53721 Siegburg, Germany
Tel: +49 2241-3040
Fax: +49 2241-304777
Sales: €1.116 billion
Major Products: Provider of solvent-based, water-based, energy curable and oil-based inks and coatings and related point-of-use services for the packaging and label industries. Product applications include flexible packaging, labels, folding cartons, corrugated boxes, cups, tubes using flexographic, rotogravure offset and digital printing.
Key Personnel: Herbert Forker, CEO and president Packaging LATAM & CUSA; Dr. Oliver Wittmann, CFO and global purchasing; Ralf Hildenbrand, president Packaging Asia; Dr. Jan Breitkopf, president Packaging EMEA and Publication Gravure.
Number of Employees: 5,071 in more than 35 countries.
Comments: As the packaging segment continues to grow, so does Siegwerk Druckfarben AG & Co. KGaA; the company had an excellent 2018, growing through both organic and new additions.
“2018 was a strong year for Siegwerk, with overall turnover reaching €1,116 billion,” said Herbert Forker, CEO and president Packaging LATAM & CUSA. “Siegwerk continued to grow its business organically and via acquisitions. Our overall strategy remains focused on packaging printing inks and the expansion of our market leadership in labels and flexible packaging applications. Siegwerk is further looking for continuous global expansion, especially in emerging Asian countries.
With the purchase of AGFA Graphics’ UV inkjet ink business for single pass packaging and labels, Siegwerk expanded its product offering for inkjet OEMs and printers. Siegwerk also acquired the Canadian flexographic ink company, Ultra Inks, a leading water-based flexographic ink manufacturer for narrow web and paper and board applications, further strengthening its Canadian business.
“Leveraging on Ultra Inks’ experienced team and strong reputation in the market, this collaboration complements our UV portfolio in the region and allows for a more comprehensive product offering and higher service level for customers,” Forker noted.
Siegwerk also expanded in Asia, adding a new blending center in Bangladesh.
“We decided to invest in a new state-of-the-art blending center in Bangladesh to strengthen our local infrastructure while getting closer to our customers in the country to even better support them with their locally specific printing requirements,” Forker observed. “Siegwerk has been supplying inks to Bangladesh for more than two decades and has developed a strong customer base with sustainable growth. The new center is expected to commence operations by the end of 2019 and will enable us to capitalize on the long-term growth potential of the market.”
The recent acquisitions follow closely on the heels of Siegwerk’s additions during late 2017 and early 2018, when the company added AGFA Graphics’ UV inkjet ink business and Brazilian ink manufacturer Tupahue Tintas.
“With the acquisition of AGFA Graphics’ UV inkjet ink business for single pass packaging and labels, Siegwerk can now leverage a strong platform to further develop not only UV, but also water-based digital inks for packaging and label applications,” Forker said. “Believing in the long-term growth potential of the emerging countries, Siegwerk specifically expanded its presence in Latin America by acquiring Tupahue Tintas, a leading Brazilian flexo and gravure ink provider, in December 2017. During 2018, Siegwerk Brazil focused on ensuring the smooth integration of the two companies to deliver the best possible ink solutions and services to Siegwerk customers.”
Another highlight last year was the launch of mySiegwerk, the new online customer portal for order and color management. With this digital tool, customers have transparent and easy access to the information on their orders while receiving more efficient workflows to make their work easier and faster. It was rolled out in April 2018 to Paper and Board customers in Germany, Switzerland and Austria (DACH region) and was also launched for several business units in China early 2019. It is planned to design and integrate new features into the customer portal on an ongoing basis and roll it out in further countries and locations during the coming years.
Forker added that the company’s charitable work is also a highlight. “As part of Siegwerk’s long tradition, we are always committed to contributing to the welfare of the society,” he said. “In 2018, Siegwerkers in Southeast Asia partnered with SOS Children’s Village to support children and young adults across Indonesia. The YouthCan! Program is one of such initiatives where Siegwerkers act as mentors, enabling the youth to build work skills and provide career guidance or direct work experience to facilitate the transition from the villages to real life.”
Like the rest of the industry, Siegwerk experienced continuous cost increases for raw materials in 2018.
“We took and continue to take all possible actions to minimize the effects on our customers,” Forker reported. “The last two years have been quite challenging for the ink industry dealing with significant raw material supply disruptions. We have seen the impact of REACH in the EC, ongoing supply disruptions due to serious industrial accidents and increased environmental, health and safety regulations in China and Europe, trade wars, and even an extended period of disruptions due to low water levels on the Rhine.”
Forker noted that as part of Siegwerk’s commitment to industry-leading product safety, the company has always set its own benchmark standards on health and safety, exceeding general market standards, and also has developed built a strong network of suppliers.
“This has allowed the company to largely anticipate the tightened regulations in Europe and other countries,” he added.
“Nevertheless, as the remaining ink manufacturers rushed to catch up on compliance, before agreed deadlines, Siegwerk experienced some disruptions and price increases as existing supplier capacities were filled. As a global operator with a global purchasing organization, Siegwerk has long-term experience in establishing and tracking alternative suppliers for each raw material facilitating the handling of outages due to supply disruptions. All suppliers are audited to ensure that their standards and operating practices comply with the highest standards and in many cases, there are already long-term partnerships with Siegwerk. As raw material shortages resulted from disruptions in Europe and China, this strong network of suppliers ensured that there were no significant supply disruptions to Siegwerk customers.
“However, Siegwerk was not immune to raw material price increases in the market related to these events,” Forker pointed out.
“As the raw material supply continues to stabilize, we remain on high alert to ongoing changes in terms of health, environmental and safety standards. In addition, we have again raised our own benchmarks regarding long-term sustainability and recycling standards, which will impact all areas of our business including our raw materials.”
Forker spoke about the growing importance of the Circular Economy, and Siegwerk’s efforts in the field
“The Circular Economy is currently the biggest topic regarding sustainability in Europe and already incorporated in legislation setting ambitious recycling targets for plastic packaging,” he added. “By aiming a maximum gain in recyclable resources and re-using them in marketable products, Circular Economy ensures high recycling rates, which means, in turn, a lower use of primary or fossil resources. Several industry initiatives are already focusing on enhanced recycling properties such as the Ellen Mac Arthur Foundation or CEFLEX (Circular Economy for Flexible Packaging) who will likely shape the inks and packaging markets with their conclusions driving the achievement of set recycling targets.
“As a global ink manufacturer, we are actively cooperating with those initiatives as we are committed to increasing the recyclability of printed plastic packaging with our printing inks and varnishes addressing circular economy demands - today and in the future.
We believe the focus of current innovation management is clearly on recyclable printing inks, varnishes and packaging design. It is about ‘Design for recycling’ which involves transforming packaging to make it better for recycling than before, in the context of existing recycling technologies, with a corresponding increase in recycling rates without impairing the protective properties of the packaging and its other technical functions,” Forker noted.
As for the coming year, Siegwerk expects that the printing industry in the developed part of the world will grow at a solid pace, but the company foresees stronger growth in the emerging regions, specifically South Asia and the Middle East.
“In India, Siegwerk is already well-positioned to support the transition to safer, toluene-free solutions in the flexible packaging market,” Forker reported. “Moreover, we expect sustainability and the Circular Economy to become leading topics for the flexible packaging industry in the coming years. As a member of CEFLEX, a collaborative initiative of a European consortium of companies and associations representing the entire value chain of flexible packaging, Siegwerk emphasizes its strong commitment towards sustainability by engaging with industry partners and actively driving the development of advanced solutions to further strengthen a circular economy approach for flexible packaging.
“We headed into 2019 with ambitious goals to continue growing our strong position within the packaging market,” he concluded.
“We are focusing on differentiation via innovation and digitalization to build new business opportunities while further investing in our infrastructure, technology and personnel to promote long-term growth for our future. By continuing to produce high-quality products and by providing exceptional guidance and support, in terms of ink room management, color matching, and product safety, we anticipate continued growth throughout 2019 and beyond.”