David Savastano, Editor12.28.15
As the calendar turns to 2016, it is an ideal time to look back on the past 12 months. The printing ink industry has seen its share of changes during the past year. Mergers and acquisitions activity picked up in the last two months of 2015, and major corporations announced significant changes going forward. On the raw material front, the industry has seen further declines in oil prices were approximately $35 per barrel, and the euro is now valued at less than $1.10.
Mergers and Acquisitions
The ink industry had been relatively slow in terms of mergers and acquisitions, but that changed dramatically at the end of the year Flint Group acquired Xeikon, a leader in inkjet press technology, in November and creating Flint Group Digital Printing Solutions. Toyo Ink’s December acquisition of 75% of DYO Printing Inks, the largest Turkish ink manufacturer, is a significant move in the Middle East/North Africa (MENA) market.
Earlier in the year, Flint Group set up a JV with Continental Printing Inks/Eagle Ink Systems, forming Flint Group Africa. IN Southeastern Europe, Sun Chemical acquired the remaining shares of a previous JV with Druckfarben Hellas.
The textile ink market was the arena for a few key acquisitions. Dover Corporation acquired JK Group SPA, including Kiian Digital, J-Teck3 and Sawgrass Industrial, and EFI purchased Reggiani Macchine, a water-based inks industrial inkjet press manufacturer. Sensient Technologies acquired Xennia Technology.
IIMAK acquired American Ink Jet Corporation (AIJ), a manufacturer of wide format and desktop printer inks, and Talon Industries, a supplier of continuous inkjet inks.
The printing industry saw some significant mergers. RockTenn and MeadWestvaco Corporation combined to form WestRock, a $15 billion force in the consumer and corrugated packaging field. Ball Corporation is working to finalize its takeover of Rexam, which if completed would form a nearly $15 billion packaging company. RR Donnelley acquired Courier Corporation, the largest book publisher.
Right after the Courier announcement, RR Donnelley announced it intends to break up into three independent, publicly traded companies. Hewlett-Packard announced a similar move in 014, and two major suppliers - Air Products and Ashland - are planning on breaking up into two parts, respectively.
The Cost of Doing Business
Companies can always count on mergers and acquisitions and consolidation to change the business climate. The raw material market and other economic factors can be less predictable.
It is fair to say that 2015 was unpredictable. Heading into the year, there had been a sense of stability as price had come to rest, although at high levels, after four or five years of extreme volatility. What happened in 2015 was surprising even by purchasing executive’s standards.
Here are two benchmarks:
• Brent crude oil: $47.74 per barrel on Jan. 6, 2015; $34.66 per barrel on Dec. 21, 2015(which, by the way, is the lowest level since 2014).
• Euro vs. dollar: $1.215 on Dec. 31, 2014; $1.086 on Dec. 21, 2015.
First, oil prices. The US expansion of the shale gas industry and lower demand throughout the world have driven oil prices down dramatically; remember that in July 2008, oil prices peaked at $145 per barrel.
Crude oil prices are not a huge determinant of ink prices, but it doe splay a role in feedstock production. The euro, on the other hand, is a real challenge for European companies, as the dollar is the currency used for purchasing many key ingredients.
So, what does 2016 hold for the ink industry? Many of the trends we have seen in recent years - a decline in publication and commercial printing, and a corresponding increase in packaging and digital printing – are certain to continue. There will always be some consolidation, certainly in the printing industry and among suppliers. The one thing we know for certain is that the ink industry will continue to evolve in the coming years.
Mergers and Acquisitions
The ink industry had been relatively slow in terms of mergers and acquisitions, but that changed dramatically at the end of the year Flint Group acquired Xeikon, a leader in inkjet press technology, in November and creating Flint Group Digital Printing Solutions. Toyo Ink’s December acquisition of 75% of DYO Printing Inks, the largest Turkish ink manufacturer, is a significant move in the Middle East/North Africa (MENA) market.
Earlier in the year, Flint Group set up a JV with Continental Printing Inks/Eagle Ink Systems, forming Flint Group Africa. IN Southeastern Europe, Sun Chemical acquired the remaining shares of a previous JV with Druckfarben Hellas.
The textile ink market was the arena for a few key acquisitions. Dover Corporation acquired JK Group SPA, including Kiian Digital, J-Teck3 and Sawgrass Industrial, and EFI purchased Reggiani Macchine, a water-based inks industrial inkjet press manufacturer. Sensient Technologies acquired Xennia Technology.
IIMAK acquired American Ink Jet Corporation (AIJ), a manufacturer of wide format and desktop printer inks, and Talon Industries, a supplier of continuous inkjet inks.
The printing industry saw some significant mergers. RockTenn and MeadWestvaco Corporation combined to form WestRock, a $15 billion force in the consumer and corrugated packaging field. Ball Corporation is working to finalize its takeover of Rexam, which if completed would form a nearly $15 billion packaging company. RR Donnelley acquired Courier Corporation, the largest book publisher.
Right after the Courier announcement, RR Donnelley announced it intends to break up into three independent, publicly traded companies. Hewlett-Packard announced a similar move in 014, and two major suppliers - Air Products and Ashland - are planning on breaking up into two parts, respectively.
The Cost of Doing Business
Companies can always count on mergers and acquisitions and consolidation to change the business climate. The raw material market and other economic factors can be less predictable.
It is fair to say that 2015 was unpredictable. Heading into the year, there had been a sense of stability as price had come to rest, although at high levels, after four or five years of extreme volatility. What happened in 2015 was surprising even by purchasing executive’s standards.
Here are two benchmarks:
• Brent crude oil: $47.74 per barrel on Jan. 6, 2015; $34.66 per barrel on Dec. 21, 2015(which, by the way, is the lowest level since 2014).
• Euro vs. dollar: $1.215 on Dec. 31, 2014; $1.086 on Dec. 21, 2015.
First, oil prices. The US expansion of the shale gas industry and lower demand throughout the world have driven oil prices down dramatically; remember that in July 2008, oil prices peaked at $145 per barrel.
Crude oil prices are not a huge determinant of ink prices, but it doe splay a role in feedstock production. The euro, on the other hand, is a real challenge for European companies, as the dollar is the currency used for purchasing many key ingredients.
So, what does 2016 hold for the ink industry? Many of the trends we have seen in recent years - a decline in publication and commercial printing, and a corresponding increase in packaging and digital printing – are certain to continue. There will always be some consolidation, certainly in the printing industry and among suppliers. The one thing we know for certain is that the ink industry will continue to evolve in the coming years.
