped-for stabilization in both raw material availability and pricing has failed to materialize so far in 2022 with products remaining scarce and their pricing continuing to escalate accordingly,” Lord added. “This, coupled with the exponential increase in energy tariffs, has created a situation where current selling price levels for our products are simply not sustainable.
“To respond to this sudden rise in costs, we feel the sensible approach is to avoid a general price increase and apply a monthly surcharge whilst awaiting further market developments," Lord noted. "To this end, effective for deliveries from March 1st 2022, surcharges to recover these recent cost increases will be applied across our entire publication ink portfolio so that we can maintain supply to our customers.”
• Flint Group Packaging: Flint Group Packaging announced on Feb. 7, 2022 that it will increase the prices of all its packaging products sold by the Flexible Packaging, Paper & Board and Narrow Web businesses.
“The security of supply is our number one priority,” Doug Aldred, chief commercial officer – Flint Group Packaging, said in the announcement. “Due to our extensive global network and efficiency programmes, we are able to mitigate a significant portion of cost and supply risk. However, we continue to witness tightening supply and exponential cost increases. Despite implementing an extensive range of efficiency programs to mitigate these conditions, we are reluctantly compelled to raise prices.”
• Sun Chemical: On Jan 14, 2022, Sun Chemical announced it will increase prices across its entire lines of packaging, commercial sheetfed and screen inks, coatings, consumables and adhesives in North America, effective immediately or as contracts allow. In late January 2022, Sun Chemical also announced that price increases would be implemented in Latin America.
“Sun Chemical’s priority throughout 2021 has been to keep our products flowing to our customers, allowing them to keep their facilities operating. We continue to leverage our global network to secure raw materials and needed services,” said Chris Parrilli, president of North American Inks, in making the announcement on North America. “However, the competition for these resources is significant and is driving costs higher and faster than we can overcome through efficiency programs. This requires us to raise prices to our customers so that we can continue to secure the needed inputs to make and deliver quality products.”
• Epple Druckfarben AG: increased the prices of its sheetfed offset printing inks, coatings and printing chemicals on Feb. 1, 2022.
“We, and the entire industry urgently need to find answers to the current economic challenges,” Stefan Schülling, member of the executive board at Epple Druckfarben AG and responsible for sales and finance, said in announcing the increases. “The increased costs of raw materials, including pigments and plant-based oils, the shortages in the upstream petrochemical supply chains, and the high shipping and packaging costs are destabilizing the entire printing value chain.”
I don’t see any end to raw material pricing and availability issues, and transportation isn’t going to improve soon. The ink industry and its supply chain, both upstream and downstream, are doing what they can with what they have, and we will see what the future holds.
