David Savastano, Ink World Editor10.13.09
The global recession has had a major impact on virtually all aspects of printing, but some segments have fared better than others. Generally speaking, packaging has done better than most areas, particularly on the food side, while big ticket items have fared worse as consumers have been closely watching their spending.
For the most part, ink executives said that the past year has been flat in terms of sales, although that is somewhat deceiving as the middle of 2008 was strong, and there seems to be a slight economic rebound in progress in the past few months. Ink companies are closely watching the market as they look forward to the coming year.
“Packaging has held up the best in a challenging year for printing,” said Geoffrey Peters, president and COO, Wikoff Color Corporation. “Much of the flexible packaging and folding carton markets have seen flat to very modest growth, which is respectable when compared with the commercial printing markets. It almost seems like ‘flat’ is the new ‘good.’ Consumer items, primarily purchased in grocery stores and big box retailers, are still selling, but overall it’s been a relatively growth-free year.”
“The packaging market has fared much better than other ink market segments,” said George Sickinger, president and CEO, Color Resolutions International (CRI). “In fact, some converters who serve the consumer staples market have reported an uptick in business. We have seen a rebound in business in July, August and into September. I believe there has been a drawdown of inventory by consumer products companies that has been felt throughout the supply chain. I would expect things to improve further as we approach the holiday season.”
“The first quarter of 2009 saw the drop in demand continue relative to the fourth quarter of 2008,” said Bryce Kristo, chief financial officer and senior vice president general affairs, INX International Ink Co. “However, in the second quarter, the demand began to rise and stabilize. Although overall demand is lower than previous trends, it appears to be steady and predictable.”
Overall, ink manufacturers said that the global recession that began during the last half of 2008 and continued into 2009 was a tremendous concern.
“The packaging and ink market started well in 2008 but faced a strong economic headwind starting in the summer,” said Dr. Peter Heimerzheim, corporate spokesperson for Siegwerk Druckfarben AG. “Generally, a lot of the market participants had a terrible fourth quarter. The increase of raw material prices, the rise of energy costs and the economic downturn led to dramatic profit decreases – also in the whole chemical industry all over the world.” Dr. Heimerzheim added that Siegwerk did enjoy some highlights, gaining significant business in new markets such as India, Indonesia and China, and the company also sees strong opportunities in Brazil and Argentina.
“The packaging and packaging ink markets have been relatively flat,” said Michelle Hearn, director of marketing, North American Inks, for Sun Chemical. “The recession has very much been global, and we are all making our own adjustments. We track Nielson data, and you can see that packaging has been flat to slightly decreasing in the past year. I suspect that there will be some growth as customers get through their inventories.”
“In general, the market has been sluggish with companies closing, acquisitions and the overall state of the economy,” said Kenneth Keathley, director of marketing for Environmental Inks and Coatings (EIC).
“We have seen the overall packaging and ink markets as flat to slightly down over the past year,” said Robert Callif, vice president, BCM Inks/Arets Graphics MWE.
“The packaging and ink market, like other ink segments, faced dramatic cost increases which drove prices up throughout 2008,” said Jens Zimmerman, director, global marketing and business development, Flint Group – Packaging and Narrow Web Division. “As with many industries, the packaging market was significantly impacted by the market-wide downturn in the final half of the year that resulted in flat growth when compared to 2007. Some segments have been affected more than others, with demand reducing within the folding carton sector.”
Mr. Zimmerman added that food packaging did generally remain stable throughout the year, with this market being less susceptible to the global recession.
Yu Adachi, corporate communications for Toyo Ink Mfg. Co., Ltd., said that demand for gravure inks for food packaging applications was steady relative to such markets as publishing and construction materials, and that growth in the BRIC countries (Brazil, Russia, India and China) was a positive for the company.
“For Toyo, the Southeast Asia region was the area where we saw the greatest growth, in part due to expanded sales of eco-friendly products,” Mr. Adachi said. “Also, Toyo Ink expects business operations in BRIC countries to expand. Demand for environmentally friendly products has been growing steadily in China, and we began marketing and sales of gravure inks in India. In addition, Toyo Ink is now manufacturing gravure and flexographic inks at our new plant in Texas.”
Without a doubt, packaging took a major hit worldwide as the result of the recession. For example, Dr. Heimerzheim noted that the European ink industry was impacted. “The downturn in volume was about 3 percent,” Dr. Heimerzheim said. “Packaging inks lost more than 5 percent in volume.”
Mr. Keathley and Mr. Callif noted that less spending on goods means a reduced need for packaging.
“With consumer confidence being so low, spending continues to be slow as well,” Mr. Keathley said. “When inventory and products don’t move off shelves, there is less of a need for packaging, which in turn means less of a need for ink.”
“The economic recession has impacted packaging because consumers have reduced their product purchases. Therefore, there has been a request for fewer boxes,” Mr. Callif said.
Mr. Kristo said that the recession has resulted in a volume variance to previous years that INX had to offset with cost reductions. “These cost reductions and stable oil prices have allowed for better stability, and under these conditions and cost cutting measures, INX has been able to recover profitability,” Mr. Kristo added.
“The economic downturn has impacted everyone within the packaging chain, right across the board,” Mr. Zimmerman said. “Some as a result of an actual drop in business demand, while others have been impacted due to a concern regarding the future direction the market will take. Everyone has become very cautious. Well-managed businesses are certainly watching their inventories and pre-emptively cutting costs wherever possible, and this has certainly driven down the overall consumption of materials within the packaging market. Investment in pressroom equipment has also been affected drastically during the current downturn, with many printers postponing or even canceling non-essential expenditure.
“The recession has also led to an impact on the sales of private label products, which have increased during the economic downturn,” Mr. Zimmerman added. “Historically, this segment has typically been represented through plain packaging and simple graphics. However, graphic quality has continued to become an increasingly important factor in the acceptance of these types of products.”
The recession was not the only challenge that packaging ink manufacturers faced; volatile raw material costs made pricing a major concern as margins suffered. Mr. Callif noted that fluctuating raw material prices impact the packaging ink market because profit margins continue to get squeezed.
“Cost/pricing continues to be a major concern as consumers demand lower prices and converters turn their attention towards obtaining lower prices from their vendors,” Mr. Keathley said. “We have only been able to pass along moderate price increases, and in most cases, we have only passed along a small percentage of the actual increases. We know it is a tough market for converters and we want our customers to know that we understand their dilemma and we have to work together to survive this economic downturn.”
“We have heard it said that recent raw material price fluctuation makes the newly installed, high-impact roller coasters in amusement parks look pretty tame,” Mr. Peters said. “Some of our key raw materials are derived from petroleum and therefore followed the big swings in oil prices, but in a lagging way. However, prices always seemed to lag more going down than going up. Other raw materials are less closely tied to a particular natural resource due to a lengthy series of manufacturing steps. Their fluctuations, which were of equal magnitude but on a different cycle than petroleum-based products, sometimes seemed capricious. Printers want answers to why things are they way they are, what to expect and how to manage the risk, but, unfortunately, there aren’t any good answers yet.”
Mr. Sickinger said that going forward, raw material pricing is his greatest concern. “We see prices beginning to rise and I believe this will accelerate as the economy recovers,” Mr. Sickinger said. “I’m afraid we could get caught in a margin squeeze. As unemployment remains high, the consumer will be very focused on price, which will deter those of us in the consumer supply chain from recovering the rising costs. Also, more developing countries are entering the packaging converting business to support their growing manufacturing base. This increased demand will further impact the cost of raw materials.”
“Raw material prices are climbing at a more rapid pace than cost-cutting measures and revised sales prices,” Mr. Adachi reported.
“For the most part, we believe materials have been stable in relation to the price for a barrel of oil,” Mr. Kristo said. “In 2008, it was a very difficult year in this regard, so 2009 has been better.”
“After a reduction in Q4 last year, the prices for base chemicals again started to increase sharply in early 2009. In a lot of cases this happened even before the rise in crude costs that have only served to further compound the increased pressure on base chemicals,” Mr. Zimmerman said. “Many of the suppliers to the ink industry have been unable to pass these increases on yet, due to the current market circumstances. There are, however, clear signs that the prices in some markets will start to rise in the very near future, even if the price of crude oil should remain stable or decrease.
“External public market data clearly shows an underlying upward trend for all major ink raw materials and this will affect the development of ink prices accordingly,” Mr. Zimmerman added. “Recent small increases in demand have seemed to trigger an upwards price spiral, as the capacity of major raw material suppliers, both of intermediates and our raw materials, has been reduced quite significantly in 2009. In addition, the overall raw material supply chain has been totally ‘de-stocked’ during the recession with the emptying of high cost stocks. Any additional increases in market demand could potentially lead to further disproportional price pressure.”
To meet the needs of packaging designers and converters, ink manufacturers are developing a wide range of new products.
Ms. Hearn noted that Sun Chemical now has three global brands for packaging: SunStrato lamination ink series, Sun Visto for corrugated and SunSpectro for surface printing.
"Our SunPak Diamond inks are getting good interest from the sheetfed side," Ms. Hearn said. “It is a mineral-oil free technology, using 80 percent renewable resources the highest percentage in the ink industry. We continue to improve and invest in WetFlex technology. We have had some success in Europe with WetFlex, and we think the emphasis on the environment will help."
Mr. Kristo said that INX Digital just introduced its first web press at PRINT ’09.
“It’s ideal for short-run narrow web labels as well as customized and variable data applications,” Mr. Kristo said. “We are proud of our team who developed this product, which delivers brilliant full color UV LED-cure, single pass output at through-cure speeds up to 80’ per minute. We think the market will respond well since it can run materials widths of 6.3 inches and has a maximum printing image width of 5.5 inches. Plus, our specially designed EVOLVE line of UV inks are a perfect match for the highly focused Summit LED short wavelength UV light technologies that offer eye-popping color.”
Environmentally friendly inks and UV inks are also much in demand.
“We have introduced several new ink sets for commercial and package printing that have great performance, low VOC content and are as economical as possible,” Dr. Duncan said. “We feel that these are advantages that printers need to jumpstart their business. Also, our UV ink jet products seem to be in a growth mode.”
“UltraPro is our new state-of-the-art water-based ink for a broad range of applications,” Mr. Keathley said. “UltraPro is our most press stable ink offering to date and exhibits robust properties while minimizing VOC content and meeting the demands of increasingly more stringent environmental standards.”
“BCM developed Eekoflex inks and varnishes,” said Mr. Callif. “The Eekoflex inks and varnishes is a water-based ink system that replaces some petroleum-based resins with pine tree rosins.”
“Flint Group’s Flexocure FORCE ink series is a milestone development in UV flexo label technology, enabling printers to make further advancements in print quality with improved mileage and enhanced on-press performance,” Mr. Zimmerman said. “A reduced viscosity with no foaming makes handling much easier, while a greater adhesion to a wider range of substrates provides improved results on many variable-printing techniques. Developed as part of a customer oriented innovation involving leading quality minded converters in the development process - Flexocure FORCE covers everything a label and narrow web printer needs today, tomorrow and for the foreseeable future.
“Further advancements include the new generation ink system Sterling II Flexo that has been proven to provide high end use lamination performance, comparable to other more expensive chemistries,” Mr. Zimmerman added. “This nitro urethane system has also become popular for its sharp printing and on-press stability, even being selected over other flexo process printing sets when its end use performance properties are not necessarily required. Latest modifications have proven to also print very well on high-speed packaging gravure presses that are becoming increasingly more popular within the industry.
“Additional introductions to the North American flexible packaging market include Flint Group’s new POLARTEK white ink,” Mr. Zimmerman said. “Scheduled for imminent launch, POLARTEK has been found to provide very low retained solvents while providing excellent lamination bonds across a wide range of substrates. Customers have already remarked on the high opacity and lower applied cost and we believe this next generation white ink will provide printers with the high performance white that is required in today’s competitive market.”
“We have expanded our product line-up of flexo printing inks for packaging applications, which we plan to launch at Pack Expo Las Vegas 2009. Toyo Ink is also looking to increase sales of eco-friendly product offerings, such as the solvent-recycling and water-based ink systems,” Mr. Adachi said.
The packaging ink market does have areas of growth, particularly in flexible packaging and folding carton.
“Both folding carton and flexible packaging should see significant growth as the economy emerges from the recession and consumer spending rebounds,” said Dr. Don Duncan, Wikoff Color’s director of R&D. “Of the different ink chemistries, UV/EB products have done well over the last year and should continue to lead.”
“We are seeing growth in the snack food market, folding carton, flexible packaging and frozen foods,” Ms. Hearn said. “We have seen some growth in energy curable sales due to our Handschy acquisition in folding carton. On the other hand, single serve packaging is not as strong as it was as families have made adjustments in their buying.”
“Any niche related to consumer staples has done well, which would include corrugated, flexible packaging and labels,” Mr. Sickinger noted. “I believe the greatest growth will be in value added packaging. By value added packaging, I mean packaging with fine graphic and vibrant colors that attract the consumer. I find Costco a great place to visit to observe packaging and consumer trends.”
“Over proportionate growth can still be seen in high performance laminates,” Mr. Zimmerman said. “In addition, labels and flexible packaging continue to remain relatively strong, as this market sector is predominately driven by food related end uses, which should suffer less during a downturn.”
“We have seen the greatest growth in two areas,” Mr. Callif said. “The first area is food and beverage, because as consumers watch their expenses, they are consuming at home rather than going to restaurants and bars. The second area of growth and the area that we anticipate to be the greatest growth going forward is sustainability. Wal-Mart and other companies will continue to pursue sustainability because of the positive impact on the environment, increased consumer interest in ‘green’ products, and cost savings.”
Digital technologies are poised to make gains in some markets, although there remains obstacles to overcome. Mr. Kristo said that on the digital side, INX sees plenty of potential as traditional packaging companies become open to digital applications.
“We anticipate the digital print sector to continue to grow,” Mr. Callif added.
“There is much hype about digital,” Mr. Sickinger said. “I have attended a number of conferences recently that have put digital in prospective, and I have concluded that digital has a very long way to go to make a big gain at the expense of the conventional processes. If the truth be known, I would guess that those who have entered the market have yet to achieve any return on their investment. Also, I believe advances in conventional printing will offset some of the advantages of digital. The big money is still in digital ink for the consumer market.”
Mr. Keathley reported that efforts continue to be focused on sustainability and environmental issues. Mr. Kristo said that INX sees the greatest potential in providing environmentally friendly inks that do not sacrifice quality.
“Converters are searching for ways to make their product offerings more environmentally friendly,” Mr Keathley said. “Being able to offer a more sustainable ink at an economical price will provide opportunities in the future.”
As is the case with all printing ink segments, providing excellent service remains critical.
“We have a renewed approach to customer service and adding value to our customers supply chain,” Mr. Keathley said. “In 2009 a greater emphasis was placed on advanced color management to help our customers increase throughput and efficiency. As an ink company, if we can help the customer improve press room efficiency, we have a better opportunity to market the value of our product and build a lasting relationship as partners.”
“This is a time when partnerships, supplier confidence, trust and a proven track record of solving problems is increasingly important to consider,” Mr. Peters added. “Suppliers who can solve tricky performance issues, who have the resources to deal with sustainability and REACH and who can deliver quality products quickly are the ones that will excel over the long term.”
Mr. Sickinger sees some cause for optimism.
“Since mid-March, our color service lab has been inundated with new color match requests,” Mr. Sickinger said. “In the past, a rise in color matches has corresponded to a rise in sales. Until July this was not the case. I think consumer products companies were doing a lot of copy changes to address the consumer in recession and those customers are requiring more technical support than ever. I also believe our customers were more aggressively chasing new business, which translated into a rise in our lab expense.”
All in all, Mr. Peters said he hopes that packaging levels will enjoy a resurgence in the coming years.
“Wikoff, along with everyone else, is hoping that this trough we are in is, in fact, a trough, and not a plateau representing a new norm,” Mr. Peters concluded.
Southern Selects Asparagus Package, produced by Cryovac Food Packaging Division, Sealed Air Corporation, received the Flexible Packaging Association’s (FPA) Highest Achievement Award in Packaging Excellence as well as a Gold Award in Packaging Excellence. This package improves the way fresh asparagus is sold in retail stores and the way it is prepped and cooked by the consumer. The clean asparagus is vacuum skinned, and enables consumers to quickly steam the asparagus in the microwave, a more energy efficient alternative to boiling water. |
“Packaging has held up the best in a challenging year for printing,” said Geoffrey Peters, president and COO, Wikoff Color Corporation. “Much of the flexible packaging and folding carton markets have seen flat to very modest growth, which is respectable when compared with the commercial printing markets. It almost seems like ‘flat’ is the new ‘good.’ Consumer items, primarily purchased in grocery stores and big box retailers, are still selling, but overall it’s been a relatively growth-free year.”
“The packaging market has fared much better than other ink market segments,” said George Sickinger, president and CEO, Color Resolutions International (CRI). “In fact, some converters who serve the consumer staples market have reported an uptick in business. We have seen a rebound in business in July, August and into September. I believe there has been a drawdown of inventory by consumer products companies that has been felt throughout the supply chain. I would expect things to improve further as we approach the holiday season.”
“The first quarter of 2009 saw the drop in demand continue relative to the fourth quarter of 2008,” said Bryce Kristo, chief financial officer and senior vice president general affairs, INX International Ink Co. “However, in the second quarter, the demand began to rise and stabilize. Although overall demand is lower than previous trends, it appears to be steady and predictable.”
The Packaging Ink Market in the Past Year
Overall, ink manufacturers said that the global recession that began during the last half of 2008 and continued into 2009 was a tremendous concern.
“The packaging and ink market started well in 2008 but faced a strong economic headwind starting in the summer,” said Dr. Peter Heimerzheim, corporate spokesperson for Siegwerk Druckfarben AG. “Generally, a lot of the market participants had a terrible fourth quarter. The increase of raw material prices, the rise of energy costs and the economic downturn led to dramatic profit decreases – also in the whole chemical industry all over the world.” Dr. Heimerzheim added that Siegwerk did enjoy some highlights, gaining significant business in new markets such as India, Indonesia and China, and the company also sees strong opportunities in Brazil and Argentina.
“The packaging and packaging ink markets have been relatively flat,” said Michelle Hearn, director of marketing, North American Inks, for Sun Chemical. “The recession has very much been global, and we are all making our own adjustments. We track Nielson data, and you can see that packaging has been flat to slightly decreasing in the past year. I suspect that there will be some growth as customers get through their inventories.”
“In general, the market has been sluggish with companies closing, acquisitions and the overall state of the economy,” said Kenneth Keathley, director of marketing for Environmental Inks and Coatings (EIC).
“We have seen the overall packaging and ink markets as flat to slightly down over the past year,” said Robert Callif, vice president, BCM Inks/Arets Graphics MWE.
Zeda Dark Angel Revealingly Dark Bronzing Intensifier, by CL&D Graphics, received the FPA’s Gold Award in Printing Achievement. With the use of proprietary CL&D techniques of vacuum spot metallization applied to high shrink polymers conforming to shape, Zeda Tanning created dramatic impact. |
Mr. Zimmerman added that food packaging did generally remain stable throughout the year, with this market being less susceptible to the global recession.
Yu Adachi, corporate communications for Toyo Ink Mfg. Co., Ltd., said that demand for gravure inks for food packaging applications was steady relative to such markets as publishing and construction materials, and that growth in the BRIC countries (Brazil, Russia, India and China) was a positive for the company.
“For Toyo, the Southeast Asia region was the area where we saw the greatest growth, in part due to expanded sales of eco-friendly products,” Mr. Adachi said. “Also, Toyo Ink expects business operations in BRIC countries to expand. Demand for environmentally friendly products has been growing steadily in China, and we began marketing and sales of gravure inks in India. In addition, Toyo Ink is now manufacturing gravure and flexographic inks at our new plant in Texas.”
The Economic Recession and Packaging
Without a doubt, packaging took a major hit worldwide as the result of the recession. For example, Dr. Heimerzheim noted that the European ink industry was impacted. “The downturn in volume was about 3 percent,” Dr. Heimerzheim said. “Packaging inks lost more than 5 percent in volume.”
Mr. Keathley and Mr. Callif noted that less spending on goods means a reduced need for packaging.
“With consumer confidence being so low, spending continues to be slow as well,” Mr. Keathley said. “When inventory and products don’t move off shelves, there is less of a need for packaging, which in turn means less of a need for ink.”
“The economic recession has impacted packaging because consumers have reduced their product purchases. Therefore, there has been a request for fewer boxes,” Mr. Callif said.
Mr. Kristo said that the recession has resulted in a volume variance to previous years that INX had to offset with cost reductions. “These cost reductions and stable oil prices have allowed for better stability, and under these conditions and cost cutting measures, INX has been able to recover profitability,” Mr. Kristo added.
“The economic downturn has impacted everyone within the packaging chain, right across the board,” Mr. Zimmerman said. “Some as a result of an actual drop in business demand, while others have been impacted due to a concern regarding the future direction the market will take. Everyone has become very cautious. Well-managed businesses are certainly watching their inventories and pre-emptively cutting costs wherever possible, and this has certainly driven down the overall consumption of materials within the packaging market. Investment in pressroom equipment has also been affected drastically during the current downturn, with many printers postponing or even canceling non-essential expenditure.
“The recession has also led to an impact on the sales of private label products, which have increased during the economic downturn,” Mr. Zimmerman added. “Historically, this segment has typically been represented through plain packaging and simple graphics. However, graphic quality has continued to become an increasingly important factor in the acceptance of these types of products.”
Raw Material Prices and Packaging Inks
The recession was not the only challenge that packaging ink manufacturers faced; volatile raw material costs made pricing a major concern as margins suffered. Mr. Callif noted that fluctuating raw material prices impact the packaging ink market because profit margins continue to get squeezed.
Hot N Handy Bio-Pouch-Flexible Package, produced by Robbie Manufacturing, Inc., received both the Gold Award in Packaging Excellence and Gold Award in Sustainability & Environmental Achievement from the FPA. The Bio-Pouch, made from renewable wood-pulp, is environmentally friendly and will degrade “back to nature.” Compared to rigid polystyrene containers, the Bio-Pouch uses 92 percent less crude oil, reduces CO2 emissions by 56 percent and reduces packaging material waste, by weight, 75 percent. |
“We have heard it said that recent raw material price fluctuation makes the newly installed, high-impact roller coasters in amusement parks look pretty tame,” Mr. Peters said. “Some of our key raw materials are derived from petroleum and therefore followed the big swings in oil prices, but in a lagging way. However, prices always seemed to lag more going down than going up. Other raw materials are less closely tied to a particular natural resource due to a lengthy series of manufacturing steps. Their fluctuations, which were of equal magnitude but on a different cycle than petroleum-based products, sometimes seemed capricious. Printers want answers to why things are they way they are, what to expect and how to manage the risk, but, unfortunately, there aren’t any good answers yet.”
Mr. Sickinger said that going forward, raw material pricing is his greatest concern. “We see prices beginning to rise and I believe this will accelerate as the economy recovers,” Mr. Sickinger said. “I’m afraid we could get caught in a margin squeeze. As unemployment remains high, the consumer will be very focused on price, which will deter those of us in the consumer supply chain from recovering the rising costs. Also, more developing countries are entering the packaging converting business to support their growing manufacturing base. This increased demand will further impact the cost of raw materials.”
“Raw material prices are climbing at a more rapid pace than cost-cutting measures and revised sales prices,” Mr. Adachi reported.
“For the most part, we believe materials have been stable in relation to the price for a barrel of oil,” Mr. Kristo said. “In 2008, it was a very difficult year in this regard, so 2009 has been better.”
“After a reduction in Q4 last year, the prices for base chemicals again started to increase sharply in early 2009. In a lot of cases this happened even before the rise in crude costs that have only served to further compound the increased pressure on base chemicals,” Mr. Zimmerman said. “Many of the suppliers to the ink industry have been unable to pass these increases on yet, due to the current market circumstances. There are, however, clear signs that the prices in some markets will start to rise in the very near future, even if the price of crude oil should remain stable or decrease.
“External public market data clearly shows an underlying upward trend for all major ink raw materials and this will affect the development of ink prices accordingly,” Mr. Zimmerman added. “Recent small increases in demand have seemed to trigger an upwards price spiral, as the capacity of major raw material suppliers, both of intermediates and our raw materials, has been reduced quite significantly in 2009. In addition, the overall raw material supply chain has been totally ‘de-stocked’ during the recession with the emptying of high cost stocks. Any additional increases in market demand could potentially lead to further disproportional price pressure.”
New Ink Technologies
To meet the needs of packaging designers and converters, ink manufacturers are developing a wide range of new products.
Ms. Hearn noted that Sun Chemical now has three global brands for packaging: SunStrato lamination ink series, Sun Visto for corrugated and SunSpectro for surface printing.
"Our SunPak Diamond inks are getting good interest from the sheetfed side," Ms. Hearn said. “It is a mineral-oil free technology, using 80 percent renewable resources the highest percentage in the ink industry. We continue to improve and invest in WetFlex technology. We have had some success in Europe with WetFlex, and we think the emphasis on the environment will help."
Mr. Kristo said that INX Digital just introduced its first web press at PRINT ’09.
“It’s ideal for short-run narrow web labels as well as customized and variable data applications,” Mr. Kristo said. “We are proud of our team who developed this product, which delivers brilliant full color UV LED-cure, single pass output at through-cure speeds up to 80’ per minute. We think the market will respond well since it can run materials widths of 6.3 inches and has a maximum printing image width of 5.5 inches. Plus, our specially designed EVOLVE line of UV inks are a perfect match for the highly focused Summit LED short wavelength UV light technologies that offer eye-popping color.”
Environmentally friendly inks and UV inks are also much in demand.
“We have introduced several new ink sets for commercial and package printing that have great performance, low VOC content and are as economical as possible,” Dr. Duncan said. “We feel that these are advantages that printers need to jumpstart their business. Also, our UV ink jet products seem to be in a growth mode.”
“UltraPro is our new state-of-the-art water-based ink for a broad range of applications,” Mr. Keathley said. “UltraPro is our most press stable ink offering to date and exhibits robust properties while minimizing VOC content and meeting the demands of increasingly more stringent environmental standards.”
“BCM developed Eekoflex inks and varnishes,” said Mr. Callif. “The Eekoflex inks and varnishes is a water-based ink system that replaces some petroleum-based resins with pine tree rosins.”
Photo courtesy of Color Resolutions International. |
“Further advancements include the new generation ink system Sterling II Flexo that has been proven to provide high end use lamination performance, comparable to other more expensive chemistries,” Mr. Zimmerman added. “This nitro urethane system has also become popular for its sharp printing and on-press stability, even being selected over other flexo process printing sets when its end use performance properties are not necessarily required. Latest modifications have proven to also print very well on high-speed packaging gravure presses that are becoming increasingly more popular within the industry.
“Additional introductions to the North American flexible packaging market include Flint Group’s new POLARTEK white ink,” Mr. Zimmerman said. “Scheduled for imminent launch, POLARTEK has been found to provide very low retained solvents while providing excellent lamination bonds across a wide range of substrates. Customers have already remarked on the high opacity and lower applied cost and we believe this next generation white ink will provide printers with the high performance white that is required in today’s competitive market.”
“We have expanded our product line-up of flexo printing inks for packaging applications, which we plan to launch at Pack Expo Las Vegas 2009. Toyo Ink is also looking to increase sales of eco-friendly product offerings, such as the solvent-recycling and water-based ink systems,” Mr. Adachi said.
Strongest Growth Areas
The packaging ink market does have areas of growth, particularly in flexible packaging and folding carton.
“Both folding carton and flexible packaging should see significant growth as the economy emerges from the recession and consumer spending rebounds,” said Dr. Don Duncan, Wikoff Color’s director of R&D. “Of the different ink chemistries, UV/EB products have done well over the last year and should continue to lead.”
“We are seeing growth in the snack food market, folding carton, flexible packaging and frozen foods,” Ms. Hearn said. “We have seen some growth in energy curable sales due to our Handschy acquisition in folding carton. On the other hand, single serve packaging is not as strong as it was as families have made adjustments in their buying.”
“Any niche related to consumer staples has done well, which would include corrugated, flexible packaging and labels,” Mr. Sickinger noted. “I believe the greatest growth will be in value added packaging. By value added packaging, I mean packaging with fine graphic and vibrant colors that attract the consumer. I find Costco a great place to visit to observe packaging and consumer trends.”
“Over proportionate growth can still be seen in high performance laminates,” Mr. Zimmerman said. “In addition, labels and flexible packaging continue to remain relatively strong, as this market sector is predominately driven by food related end uses, which should suffer less during a downturn.”
“We have seen the greatest growth in two areas,” Mr. Callif said. “The first area is food and beverage, because as consumers watch their expenses, they are consuming at home rather than going to restaurants and bars. The second area of growth and the area that we anticipate to be the greatest growth going forward is sustainability. Wal-Mart and other companies will continue to pursue sustainability because of the positive impact on the environment, increased consumer interest in ‘green’ products, and cost savings.”
Digital technologies are poised to make gains in some markets, although there remains obstacles to overcome. Mr. Kristo said that on the digital side, INX sees plenty of potential as traditional packaging companies become open to digital applications.
“We anticipate the digital print sector to continue to grow,” Mr. Callif added.
“There is much hype about digital,” Mr. Sickinger said. “I have attended a number of conferences recently that have put digital in prospective, and I have concluded that digital has a very long way to go to make a big gain at the expense of the conventional processes. If the truth be known, I would guess that those who have entered the market have yet to achieve any return on their investment. Also, I believe advances in conventional printing will offset some of the advantages of digital. The big money is still in digital ink for the consumer market.”
Mr. Keathley reported that efforts continue to be focused on sustainability and environmental issues. Mr. Kristo said that INX sees the greatest potential in providing environmentally friendly inks that do not sacrifice quality.
“Converters are searching for ways to make their product offerings more environmentally friendly,” Mr Keathley said. “Being able to offer a more sustainable ink at an economical price will provide opportunities in the future.”
As is the case with all printing ink segments, providing excellent service remains critical.
“We have a renewed approach to customer service and adding value to our customers supply chain,” Mr. Keathley said. “In 2009 a greater emphasis was placed on advanced color management to help our customers increase throughput and efficiency. As an ink company, if we can help the customer improve press room efficiency, we have a better opportunity to market the value of our product and build a lasting relationship as partners.”
“This is a time when partnerships, supplier confidence, trust and a proven track record of solving problems is increasingly important to consider,” Mr. Peters added. “Suppliers who can solve tricky performance issues, who have the resources to deal with sustainability and REACH and who can deliver quality products quickly are the ones that will excel over the long term.”
Mr. Sickinger sees some cause for optimism.
“Since mid-March, our color service lab has been inundated with new color match requests,” Mr. Sickinger said. “In the past, a rise in color matches has corresponded to a rise in sales. Until July this was not the case. I think consumer products companies were doing a lot of copy changes to address the consumer in recession and those customers are requiring more technical support than ever. I also believe our customers were more aggressively chasing new business, which translated into a rise in our lab expense.”
All in all, Mr. Peters said he hopes that packaging levels will enjoy a resurgence in the coming years.
“Wikoff, along with everyone else, is hoping that this trough we are in is, in fact, a trough, and not a plateau representing a new norm,” Mr. Peters concluded.