Sean Milmo, European Editor03.07.17
Europe’s printing sector, together with its ink producers and other suppliers, have reasons to feel relatively optimistic at the moment after a year in which economic growth spread across most the region.
In its winter economic forecast issued in mid-February, the European Commission, the European Union’s Brussels-based executive, predicted that the economies of all 28 EU member states would continue to grow this year and next year as they did in 2016.
GDP growth in the EU as a whole will reach 1.8% this year and in 2018, with private consumption being the main engine in the region’s recovery.
In major printing sectors like packaging, the economic revival should help to demand to gather pace as consumer expenditure increase. At the same time, it should help to continue to bolster a range of thriving niche segments where growth has been advancing at levels well above GDP rises. This has been in many cases because of the application of new technologies, mostly based on digital processes, have been adjusted to print on unconventional substrates.
Currently, advertising agencies are re-evaluating the value of print amidst concerns about the metrics used to measure the impact of the content of digital media and what is seen as a lack of transparency among digital media operators, according to Ulbe Jelluma, Print Power’s marketing manager.
“Advertisers, brand owners, agencies and media owners express the need to re-evaluate their digital media share of the media mix,” he explained. “Digital media will remain an important part of the mix but the three parties are eager to develop a better balance between the (media) channels.”
However, media pundits believe that hopes of any significant switch from digital to the print are unrealistic. They reckon that the relentless rise of the electronic media will continue for at least a few more years.
Print consultancy Smithers Pira expects that after a fall in both volume and in value in recent years, the value of the European print market will rise slightly to €160 billion ($170 billion) by 2021 but will continue to decrease by an average 1.6% per year by volume. The packaging sector will be among those which will gain sales with its share of the total market, rising from 45% in 2011 to 57% in 2021, while that of publication print will drop from 22% to 14%.
Disruption of Key Raw Materials
Across Europe, raw material prices have been pushed up, in the wake of economic growth, by supply/demand imbalances, which have been impacting key chemicals for ink and coatings formulations. This has been a recurring problem is recent years in Europe, which has been linked not only to supply conditions in the region but also in China, where chemicals exports can frequently be interrupted by government regulations, plant closures and transport difficulties.
The dangers of sudden supply disruptions of vital materials was sharply illustrated in late January this year when a fire stopped production at a titanium dioxide plant at Pori, Finland, owned by Huntsman Corporation of the US. The 130,000 ton-a-year facility accounts for around 10% of Europe TiO2 demand but a much larger proportion of TiO2 for printing inks production because it produces much of Huntsman’s graphic arts grade of the pigment.
The incident had by mid-February exerted “severe and immediate pressure” on the input costs of the ink manufacturing sector, according to a statement by the European Printing Ink Association (EuPIA), Brussels, representing ink makers. It warned that although Huntsman had pledged to repair the damage at the site as quickly as possible, there could be “serious shortages” in the supply of ink-grade TiO2 throughout 2017.
Double-digit price rises have already been announced by TiO2 suppliers as a result of the shortages in the market. This follows a series of increases last year after the producers complained about the poor returns from low prices. In fact, Huntsman has been planning to spin off its TiO2 operation.
Chinese producers could fill the supply gap left by the fire at the Pori plant. But the Chinese government has recently been imposing mandatory output cuts on producers because of high levels of air pollution. EuPIA has warned that printers may have to evaluate alternative grades of white pigments if they want to continue printing.
There are already fears among inks and coatings producers that in the longer term restrictions could be placed on the use of TiO2, not because of supply constraints but due to the application of the EU’s legislation on safety of industrial chemicals.
The Helsinki-based European Chemicals Agency (ECHA), which is responsible for the implementation of the EU’s main industrial chemicals legislation, is currently assessing a French government proposal that TiO2 be categorized as dangerous on its labels due to its being possibly carcinogenic through inhalation.
The Effects of Consolidation
Increased pressure on costs – from raw material prices, regulations and other items – have been causing ink producers and their raw material to seek, often through mergers and acquisitions, to consolidate their activities or to move into upper end sections of the market in order to increase profitability through bigger margins.
Sun Chemical has been continuing its diversification into segments like glass and metals decoration inks and wide-format and textile digital inks.
It has become a pioneer in advanced printable barrier coatings in food packaging. Like some of its competitors, it has also been moving further into conductive inks and printed electronics. With its Japanese parent company DIC, it acquired late last year UK-based Gwent Electronic Materials, a leading manufacturer of conductive inks, pastes and powders for the printed electronics market.
Sun Chemical has also been reinforcing its position in the publication inks market. It confirmed in September that it had taken over the European publication gravure inks business of Flint Group.
Siegwerk, the leading German ink producer, reduced its involvement in publication inks through the sale in mid-2016 of its web offset inks business to Flint Group, although Siegwerk is still retaining its publication gravure operation. The deal will enable the company to concentrate more fully on its long-term strategy of becoming an even bigger global player in packaging inks.
Meanwhile, Flint Group has been focusing on building up its new digital printing solutions division set up following its 2015 takeover of the Dutch-based digital press manufacturer Xeikon. The division aims to be a leading global print consumables and solution provider to the packaging and print media industries.
Flint Group is pursuing a strategy of developing and manufacturing not just its core inks products but an extensive portfolio of printing consumables. These include a vast range of conventional and energy-curable inks and coatings, pressroom chemicals, printing plates and equipment, printing blankets and sleeves, and pigments and additives.
Diversifying into Digital
Diversification driven by innovation was a major theme in the drupa international printing exhibition in Dusseldorf, Germany, in mid-2016, which had approximately 260,000 visitors, three-quarters of them from abroad, and 1,837 exhibitors from 54 countries.
The 11-day show has expanded its coverage to include 3D printing, touch-point packaging and printed electronics.
A large proportion of the innovations introduced at the exhibition were based on digital printing technologies, which although still accounting for a relatively small percentage of total printing production volumes are the main impetus behind current value growth in a range of segments.
“drupa 2016 will be remembered as the inflection point in the industry’s transition from mechanical printing to digital,” said Benny Landa, chairman of Landa Corp., the Israel-based digital press manufacturer. “In the past, digital printing vendors had to try to convince the market that digital is the way to go. It was a ‘push’ selling motion.
“Now, for the first time, the situation has reversed,” he continued. “There is a very strong ‘pull’ from the market, driven by both customers and brand-owners, who are now demanding digital printing. It seems that the market leaders – in packaging, commercial printing and in publishing – have come to the realization that they simply must go digital.”
The exhibition underlined how much leading manufacturers of conventional presses and equipment, some of which ran into financial difficulties a few years ago because of their reliance on high volume, long run processes, have moved into digital.
This is often being done in partnership with specialists in digital inks and processes. In fact, a relatively high number of technologies announced or on display at drupa stemmed from alliances. This highlighted the current importance of partnerships, particularly those between ink producers and press manufacturers, in achieving digital innovations
Heidelberg launched at drupa its Primefire 106 press, the first industrial digital printing system in a B1 format, which is being powered by a Fujifilm inkjet technology.
The German press equipment manufacturer says it is undergoing what it calls a “digital transformation.” It is setting up a division that will develop, manufacture, and supply digital technologies and products for new business models, while another division will devise and market these models.
“Heidelberg goes digital,” said Rainer Hundsdoerfer, Heidelberg’s chief executive. “We are getting the company fit for the digital future.”
Koenig & Bauer Group (KBA), which already has an alliance with HP in the development of a color inkjet web press for corrugated packaging printing, announced at drupa details of a deal with Xerox Corporation to develop a digital B1 sheetfed press for folding carton printing.
KBA, which counts itself as the world’s oldest press manufacturer, has made a big expansion into packaging printing with both digital and conventional processes to compensate for a sharp drop in sales in its core business of web offset publication presses. It is now present in the six main packaging segments of flexible, corrugated, rigid plastics, glass and metal.
“The global packaging market is growing faster than the world’s population and the global national product,” said Claus Bolza-Schuenemann, KBA’s chief executive. “We are even leading in folding carton printing, glass and metal decoration. The alliances with HP and Xerox fit in with our strategy.”
Looming on the horizon is the prospect of Brexit or the UK leaving the EU causing major disruptions to long-established supply chains in printing products, inks and other consumables and services. After Germany, the UK has the EU’s largest inks production and printing sectors which export most of their output to the rest of the EU.
After two years of negotiations between the UK and the rest of the EU, due to start in March, Brexit is scheduled to take place in 2019.
Even before then it may have become clear that following the UK’s departure a tariff and non-tariff barrier will be erected to end the free trade between the UK and the EU. Multinational and even UK owned ink producers and printers will decide to move production to mainland Europe to ensure they stay within the EU.
A radical reorganization of the European printing sector will have begun.
European Editor Sean Milmo is an Essex, UK-based writer specializing in coverage of the chemical industry.
In its winter economic forecast issued in mid-February, the European Commission, the European Union’s Brussels-based executive, predicted that the economies of all 28 EU member states would continue to grow this year and next year as they did in 2016.
GDP growth in the EU as a whole will reach 1.8% this year and in 2018, with private consumption being the main engine in the region’s recovery.
In major printing sectors like packaging, the economic revival should help to demand to gather pace as consumer expenditure increase. At the same time, it should help to continue to bolster a range of thriving niche segments where growth has been advancing at levels well above GDP rises. This has been in many cases because of the application of new technologies, mostly based on digital processes, have been adjusted to print on unconventional substrates.
Currently, advertising agencies are re-evaluating the value of print amidst concerns about the metrics used to measure the impact of the content of digital media and what is seen as a lack of transparency among digital media operators, according to Ulbe Jelluma, Print Power’s marketing manager.
“Advertisers, brand owners, agencies and media owners express the need to re-evaluate their digital media share of the media mix,” he explained. “Digital media will remain an important part of the mix but the three parties are eager to develop a better balance between the (media) channels.”
However, media pundits believe that hopes of any significant switch from digital to the print are unrealistic. They reckon that the relentless rise of the electronic media will continue for at least a few more years.
Print consultancy Smithers Pira expects that after a fall in both volume and in value in recent years, the value of the European print market will rise slightly to €160 billion ($170 billion) by 2021 but will continue to decrease by an average 1.6% per year by volume. The packaging sector will be among those which will gain sales with its share of the total market, rising from 45% in 2011 to 57% in 2021, while that of publication print will drop from 22% to 14%.
Disruption of Key Raw Materials
Across Europe, raw material prices have been pushed up, in the wake of economic growth, by supply/demand imbalances, which have been impacting key chemicals for ink and coatings formulations. This has been a recurring problem is recent years in Europe, which has been linked not only to supply conditions in the region but also in China, where chemicals exports can frequently be interrupted by government regulations, plant closures and transport difficulties.
The dangers of sudden supply disruptions of vital materials was sharply illustrated in late January this year when a fire stopped production at a titanium dioxide plant at Pori, Finland, owned by Huntsman Corporation of the US. The 130,000 ton-a-year facility accounts for around 10% of Europe TiO2 demand but a much larger proportion of TiO2 for printing inks production because it produces much of Huntsman’s graphic arts grade of the pigment.
The incident had by mid-February exerted “severe and immediate pressure” on the input costs of the ink manufacturing sector, according to a statement by the European Printing Ink Association (EuPIA), Brussels, representing ink makers. It warned that although Huntsman had pledged to repair the damage at the site as quickly as possible, there could be “serious shortages” in the supply of ink-grade TiO2 throughout 2017.
Double-digit price rises have already been announced by TiO2 suppliers as a result of the shortages in the market. This follows a series of increases last year after the producers complained about the poor returns from low prices. In fact, Huntsman has been planning to spin off its TiO2 operation.
Chinese producers could fill the supply gap left by the fire at the Pori plant. But the Chinese government has recently been imposing mandatory output cuts on producers because of high levels of air pollution. EuPIA has warned that printers may have to evaluate alternative grades of white pigments if they want to continue printing.
There are already fears among inks and coatings producers that in the longer term restrictions could be placed on the use of TiO2, not because of supply constraints but due to the application of the EU’s legislation on safety of industrial chemicals.
The Helsinki-based European Chemicals Agency (ECHA), which is responsible for the implementation of the EU’s main industrial chemicals legislation, is currently assessing a French government proposal that TiO2 be categorized as dangerous on its labels due to its being possibly carcinogenic through inhalation.
The Effects of Consolidation
Increased pressure on costs – from raw material prices, regulations and other items – have been causing ink producers and their raw material to seek, often through mergers and acquisitions, to consolidate their activities or to move into upper end sections of the market in order to increase profitability through bigger margins.
Sun Chemical has been continuing its diversification into segments like glass and metals decoration inks and wide-format and textile digital inks.
It has become a pioneer in advanced printable barrier coatings in food packaging. Like some of its competitors, it has also been moving further into conductive inks and printed electronics. With its Japanese parent company DIC, it acquired late last year UK-based Gwent Electronic Materials, a leading manufacturer of conductive inks, pastes and powders for the printed electronics market.
Sun Chemical has also been reinforcing its position in the publication inks market. It confirmed in September that it had taken over the European publication gravure inks business of Flint Group.
Siegwerk, the leading German ink producer, reduced its involvement in publication inks through the sale in mid-2016 of its web offset inks business to Flint Group, although Siegwerk is still retaining its publication gravure operation. The deal will enable the company to concentrate more fully on its long-term strategy of becoming an even bigger global player in packaging inks.
Meanwhile, Flint Group has been focusing on building up its new digital printing solutions division set up following its 2015 takeover of the Dutch-based digital press manufacturer Xeikon. The division aims to be a leading global print consumables and solution provider to the packaging and print media industries.
Flint Group is pursuing a strategy of developing and manufacturing not just its core inks products but an extensive portfolio of printing consumables. These include a vast range of conventional and energy-curable inks and coatings, pressroom chemicals, printing plates and equipment, printing blankets and sleeves, and pigments and additives.
Diversifying into Digital
Diversification driven by innovation was a major theme in the drupa international printing exhibition in Dusseldorf, Germany, in mid-2016, which had approximately 260,000 visitors, three-quarters of them from abroad, and 1,837 exhibitors from 54 countries.
The 11-day show has expanded its coverage to include 3D printing, touch-point packaging and printed electronics.
A large proportion of the innovations introduced at the exhibition were based on digital printing technologies, which although still accounting for a relatively small percentage of total printing production volumes are the main impetus behind current value growth in a range of segments.
“drupa 2016 will be remembered as the inflection point in the industry’s transition from mechanical printing to digital,” said Benny Landa, chairman of Landa Corp., the Israel-based digital press manufacturer. “In the past, digital printing vendors had to try to convince the market that digital is the way to go. It was a ‘push’ selling motion.
“Now, for the first time, the situation has reversed,” he continued. “There is a very strong ‘pull’ from the market, driven by both customers and brand-owners, who are now demanding digital printing. It seems that the market leaders – in packaging, commercial printing and in publishing – have come to the realization that they simply must go digital.”
The exhibition underlined how much leading manufacturers of conventional presses and equipment, some of which ran into financial difficulties a few years ago because of their reliance on high volume, long run processes, have moved into digital.
This is often being done in partnership with specialists in digital inks and processes. In fact, a relatively high number of technologies announced or on display at drupa stemmed from alliances. This highlighted the current importance of partnerships, particularly those between ink producers and press manufacturers, in achieving digital innovations
Heidelberg launched at drupa its Primefire 106 press, the first industrial digital printing system in a B1 format, which is being powered by a Fujifilm inkjet technology.
The German press equipment manufacturer says it is undergoing what it calls a “digital transformation.” It is setting up a division that will develop, manufacture, and supply digital technologies and products for new business models, while another division will devise and market these models.
“Heidelberg goes digital,” said Rainer Hundsdoerfer, Heidelberg’s chief executive. “We are getting the company fit for the digital future.”
Koenig & Bauer Group (KBA), which already has an alliance with HP in the development of a color inkjet web press for corrugated packaging printing, announced at drupa details of a deal with Xerox Corporation to develop a digital B1 sheetfed press for folding carton printing.
KBA, which counts itself as the world’s oldest press manufacturer, has made a big expansion into packaging printing with both digital and conventional processes to compensate for a sharp drop in sales in its core business of web offset publication presses. It is now present in the six main packaging segments of flexible, corrugated, rigid plastics, glass and metal.
“The global packaging market is growing faster than the world’s population and the global national product,” said Claus Bolza-Schuenemann, KBA’s chief executive. “We are even leading in folding carton printing, glass and metal decoration. The alliances with HP and Xerox fit in with our strategy.”
Looming on the horizon is the prospect of Brexit or the UK leaving the EU causing major disruptions to long-established supply chains in printing products, inks and other consumables and services. After Germany, the UK has the EU’s largest inks production and printing sectors which export most of their output to the rest of the EU.
After two years of negotiations between the UK and the rest of the EU, due to start in March, Brexit is scheduled to take place in 2019.
Even before then it may have become clear that following the UK’s departure a tariff and non-tariff barrier will be erected to end the free trade between the UK and the EU. Multinational and even UK owned ink producers and printers will decide to move production to mainland Europe to ensure they stay within the EU.
A radical reorganization of the European printing sector will have begun.
European Editor Sean Milmo is an Essex, UK-based writer specializing in coverage of the chemical industry.
