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    Features

    The 2019 Latin American Ink Market

    Ink manufacturers are seeing growth throughout the diverse region, and are adding new operations to further their expansion.

    The 2019 Latin American Ink Market
    INX’s new metal deco ink facility in Brazil. (Photo courtesy of INX International Ink Co.)
    The 2019 Latin American Ink Market
    From left, Mauricio Frias, sales/tech rep for Mexico; Robert Callif, president of BCM Inks; David Yanez, commercial director for Mexico; and Omar Perales, plant manager for Mexico, standing within the BCM Mexico facility. (Photo courtesy of BCM Inks)
    David Savastano, Editor09.17.19
    Latin America is a growing economic power. With a population of more than 620 million in 2016 according to World Population Review, the region is diverse; Brazil (200 million people) and Mexico (120 million people) are the most populous nations. It is not a homogenous region; each of the nations has its own set of dynamics.

    The economies in Latin and South America are continuing to grow, which is helping the printing and ink industries. Ink World places the region’s ink market at more than $1 billion annually, led by Brazil and Mexico, and leading ink manufacturers are active throughout Latin America.

    INX International acquired Creative Industria e Comercio Ltda. a few years ago, and added a new metal deco ink facility in 2018. This has led to growth for INX International in South America.

    “We increased more than 70% in sales to South America in 2018,” said Jose Carlos Ribeiro, director of INX do Brasil. “The expectation is to grow at least 30% in 2019 and we have a few new projects for next year, reaching other countries with INX technologies that we don’t work with in the area today.

    “Brazil is still recovering from a difficult economic situation that made 2018 unstable,” Ribeiro continued. “Business in Venezuela is decreasing considerably. Balancing with the other countries last year presented minimum growth in the region. The economies are the main drivers, but there is also a movement of more product diversity and smaller packages.”

    Fernando Tavara, president, Sun Chemical Latin America, said that despite the ongoing turbulence affecting the largest markets in Latin America, particularly Brazil, Mexico and Argentina, Sun Chemical experienced a good year for growth.

    “The reason for Sun Chemical’s growth has more to do with regional strategy more than the economic situation,”  Tavara said. “For example, emphasis on color centers and expanded color gamut has generated tremendous growth and interest for the company. Our leadership in sustainability and regulatory compliance brings further value-added opportunities that have benefitted our customers across the region. Yet another factor is that our customers tend to be industry leaders who compete well.

    The economic situation in Latin America remains extraordinarily difficult, but Sun Chemical is well-positioned to meet the needs of customers across the region.”

    Pablo Paduani, VP and BU head, flexible packaging, Latin America for Siegwerk, reported that Siegwerk saw a modest volume growth across the Latin and South American region (LATAM) in 2017 and 2018.

    “This can be primarily attributed to political and economic instability, even though the Mexican, Colombian and Peruvian economies already showed a slow but trustable recovery in comparison to last year,” Paduani said. “We see that Mexico, Colombia, Peru and the countries in Central America continue to grow at a steady pace. For Siegwerk, Brazil is recovering from difficult last years.

    “Across our LATAM region, Brazil and Argentina are the countries which still experience a contraction in business. In addition, the high volatility in many local currencies has also had a negative impact on profitability,” Paduani added. “Siegwerk has seen brand owners looking for more competitive options, and in some cases going as far as moving print jobs to countries with more convenient cost structures. Across LATAM, we have seen drastic drops in print media volumes.”

    Richard Möller, managing director hubergroup Brasil, said that, last year, Latin and South America was further recovering from negative economic scenarios in several countries.

    “We started to see some positive effects in some segments of the printing industry,” Möller said. “The carton and flexible packaging market have been growing, and UV curing technologies (especially LED) are in expansion.”

    Sergio Pera, director, Toyo Ink Brasil Ltda., reported that growth for Latin America remains weak in the first half of 2019.

    “Weaker global growth and lingering US-China trade tensions have also hurt the Latin and South American region through their impact on exports,” Pera said. “Uncertainty stemming from a domestic policy in some of Latin America’s bigger economies, such as Brazil, Argentina and Mexico, appear to be hindering recovery.

    “Amid a slowdown in world growth, the Latin American printing ink industry was also impacted but still maintained relatively sluggish growth,” Pera continued. “The Toyo Ink Group made efforts to optimize its business scale by bolstering its global bases. This resulted in production expansion for conventional sheetfed inks in Brazil and increased exports bound for Mexico and the United States. We also make progress in expanding UV sales for paper containers to markets in Central and South America.”

    Daryl Collins, VP – international and corporate services at Wikoff Color, noted that Wikoff Color did well in the LATAM region.

    “2018 was a year of strong sales for Wikoff in LATAM, particularly in South America,” he said.

    “Brazil and Mexico continue to lead the growth of the graphic arts industry in LATAM. For Wikoff, our operation in São Paulo, Brazil had a direct impact on our sales growth in the region,” added Daniel Cavalcanti, regional manager of Latin America for Wikoff Color

    Ernesto Sanchez, managing director for Sanchez SA de CV, Mexico’s leading ink manufacturer, noted that the free trade agreement with the US and Canada looks like it is near a good ending for the three countries.

    “Mexico’s Congress has approved the new USMCA, and Canada’s and US’s congresses are in their way to do so,” Sanchez said. “This takes a lot of noise out of our economy due to the big dependence our country has with the US, mainly with the export of cars. Although there are big and new concerns regarding the tariff war between the US and China, I think that signing the new USMCA is good news for our country.

    “Inside our country, we have our own economic issues, where the populistic economic decisions taken by our new left government and their slow spending at the beginning of the present year has brought big concerns about our country entering into a recesión,” Sanchez added. “Nevertheless, once the government has started to spend, we have experienced more movement with our customers, mainly ones linked to packaging.”

    With an eye on increasing its business in Mexico, Cincinnati, OH-based BCM Inks, a specialist in water-based flexo inks, varnishes and digital primers for corrugated and display printing, recently opened BCM Inks de Mexico, its new manufacturing facility in Monterrey, Mexico.

    Robert Callif, president and COO of BCM Inks, noted that BCM Inks has been selling to the Mexican marketplace for more than 20 years, and the time was right to open a plant in Mexico.

    “As our customer base grew, we felt that in order to provide the Mexican customers with the same service that we provide our US-based customers, it was time to open a facility in Mexico,” Callif said. “The new facility will benefit our Mexican customers with a quicker delivery and response time. Since we opened our facility in Mexico at the beginning of the year, we have seen tremendous growth. I expect to see double-digit growth year over year because I feel BCM brings a unique ink solution to the Mexican marketplace.”

    “The growth of the industry strongly depends on the economic situation of each country,” hubergroup Brasil’s Möller observed. “Bolivia, Mexico and Paraguay are the countries with the largest growth in the printing segment. Most other countries have been stable.”

    Per Ribeiro, Colombia, Chile and Peru are enjoying expansion. “There is a good possibility Brazil will start to grow again in the second half of 2019, and we hope to reach good results in 2020,” Ribeiro said.

    “Growth in the graphic arts business has been slow in Brazil, Mexico and Argentina,” said Tavara. “The economy in the three largest markets in the region have certainly softened, but there has been strong growth in Peru with some moderate ongoing growth in Chile and Colombia.”

    “For Toyo, we saw moderate sheetfed growth in Brazil and Mexico due to expanded production and increased exports to Mexico and the United States,” Pera added.

    Investments in Latin America

    To meet the needs of their converter customers, ink companies have been adding new facilities and acquiring local ink companies in recent years. For example, Siegwerk added Tupahue Tintas in late 2017 and continues to invest in the region.

    “By adding Tupahue Tintas in December 2017 we particularly strengthened our market coverage and successfully expanded our packaging business in Brazil,” said Paduani. “Since then, Siegwerk continues to grow in Brazil and consequently in South America where the company has modern facilities to optimally serve our customers. We will continue our long-term investment plan for LATAM.”

    Collins noted that Wikoff Color added Verti Products Quimicos in late 2017, which has led to growth for Wikoff in South America.

    “Our acquisition in late 2017 definitely led to growth in South America,” Collins said. “Our São Paulo operation not only gave us access to the largest market in South America but also gave us a foothold in the LATAM region as a whole. Verti was always known in the flexible packaging industry for great products and service; today as Wikoff Color we have expanded our reach into other markets and chemistries such as label and UV/LED and EB. We continue researching investment opportunities in the region as our growth requires further expansion.”

    Möller reported that hubergroup has made some important investments in South America in the last few years.

    “We opened new productions plants in Chile, Colombia, and Brazil, for which we have invested in new equipment and technologies as well as strong training for the professionals to guarantee high levels of automation and quality control,” Möller said. “These ongoing investments are preparing hubergroup for the growth opportunities of the upcoming years.”

    Tavara said that Sun Chemical has made recent investments in Peru.

    “We relocated our operation to a new facility that features expanded production capabilities and helps manage the needs of customers in that region,” Tavara said.

    “Significant investment has also been made in building color centers in Mexico and other countries. A new color center is coming to Ecuador and with six color centers across the region, we are well ahead of the competition on this front. Significant investment has also been made for a new site in Monterrey, Mexico. Upgrades to our Bonsucesso operation in Brazil are close to completion.”

    Outlook

    Ink industry executives are seeing plenty of reasons for optimism in Latin America.

    “Our expectations for the Latin and South American market are very positive, except for decreasing printing segments such as coldset,” said Möller. “However, the growth of the industry will strongly depend on the economic situation of each country. For this reason, we, for example, expect a positive trend for the Brazilian market, where a new economic policy is being implemented with objectives to boost the business and consumption environment.”

    “With Brazil’s economy starting to grow again, the whole area will benefit and the market should grow and develop considerably,” Ribeiro said. “We are planning to expand our market share, keep being present, and be able to offer the best products and services to our local and global customers.”

    “Some clouds over the Argentinian, Brazilian and Mexican economies for the remainder of the year are still anticipated,” Tavara added. “The recent primary elections in Argentina, forexample, substantially increased the uncertainty and provided a glimmer of hope for economic change in the new year. We expect the rest of the region will likely continue with the current trends. It is a challenging region to navigate, but there are many opportunities for Sun Chemical, and we are in an excellent position to continue growing despite the challenges.”

    Pera said that the Latin and South American printing and packaging industry growth is expected to remain weak, but there are opportunities ahead.

    “That said, we do see a growth trend in the use of plastic in packaging, despite the concerns being raised about plastic’s environmental impact,” Pera said. “Increased environmental consideration from regional consumers and governments looking for lighter and recyclable packaging solutions is fueling demand for plastic packaging. We expect flexible plastic packaging to make big strides in markets such as the healthcare industry, due to its high durability and high barrier properties, and enhanced shelf life.”

    “Despite current economic challenges, we expect moderate growth in Latin America going forward,” said Paduani. “We will continue to work closely with our customers to always provide them with the best guidance and support, technical know-how, latest innovation and global expertise for sustainability and
    PSR compliance.”

    “Despite some economists’ predictions of a slowing economy and the impact of US and China trade relations, Wikoff maintains an optimistic outlook that we will continue seeing growth in the LATAM region,” Collins added. “Brazil’s new pro-business government has contributed to a more encouraging mood in the market. As the government continues to work on a bilateral trade agreement, privatizations and opening the economy, it is expected to impact the industry not only in Brazil but in the entire South American region.” 
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