Chuo-Ku, Tokyo 104-8377 Japan
Sales: $1.37 billion in printing and information, and packaging materials (¥147.4 billion) Consolidated results: $2.7 billion
Major Products: Offset inks, UV / EB-curable inks, highly reactive UV inks, screen inks, inkjet inks, gravure inks, flexo inks, adhesives, laminating adhesives, hot-melt adhesives, electronics adhesives and materials, industrial adhesive tapes & films, marking films, can coatings, hard coatings, functional coating agents, water-based resins, medical adhesive products, natural extracts, organic pigments, pigment dispersions, functional dispersions, plastic colorants, color filter materials for FPDs.
Key Personnel: Kunio Sakuma, chairman; Katsumi Kitagawa, president and Group CEO; Hiroya Aoyama, senior managing director and CFO; Satoru Takashima, senior managing director and president of Toyochem Co., Ltd.; Shintaro Yamaoka, director and president of Toyo Ink Co., Ltd.; Kazuo Semba, managing director and president of Toyocolor Co., Ltd.
Number of Employees: 8,274 (consolidated).
Comments: Toyo Ink Group reported sales of $1.37 billion (¥147.4 billion) from its Printing and Information and Packaging Materials businesses, and consolidated sales of $2.7 billion (¥290.2 billion) overall.
2018 had its challenges, Toyo Ink Co., Ltd. President Shintaro Yamaoka said.
“FY 2018 was a challenging year due to the effect of rising prices of raw materials as a result of the rise in oil prices and the deteriorated supply-demand balance associated with environmental regulations in many countries,” he said. “As such, 2018 financial results grew at a sluggish pace because of the deteriorated business environment. Net sales increased to ¥290,208, but operating profit decreased to ¥15,337 million.”
While domestic demand for gravure inks for publication continued to decline in 2018, Yamaoka said domestic sales of mainstay gravure inks for packaging – mainly for private brand applications and convenience stores – were strong. Same with the domestic sales of gravure inks for construction materials – and sales of solvents also grew.
“However, the sharp rise in the prices of raw materials, mainly caused by the rise in the oil price, put a squeeze on profits beyond self-efforts, leading to revisions to selling prices,” Yamaoka said. “Overseas sales of eco-friendly type products also increased in Southeast Asia, India, China and South Korea. We expect the packaging market to remain firm in 2019, both at home and abroad.”
In Japan, sales of gravure inks for the packaging of food and drinks remain strong and sales of biomass inks to the Japan market and of eco-friendly packaging materials in Southeast Asia and India are on a growth trajectory, he added.
Domestic demand for offset inks for the commercial printing of circulars and other materials, existing information publications including newspapers and magazines, and related materials remained weaker than expected.
Given the shrinking domestic information-related print market associated with the progress of digitization, the Group sought to optimize its business scale by product and reduce costs in Japan, while bolstering sales overseas by expanding its global bases, which resulted in the advancement of sales expansion in India and Turkey.
Meanwhile, the Group focused on the development and sale of highly sensitive UV ink using leading-edge technology and other products such as inkjet ink for on-demand printing and the increase of the linkage among different businesses, thereby facilitating business growth in 2018.
According to Yamaoka, FY2019 started off strong for the Packaging Materials Business. “Above all, sales of biomass inks grew strongly,” he said. “Overseas, sales of eco-friendly type products expanded in Southeast Asia and India, while sales did not grow much in China.
“The Group continues to focus on the development and sale of highly sensitive or energy-saving inks for ozone-free and LED-UV curing systems. The popular FLASH DRY series of low-energy UV inks effectively reduce power consumption and CO2 during the printing process,” Yamaoka continued. “Our next-generation inkjet inks meet the industry demand for increased quality images and printability for offset printing as well as offer the flexibility of on-demand printing. Toyo Ink America also introduced multiple high-performance lamination ink products for both flexo and gravure in addition to high-end laminating adhesive solutions into North America. TOMOFLEX TM-250HV-US two-component polyester adhesives are developed for retort pouches processed at temperatures up to 135°C.”
Toyo Ink added new operations in Myanmar and Morocco.
“In June 2018, the Group’s parent Toyo Ink SC Holdings announced the establishment of a new manufacturing subsidiary in the Thilawa economic zone in Yangon, Myanmar,” Yamaoka said. “The new factory broke ground in November 2018 with production expected to begin in November 2019.
“Up to now, the Group had been supplying Myanmar with exports via neighboring countries while eyeing expansion in the country,” he continued, adding that Toyo is the first major ink manufacturer to set up a production foothold there. “In recent years, the Myanmar government has pushed forward with aggressive policies to attract foreign funding, such as infrastructure enhancements and the relaxation of import restrictions. Such initiatives have substantially strengthened Myanmar’s investment climate, making it an attractive investment destination.
In March 2019, Toyo Ink SC Holdings announced plans to open its first office in Africa. The new sales subsidiary, Toyo Ink North Africa, opened in Casablanca, Morocco, in mid-June. It is engaged in developing business opportunities for a wide range of Group products such as commercial printing inks, liquid (flexo and gravure) inks and adhesives for food packaging, and can coatings.
“Following China and India, the African continent is believed to be one of the future growth engines of the global economy,” Yamaoka said. “Up until now, the Toyo Ink Group had been developing its business in the region by way of our existing operating bases. The decision to establish an office in Morocco is a result of these early successes.”
The Group has long focused on developing environmentally friendly products and technologies that help materialize a sustainable, recycle-oriented society. Toyo Ink’s latest contribution in this area is biomass solutions that use petrochemical-free, naturally-derived materials as well as reduces CO2. In addition to offset, gravure and flexo inks, Toyo Ink’s biomass lineup offers products for the packaging market, such as laminating adhesives and hot-melt adhesives. For these efforts, in April 2018, the Toyo Ink Group was awarded Japan’s Environment Minister Award at the 27th Global Environment Awards.
“As the printing and packaging fields accelerate themselves toward carbon dioxide emissions reductions, the entire Group is actively promoting the development of biomass products,” Yamaoka said. “We have been focusing on the development of environmentally friendly products such as toluene-free, MEK-free and water-based inks for gravure and flexo print packaging.”
Raw materials remain a concern for the ink industry, and Toyo Ink is coping with raw material pricing and availability through a variety of measures.
“China’s Blue Sky anti-pollution initiative continues to curb production in the country, and availability of products remains a concern,” Yamaoka said. “The price of many products increased due to shortage and additional 10% tariff implemented in September 2018. The Group continues to source raw materials produced outside of China to reduce the dependency of direct purchases from China and lessen the impact of the 10% tariff. We have also implemented countermeasures such as boosting the in-house production of eco-friendly resins for UV inks, expanding the adoption of new, more efficient production methods, and promoting structural reforms at domestic sales and logistic bases. In this environment, we have also taken steps to raise our prices.”
Yamaoka said Toyo Ink Group expects global uncertainty to continue to place pressure on the operating environment in 2019.
“The global economy shows signs of a slowdown associated with trade friction between the US and China and the increasing political risk,” said Yamaoka. “In Japan, a sense of stagnation is also growing, particularly in exports, while a moderate recovery trend is said to continue. We also expect challenges such as the rising cost of raw materials to continue. Despite this harsh business environment, the Group sees reasons to be optimistic in 2019 as we pursue the many opportunities for growth and boosting our productivity. The Group as a whole will aim to develop eco-friendly production methods and bases, and review the production and management systems utilizing data science.
“In the Packaging Materials Business, the Group will continuously launch eco-friendly products using raw materials derived from natural sources in the market and promote the improved performance and sales expansion of gravure inks for the volume zone, and curable flexographic inks overseas. We will also work to reduce costs by promoting the integration of product types and greater production efficiency,” Yamaoka continued. “In the Printing and Information Business, the Group plans to accelerate structural reforms in Japan where the market is shrinking and continue to promote expansion to emerging markets where demand is expected to increase. In addition, we will further enhance UV inks that contribute to energy savings and the inkjet ink business that will respond to digitalization. With the recent advances we have achieved thus far, we remain confident that 2019 will be another year of progress for the Group.”