As companies struggle with higher raw materials costs, a struggling economy and increasing pressure on margins, more consolidation is likely throughout the supply chain.
Sean Milmo, Ink World European Editor10.02.08
The $3.4 billion proposed takeover of Ciba Specialty Chemicals by the German-based chemicals giant
BASF announced in mid-September is likely to be followed by similar merger deals covering the supply chain of inks and other graphics materials.
The acquisition is seen as a sign of intense financial pressures on suppliers of raw materials and intermediates from soaring raw material costs, triggered by increases in the prices for crude oil and other basic commodities.
Producers of key intermediates such as pigments, additives and resins have had difficulties withstanding the sharp fluctuations in their raw material prices.
Even leading players like Ciba, a major producer of pigments and additives which last year had sales of SFr 6.5 billion ($5.8 billion) have found that they are not big enough to resist the price increases of their suppliers. At the same time, they do not have enough clout within their own mark
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