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    Features

    The 2017 Waxes and Additives Market

    Leading additive suppliers report they are seeing opportunities in the ink industry’s growth segments.

    The 2017 Waxes and Additives Market
    Photo courtesy of Shamrock Technologies.
    The 2017 Waxes and Additives Market
    Photo courtesy of Kustom Group.
    David Savastano, Editor11.20.17
    The additives market is increasingly important for ink manufacturers. Formulators count on waxes, defoamers, surfactants, dispersants and other key ingredients to make their inks perform at their best on press.

    Additives are a sizable market. Kusumgar, Nerlfi & Growney is beginning its Global Coating & Ink Additives, 2017-2022 study, and the firm estimates that worldwide consumption of the major additives in inks and coatings was 2.7 billion pounds, worth more than $5 billion in 2017. Kusumgar, Nerlfi & Growney breaks down the usage of the additives by volume at 92% for coatings and 8% for inks.

    According to Kusumgar, Nerlfi & Growney, rheology modifiers, including inorganic, synthetic and cellulose varieties, are the leading additive type with 38% of the volume and 36% of the dollar value.

    Dispersants make up 20% of volume and 18% of value, followed by foam control additives (17% of volume), slip/rub materials (12% of volume) and wetting agents (also 12% of volume).

    Meanwhile, in its study, “Ink Additives Market by Type (Rheology Modifiers, Slip/Rub Materials, Defoamers, Dispersants), Technology (Water-based, Solvent-Based), Process, Application (Packaging, Publishing, Commercial Printing), Region - Global Forecast to 2021,” Markets and Markets placed the value of the global ink additives market at $592.8 million in 2015, projecting it to reach $793.6 million by 2021, at a CAGR of 4.9% from 2016 and 2021.

    In the case of defoamers, Grand View Research placed the total market in 2016 at $2.93 billion. They believe that silicone-based defoamers are the largest sector, with water-based defoamers growing the fastest.

    It is clear that the additives market is not only essential for ink companies as well as other industries, but it is also an expanding market. It was also the target of a huge acquisition early this year, as Evonik completed its acquisition of Air Products’ Performance Materials Unit for $3.8 billion in the beginning of 2017.

    Leading additive suppliers report they are seeing growth in the segments that the ink industry is flourishing in. For example, John Jilek Jr., VP of sales and marketing for inksolutions LLC, said that the waxes and additives market moved with the market at about 2% to 4% growth.

    Shamrock Technologies VP Joon Choo noted that the wax and additives business grew in line with the general growth in the varying geographical and application segments of the industry.

    “In particular, the US economy is trending strong, and we see it continuing to drive growth globally,” added Choo.

    David Grabacki, president of keim additec surface USA, LLC, reported that the additive industry faced raw material price increases, especially for monomer-based products.

    “In general, however, the additive situation remains stable and calm,” added Grabacki. “Quite different is the situation for raw material based on waxes. A global and well-known wax producer came up with force majeure that led to lower quantities in the market and a general price increase for waxes.”

    “From our vantage point, the wax industry fared well in 2017,” said John McAllister, global sales director for Micro Powders. “Micro Powders’ growth came largely from increased demand for our highly efficient composite wax additives.”

    Greg Orange, sales director – PCA and wax for Munzing North America, reported that the industry enjoyed good growth during 2017, and anticipates continued double-digit growth.

    In particular, Orange noted that Munzing is working with its packaging customers on new technology, regulatory issues and managing costs.

    Gene Cassidy, senior manager at Lawter, Inc., reported that sales to the offset ink markets declined about 2% to 4% on a year-over-year basis.

    “Most would say the market performance as a whole in 2017 has been similar to recent years with fairly moderate growth,” observed Jerry Trauth, product manager wax/ink applications at Kustom Group. “However, with available capacity and an aggressive sales approach, we were able to develop steady growth and increased market share in 2017, specifically with our wax and additives line.

    New products in our specialty coatings line along with new regulatory compliant offerings have added to an overall good year for Kustom.”

    David Towell, product manager – coatings for Michelman, noted 2017 was an interesting year in the world of waxes and additives.

    “Business remains strong, especially in digital and packaging applications,” Towell continued. “As European REACH speeds toward full implementation in May 2018, suppliers and customers scrambled to obtain compliance and assess their sources. Some supply issues in polyethylene impacted the market and drove up prices.”

    The raw material market is more volatile this year, either through consolidation, environmental regulations or weather-related disasters, and additive suppliers are being impacted by raw material shortages and/or pricing.

    “We are indeed seeing increases in raw material costs across the board, due to various factors, to consolidations, currency movements, stricter environmental and regulatory oversight as well as weather driven and geopolitical events,” said Choo.

    “There have been several shortages for raw materials this year and as a result prices have increased,” Orange reported.

    “Our wax costs are very much tied to the price of crude oil,” Cassidy said. “We expect the price of crude to stay within a narrow band of current price levels, which should mean price stability in most wax products for most of 2018.”

    “Most will agree that over the past few years, raw material pricing has been fairly stable,” Trauth said. “Recent signs point towards that stability coming to an end, with price increases already happening with ink oils on the oil-based side and monomers on the energy cure side. We will have to wait and see how much the weather-related disasters add to the volatility of the raw material market in the coming months. With frequent communications up and down the supply chain, we hope to stay out in front of these raw material issues.”

    Growth Areas for Inks

    The key growth areas for the ink industry are packaging and inkjet. Not surprisingly, these are the segments where additive suppliers are doing best.

    Choo pointed out that as inks and coatings formulations continue to morph towards being regulatory compliant, Shamrock Technologies is working with customers to tweak formulations accordingly.

    “For packaging in particular, the low migration inks offer an opportunity as well as a challenge, and we are developing products that are more easily incorporated and functional,” said Choo.

    Trauth reported that the two biggest challenges for packaging today are increased use of specialty coatings using various print methods and elimination of Prop 65 materials.

    “Visual and sensory effect products for packaging printing continues to be in high demand and we are being asked to provide these specialty coatings for many different substrates and compliant to certain requirements like 21CFR, Nestle and Swiss and low migration” Trauth added. “Strike-Thru is very popular and challenging with the variety of stocks being used. Eliminating Prop 65 materials from energy curable greatly reduces the available materials to produce coatings that are still capable of effectively protecting packaging and performing on press at expected levels.”

    Jilek also noted that Prop 65 is a focus for inksolutions.

    “Packaging printers are all focusing on individual approval or disapproval lists to have the best inks used for low migration and low odor,” Jilek said. “Most printers are focused on the Nestle 2014 or Swiss Annex 6. Inksolutions has focused on Prop 65 as we have had some customers’ printers use this criteria. Also we see when we formulate using Prop 65 guidelines, most all our formulas then conform with Nestle and Swiss.”

    “The main demands from the packaging industry that we are facing are lower pricing and the need for fulfilling food contact regulations, besides the need for specialized additives for film substrates,” Grabacki said. “Due to the structure of the keimgroup, comprising e.g. a backward integration in waxes for micronized mju:wax and aqueous ULTRALUBE wax additives, but also producing non-wax based SILCO coatings additives, we can offer a variety of competitive additives from one source.”

    McAllister noted that packaging inks are largely about making the product stand out through visual and tactile distinction.

    “We engage our customers to understand their needs so we can develop innovative solutions for texture, matting and soft touch,” McAllister said.

    Alexander Kehl, marketing manager for inks at Evonik, noted that Evonik is facing a growing demand for food contact compliances.

    “The awareness in the industry for safety of substances – especially those coming into contact with food – has significantly increased over the past years,” Kehl added. “It is our priority to help customers by providing additive solutions and technical guidance for those regulatory requirements.”

    “Brand owners are beginning to differentiate themselves through superior packaging,” said Arica Drake, marketing manager – flexible packaging for Michelman. “Haptic overprint varnishes (OPVs) provide extraordinary first impressions because of the enhanced look and feel they provide. Customers also have a need to be able to register print these OPVs to create even more appeal.”

    Digital printing requires a different set of requirements.

    Dr. Christian Maus, technical market specialist for inks at Evonik, reported that customers face challenges when searching for suitable additives to achieve the requirements related to textile inkjet inks.

    Trauth noted that Kustom supplies sizings, primers and coatings for the digital and inkjet ink market.

    “The chemistry of these inks is completely different and therefore requires a much more robust coating formulation,” Trauth pointed out. “Energy curable inkjet continues to request coatings that will help with print receptivity and definition on challenging substrates. We are providing substrate sizings of various chemistries to support these requests. Printers continue to ask for aqueous inkjet receptive coatings to eliminate the need for knockout areas.”

    Towell said that inkjet printing provides the advantages of the speed and width of conventional printing with the versatility of digital printing in a single machine.

    “For this rapidly increasing segment of digital printing in general, we are looking for close cooperation with our customers, as well as with other raw material and equipment suppliers serving this market to offer individual customized solutions,” Grabacki said.

    Challenges for Food Packaging

    In particular, food packaging is of great interest when it comes to regulatory concerns, as brand owners are very interested in ensuring that their products and the packaging they are in are as safe as possible. Waxes and additive suppliers are playing a major role in this compliance.

    “Waxes pose a generic compatibility issue when added to water-based formulations – as most folks know, oil and water do not mix – and waxes in general are a higher molecular weight version in solid form,” Choo observed. “To enable ease of incorporation and in-can stability, these waxes have to be modified, or functionalized, so that they inherently exhibit a higher surface energy to be more readily mixed in. At the same time, the functionalization must meet the FDA regulations for direct and/or indirect food contact. Our new products are developed with these fit-for-use constraints in mind.”

    McAllister said that one of the challenges specific to food packaging is an increase in complex design and elaborate printing.

    “The package design, production process and contents need to be fully considered when formulating an ink,” McAllister continued. “The finished product must offer sufficient resistance to physical and chemical stress, and this creates an opportunity for our industry to offer more efficient specialty waxes.”

    Trauth said that differentiating the various requirements like low odor, low migration, Nestle or Swiss compliance, FDA and Prop 65 labeling is the biggest challenge.

    “Are the products we currently are providing meeting these standards and will they perform the same when modified if not?” Trauth added. “Confirming compliance and staying updated with suppliers for the various raw materials also presents a big challenge. Gathering this information is very time consuming, but must be done.”

    “Our products must comply with a variety of regulations so that they do not release substances into the food in quantities that could endanger human health,” Evonik’s Kehl said. “Our challenge is to provide additives that fulfill those requirements without compromising performance. Therefore, we offer a broad spectrum of additives, from defoamers to dispersants to surfactants, that meet the vast majority of actual compliance requirements of our customers.”

    Expectations for 2018

    As packaging and digital printing grow, so will the need for additives.

    “We expect continued growth with a new series of customer-focused development products,” Choo said.

    “In 2018, we expect remarkable growth due to the fact that key accounts focused on better supply chain situation and innovative products that fulfill all kind of requirements technically and regarding labeling,” Grabacki said.

    “We feel positive about 2018, as many of our legacy waxes continue to sell well into the ink market, and recently introduced grades are finding their way into new water-based and energy cure systems,” said McAllister. “As with 2017, we predict that most of our growth in graphic arts will happen in the US and Europe.”

    “Better than expected growth in 2017 makes us very optimistic for the coming year,” Trauth said. “Internal process improvement projects and additional equipment added over the last couple years will continue to help us respond quickly to customer requirements. We continue to expand our global presence in growth areas such as China, Korea, India and Europe.” 
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