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    Online Exclusives

    The Printing Ink Industry in India

    Packaging segments recovered and came close to pre-COVID-19 levels by the last quarter of 2020.

    The Printing Ink Industry in India
    Source: Siegwerk
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    Yogi Malik, Asia-Pacific Correspondent09.03.21
    India has emerged as one of the largest consumers and producers of inks in the Asia Pacific region. An ever increasing middle-class has propelled the ink usage in most of the sub-segments of the industry. However, COVID-19 has slackened the pace of growth in some of the key sub-segments of ink industry during the last 16 months. Ink World presents an overview of the Indian ink industry and impact of COVID-19 on the industry in this feature.

    Overview of the Indian Ink Industry

    Catered by nearly all the multinational ink producers and an increasing number of domestic ink producers, the Indian ink industry has registered steady growth rates during last few (barring the year 2020) years.

    Along with multinational ink producers, domestic ink producers have started to invest in capacity and capability expansions in recent years. However, the ongoing COVID crisis has been a big dampener for some of the sub-segments of the ink industry.

    Like the rest of the global ink industry, 2020 was a year fraught with multiple challenges for the Indian ink industry and producers. Most of the industry stakeholders are unanimous that the overall volume of ink consumption suffered a decline of 3% to 4% in 2020.
    Negative economic growth was the prime reason behind the decline in ink consumption in the country in  2020. The Indian economy slowed down from its growth track on account of a stringent lockdown imposed in March to prevent the spread of the COVID-19 pandemic. India’s GDP declined by 7.3 % in fiscal 2020-21, for the first time in four decades.

    However, the medium term growth outlook is expected to improve and record a growth rate of approximately 7.3% by 2025 on account of strong macroeconomic fundamentals, including moderate inflation, the implementation of key structural reforms and the improved fiscal and monetary policies.

    COVID-19 has resulted in a mixed impact on different segments. Though all businesses were severely impacted in the country during March-June 2020, however, due to increased demand of packaged food items, the flexible packaging segment started to make a quick recovery after June 2020 and soon stabilized at near pre-COVID-19 levels. Other packaging segments also recovered and came close to pre-COVID-19 levels by the last quarter of 2020.

    The publication inks business, however, has had the severest impact. The newspaper industry is still below pre-COVID-19 levels due to the drop in advertising revenue and circulation. With an increased emphasis on online education and sales promotions, the commercial offset inks are reviving slowly as compared to other sub-segments of the ink industry.

    Decline in volume in the ink production and consumption is evident from the financial numbers of some of the ink producers in the country. For example, in 2020, DIC India’s ink business (the company operates in two segments, inks and lamination adhesives) registered total sales revenue of INR 5.491 billion, a drop of 24% against a sale of INR 7.262 billion in 2019.

    Key Ink Companies in India

    • Huber India: Installed capacity of 203,000 metric tons per annum (MTPA) for printing inks, 67,600 MTPA for resins and varnishes, and 46,500 MTPA for pigments and flush colors. Its major plants are in Vapi (two plants), Daman and Silvasa.
    • DIC India (formerly Coates of India): 49,000 MTPA. Its major plants are in Noida, Kolkata, Bangalore and Ahmadabad. The packaging segment accounts for 30 % of DIC India’s sales.
    • Sakata INX India: 48,000  metric tons per annum (gravure 28,000 metric tons and offset 20,000 metric tons for offset). Its major plants are in Bhiwadi and Panoli; packaging accounts for two-thirds of Sakata INX India’s revenue.
    • Flint Group India: Plants in Vadodra and Hosur.
    • Toyo Ink India: 14,000 metric tons per annum, with plants in Noida and Dahej.
    • Siegwerk India: 20,000 metric tons per annum, with a plant in Bhiwadi.

    In a detailed communication, Ashish Pradhan, president Asia, Siegwerk told Ink World, “The Indian  ink industry is currently battling on several fronts. One is on the demand, which is very un-predictable at the moment. As the economy was picking up post the first wave, we were hit by the second wave of COVID-19, which created its own issues in terms of demand. Also, we started facing problems on the supply side where raw material connectivity became a big challenge, not only because of the Indian situation but also the global situation, where commodity supply chain was severely impacted with a series of Force Majeures and capacity restrictions because of various factors.

    “The other challenge is that we were hit strongly by a  significant increase in prices by our raw material suppliers,” Pradhan added. “This was unprecedented in the recent history of the ink industry. The overall ink industry has received support from the customer to some extent to absorb this impact through price increases, however the entire impact of raw material price increase could not be passed on to the customers so there is a significant margin erosion that the industry is facing at the moment. In short, it’s a tough time.”

    On a query regarding investment/initiative by Siegwerk India during the last 12 months, Pradhan said, We have taken several initiatives. We, at Siegwerk, are optimistic about the growth of the Indian economy and the packaging industry.  First and foremost, we started operations of Siegwerk Bangladesh, which was our foray into a new country in terms of footprint. We have been associated with Bangladesh for the last ten years. Now we have a plant in Dhaka, which not only supports our existing customers there but the entire print and packaging industry in Bangladesh.

    “Second, we are close to commissioning our capacity expansion in Bhiwadi for our solvent-based ink production.  Third, we continue to launch digital initiatives to give better value to our customers. So from a value enhancement perspective, we launched the Customer Portal late last year and very recently we launched a special feature called Track and Trace. This tracking feature ensures customers can track their orders real time by logging on to the customer portal. We are also in the process of digitalizing our entire color matching offering at our Blending Centres and the Ink Rooms that we have installed at the customer locations. This will give a better color consistency, less rework and faster support to our customers.”

    Toluene-Free Operations at Siegwerk India

    In December 2020, Siegwerk India celebrated its third anniversary of toluene-free operations in India. Siegwerk was already toluene-free across all other packaging ink factories in the world, having adopted this policy much earlier.

    However, for Siegwerk India, the crossover to toluene-free operations has not been a cake-walk. According to Pradhan, “In 2017, when we decided to go toluene-free, we had to let go off some of our businesses since at that time some part of our business was toluene-based. It was a conscious call to take the business hit in a way, and that was one of the most difficult decisions. However, we had to take this decision in the best interest of our employees, employees of our customers and for the market. We have more than recovered our losses because now the market has understood the reason why we did it and brand owners and our customers are supporting us.”
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