David Savastano, Editor11.12.19
For the ink industry, 2019 has turned out to be a fairly good year. Ink industry executives say that they are seeing growth in sales, as well as new opportunities. Packaging continues to bring good news to ink manufacturers.
“Looking at the overall performance so far, 2019 has been a relatively good year for Siegwerk, showing good growth rates – although below prior-year levels – especially in our core business areas Flexible Packaging and Narrow Web,” Siegwerk CEO Herbert Forker said. “Overall, we see slightly lower growth rates within the industry this year due to the general economic environment, current macro-economic trends and rising costs.
“The increasing demand for sustainable solutions aligned with the requirements of a Circular Economy will be one of the key drivers in the ink and printing industries going forward,” he added. “Siegwerk is already well-positioned to support customers with the Circular Economy and other approaches for more sustainability. Furthermore, the UV inkjet business that we have taken over from Agfa in 2018 has seen excellent growth rates of 50% in 2019, further strengthening our footprint in digital printing. Today, we offer a unique variety of high-quality UV inkjet solutions for all application areas in label and packaging printing, including standard and sensitive applications.”
Felipe Mellado, chief marketing officer, Sun Chemical, said 2019 was a good year for Sun Chemical in all markets.
“We continue to make significant inroads across all markets and industries in order to enable our customers to grow their businesses by delivering reliable, consistent products and services, and developing innovative and sustainable products and solutions,” said Mellado. “Our acquisitions this past year are meant to further strengthen our offerings for customers and meet their sustainability objectives. We’re excited about recently entering into an agreement to acquire BASF Colors & Effects and our upcoming expanded portfolio as a global manufacturer of pigments.”
Geoff Peters, president and CEO of Wikoff Color, said that 2019 was a year of growth through acquisition and an expanded product offering for Wikoff Color.
“Following our acquisition of Braden Sutphin Ink Company in late 2018, we focused on integrating several new manufacturing sites to our technical service and support model,” added Peters. “Wikoff Color also partnered with industry leaders in a variety of disciplines to bring a wide breadth of innovative products to customers, providing a one-stop source for pressroom solutions.”
“At INX and Sakata INX, we are experiencing growth in most of our markets and are working on many projects that will continue to provide growth going forward,” said John Hrdlick, president and CEO of INX International Ink Co. “That said, challenging conditions remain in our industry related to raw material supply and costs, the impact of tariffs, and the increasingly competitive nature of our business. The photoinitiator (PI) situation appears to have stabilized this year; however, the pricing of PI has settled in much higher than before the crisis began, which is not a surprise. I suspect the tariff situation will not improve for some time, especially with the upcoming election year. Passing these costs through is difficult and we continue to absorb much of the impact. 2019 will show growth over last year and some overall improvement due to the hard work of our people to mitigate increased costs as best as we can.”
“Although there has been a slight slowdown of growth in the package printing markets throughout 2019, Flint Group Packaging Inks still sees numerous opportunities for business development,” said Doug Aldred, Flint Group president packaging inks.
Shintaro Yamaoka, president of Toyo Ink Co., Ltd., said that during the first half of 2019, the global economy showed rapidly growing signs of a slowdown associated with trade friction between the US and China and the increasing political risk, although growth continued in the US and China.
“In Japan, business confidence was also deteriorating, although a moderate recovery trend continued,” Yamaoka added. “The year started strong for our Packaging Materials Business. Gravure ink sales for the packaging of food and drinks, mainly for private brands and convenience stores, remained firm through to the first half. Demand has remained strong for biomass packaging inks, which are produced using renewable and unused resources from plants as an alternative to oil. Overseas, in the first half of 2019, sales of eco-friendly type products expanded in Southeast Asia and India, while sales did not grow much in China. Following a sharp rise in raw material prices from the previous fiscal year in Japan and overseas, we systematically promoted cost reductions and shifted some of the higher costs onto sales prices.
“In the first half of 2019, the Printing and Information Business sought to optimize its business scale by product and reduce costs in Japan, while bolstering sales overseas by expanding its global bases, which resulted in the advancement of sales expansion in India and South America,” Yamaoka noted. “In addition, the Group promoted sales expansion in the growing African market by establishing a sales company in Morocco. However, domestic demand for offset inks for the commercial printing of circulars and other materials, as well as existing information publications including newspapers and magazines, declined more than expected.”
Heiner Klokkers, chairman of hubergroup’s board, noted that the printing ink market is globally affected by the downturn of commercial print and newspaper print. “This trend is also affecting hubergroup. We are therefore undertaking a number of restructuring measures to adapt to the market environment. This, of course, poses challenges for us but we have them under control and are already seeing first successes,” Klokkers added.
Highlights from 2019
There were several highlights for the ink industry, though 2019 was a relatively quiet time. In terms of mergers and acquisitions, there were a few sizable moves. In the ink and printing equipment industry, the most notable was the July 2019 announcement that Siris Capital Group acquired EFI for $1.7 billion.
With its VUTEk, EFI Wide Format, Quantum, Reggiani and Cretaprint presses, EFI is a market leader in the superwide-, wide-format, textile and ceramic printing markets. The company also produces its own inks, including UV, UV LED and water-based inks; Ink World estimates EFI’s ink sales at $150 million, placing it as the eighth-largest North American ink manufacturer in Ink World’s North American Top 20.
On the supplier side, DIC Corporation, the parent company of Sun Chemical, made huge news when it announced a definitive agreement in August 2019 to acquire BASF Colors & Effects (BCE) for €1.15 billion. Mellado pointed to this acquisition as a key highlight over the past year for Sun Chemical.
“When it takes effect, it will significantly broaden our portfolio as a global manufacturer of pigments, including those for electronic displays, cosmetics, coatings, plastics, inks and specialty applications,”
Mellado said. “With more than 30 pigment production facilities world-wide between DIC and BCE, the company’s pigment portfolio will be able to offer broader product categories related to effect pigments, inorganic pigments, organic pigments, specialty dyes, and pigment preparations.”
Hrdlick noted that INX International Ink Co. completed the $7 million expansion of its R&D facility in West Chicago, IL as a highlight.
“The expansion doubled the size of R&D and allowed us to bring our digital R&D group in from the West Coast, which includes a large print lab that will support our digital ink development, training, and other projects planned for the future,” Hrdlick added. “The existing R&D space was also updated and certain areas were enlarged to better support our R&D employees and customer visits.”
Integrating Wikoff Color and Braden Sutphin Ink Company was a success this past year, per Peters.
“My highlight would be the way that all the disciplines across Wikoff Color (IT, finance, HR, manufacturing, sales, marketing, R&D, technical service and quality) worked with their counterparts at Braden Sutphin to make the integration of the two companies as invisible to our customers and as stress-free to our employees as possible,” Peters said.
Aldred noted that Flint Group launched VIVO Color Solutions, a web-based system that is an ink color formulation search engine and support service.
“Packaging converters are looking for a supplier who invests in tools and processes to enhance the user experience,” Aldred said. “One such example revolves around color management challenges. Flint Group Paper & Board and Narrow Web recently launched VIVO Colour Solutions. VIVO Colour Solutions is an industry-leading and robust color communication and service platform.”
Flint Group Packaging also opened its new 12,000 square foot manufacturing and lab facility in Westmead, Kwazulu Natal, South Africa. The facility is producing solvent-based inks and will be starting up production of water-based inks.
Toyo Ink Group moved forward with global expansion plans in Africa and Myanmar in 2019.
“In April, the parent company Toyo Ink SC Holdings announced the establishment of our first office in Africa, eyeing the future economic progress of the continent,” said Yamaoka. “The new sales subsidiary, Toyo Ink North Africa, has already started sales of inks and chemical products for packaging and marketing activities in the region, as the Toyo Ink Group looks to solidify our position as a global single-source provider of integrated printing and packaging solutions.
“Construction of our new Myanmar factory has also been progressing at a steady pace,” Yamaoka added. “The completion of a new production site in the Thilawa Special Economic Zone in Yangon is slated for this November. At that time, Toyo Ink Myanmar Co. will start the manufacturing and marketing of liquid and offset inks as well as adhesives for the packaging sector.”
Forker observed that Siegwerk has further worked on the expansion of its global presence as well as the enhancement of its product and service portfolio especially for the packaging printing market in 2019.
“We have completed the integration of the Canadian Ultra Inks Inc that has been acquired in 2018, adding well-established, high-quality, water-based flexo inks for narrow web and paper and board applications to our existing portfolio,” he noted.
“Next to complementary acquisitions to strengthen our footprint in selected local markets, we have also started additional construction projects driving further organic growth,” Forker added. “With the start of the construction of new state-of-the-art blending centers in Vietnam and Bangladesh, we want to strengthen our local infrastructure while getting closer to our customers in the local markets and support them more effectively with individually formulated ink solutions which match their local printing requirements.”
Siegwerk also completed its integration of Agfa Graphics UV inkjet products, strengthening its position in this growth area.
“By finally integrating Agfa Graphics’ UV inkjet business for packaging and label printing that we acquired in 2018, we have specifically strengthened our existing UV inkjet portfolio in 2019,” Forker said.
“Today, we offer a unique variety of high-quality UV inkjet solutions for all application areas in label and packaging printing including standard and sensitive applications: From standard CMYK inks for labels, through specialty inks for coding applications or custom-made spot colors to migration-optimized inks for sensitive food and pharma packaging. Besides, we offer customized water-based inkjet ink solutions for tissue printing as well as digital printing on flexible packaging.”
In another move, Siegwerk opened the new Siegwerk Ink Lab at Clemson University’s Sonoco Institute of Packaging Design and Graphics in September 2019.
Forker also noted that Siegwerk made advances in environmentally friendly inks and coatings.
“Assessing ways of enhancing the ecological footprint of our inks, with no loss of performance, is one of our key R&D efforts,” he said. “Sustainability means progress for us at Siegwerk. That’s why we drive our global engagement for a sustainable future through a wide range of different activities and commitments. We have a wealth of experience with inks for paper and board applications and the corresponding need for ultimate deinkability of inks to support paper recycling. Based on fundamental investigations into the deinkability of UV/LED cured prints together with INGEDE member Stora Enso, a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper, we have just recently launched a new UV/LED offset ink system with impressive deinking properties on various paper grades even comparable to the deinkability of conventional oil-based sheetfed offset inks.”
Klokkers pointed to hubergroup’s NewV curing system. “In April 2019, we announced that we had developed a reliable and science-based solution for determining the curing degree of UV inks – NewV cure. While current curing tests are rather subjectively, the new hubergroup method is objective and considers the hardening of the total ink and varnish film thickness in offset printing,” said Klokkers. “NewV cure will increase security in packaging production and reduce waste as well as rejects due to incomplete curing. In Europe, it is expectedly available during the first quarter of 2020.”
Biggest Challenges
However, all is not perfect for the ink industry. There are plenty of challenges that are out there, from raw materials and regulatory concerns to consolidation and the evolving world of printing. Higher costs, regulatory pressures and sometimes limited availability of raw materials continue to be major issues for ink manufacturers. Communicating with customers is one way to maintain trust.
“Flint Group Procurement monitors all major raw material markets in great detail,” said Aldred. “To best manage costs and ensure the security of supply, Flint Group takes a conservative position; the majority of our raw material purchases are made under contracts. We do not take risks by betting on higher or lower raw material costs; it is not in the interest of our customers to risk their costs or availability of raw materials and, therefore, end products.”
“Raw material sourcing issues have been making headlines for several months now, from news articles related to tariffs and factory explosions, to ink suppliers announcing price increases,” said Ken Klug, director of purchasing for Wikoff Color. “Our customers certainly recognize the challenges posed by the current raw material market conditions, but we still do our best to communicate any issues that would be specific to their supply chain.”
“Our organization is committed to communicating openly and honestly with our customers,” said Mellado. “It is key to cultivating and maintaining trust. Although we sometimes have to communicate price increases, we ensure that our customers understand the situations of the global raw material markets and changing regulatory standards.”
“We have focused repeatedly on detailed communications with our customers during the difficulties all of us are working through,” Hrdlick said. “I think they all understand the situation as it has been very visible and in the news. However, many of them are dealing with the same competitive pressures we face and it is difficult or impossible for some of them to pass increases through to their customers.”
“We regularly discuss the opportunities to best tackle these challenges,” said Forker. “At Siegwerk, it is always our objective to minimize the impact for our customers due to potential supply shortages by having sufficient alternative suppliers and materials for the manufacture of our products and solutions. Our forecast for next year is that raw materials costs will remain near the level of quarter three 2019.”
“Regulatory pressures and the availability of raw materials are major challenges in 2019,” Klokkers said. “Customers do not always understand how much effort it takes to react to the changing market conditions and reformulate products. However, the market would be undersupplied if we didn’t take these efforts. Hence, we need to create more awareness for this issue so that understanding among customers increases.”
Mellado observed that the printing and ink industries are currently challenged by increased prices and compressed margins at the converting and ink level, resulting from overall consolidation in the market.
“As prices increase, there is a stronger emphasis on the differentiation of products,” Mellado said. “However, difficulties in product differentiation increase as consolidation increases, as there are fewer raw materials to choose from. Due to the increases in tariff initiatives between China and the US, the chemical industry and the raw materials that support printing inks are being significantly affected. The entire value chain has felt the effects of the initial direct tariff impact.”
Hrdlick also pointed to consolidation and environmental concerns as major issues.
“Consolidations continue to change the landscape of our customers and competition, both of which lead to increased competitive challenges globally,” Hrdlick said. “As I travel more, it’s very clear that many countries, if not all, have challenges related to their individual political issues that impact our businesses. Various regions of the world have different chemical regulations that create difficulties for product formulations and the ability to export or import those products. And, the public outcry for sustainability has reached the brand owners, so it’s more important than ever for us to develop our products in all categories to be environmentally friendly. How well each of us adapts to our changing industries will be critical in the next few years.”
Greg Burch, VP of regional operations & corporate accounts at Wikoff Color, said regulatory concerns driven by consumer demands and raw material sourcing issues are the biggest challenges the industry is facing.
“Both of these challenges are particularly prevalent for energy-cure products used in the packaging market,” Burch added.
Aldred said that Flint Group sees see two main challenges that are interconnected - sustainability and changes in packaging design and materials.
“Brand owners, who are driven by consumers, regulatory bodies, and special interest groups, are looking for package printers to deliver solutions to address sustainability concerns,” Aldred added. “Ink suppliers have to be prepared with products and solutions to address new and future packaging requirements targeted toward food waste reduction, recyclability, and compostability.”
“As sustainability is becoming more and more important, one of the major challenges for the coming years will be the recyclability of print products, in particular within the packaging industry,” Klokkers observed. “Additionally, the limited availability of raw materials and the downturn of commercial as well as newspaper print are trends that will continue to impact the market.
Yamaoka noted that digitalization continues to put pressure on the printing and ink industries.
“Growth in the industry is expected to come from high-mix, small-lot and variable data print runs,” said Yamaoka. “Digital printing is expected to make deeper inroads as more printers look to diversify or integrate digital capability into their operations. Regulatory pressure toward safer, more environmentally friendly chemistry is an ongoing consideration for the printing industry.”
Forker said that there are various challenges the industry will be facing in the coming years, with the biggest one being how to increase the recyclability rate of packaging of all kinds.
“Fitting within the Circular Economy and other reuse and recycling approaches will be key drivers for future packaging,” Forker observed. “The whole industry will face a rethinking and redesign of packaging structures, and paper will also play a role again in flexible packaging applications. Additionally, the cost of quality raw materials has continued to remain elevated. The whole industry is still suffering from the critical supply situation and the corresponding price hikes of various raw materials. Due to stricter environmental regulations put in place by Chinese authorities and unexpected plant closures, prices for pigments and photoinitiators, as well as other additives, have increased significantly during the year. So, it’s not only about inks anymore, it’s about integrated solutions as part of an overall framework of the whole packaging supply chain. Circularity, new digital business models as well as the use of big data and artificial intelligence will further gain in importance shaping the future of packaging.”
Biggest Opportunities
Overcoming these challenges will open doors to new opportunities.
“In addressing printing industry challenges, Wikoff Color is creating opportunities by finding alternatives in energy-cure technologies,” said Daryl Collins, VP of regional operations & marketing. “Another opportunity that Wikoff is poised to benefit from is the growth of digital printing applications.”
“With our global reach and understanding of product integration, Sun Chemical is very well positioned to meet the challenges of today’s raw material markets,” Mellado explained. “We continue to feel confident in our procurement, supply chain, manufacturing, and technology teams, which we position to effectively research and secure sourcing opportunities.”
“Our company has a history of developing environmentally friendly products,” Hrdlick said. “In the past year or so, those efforts have increased so I think we are in a good position and will be able to highlight our products at drupa in 2020. As all of us at Sakata INX continue to work more in unison, I believe that will strengthen our ability to adapt going forward as we develop more and more synergies.”
“With an emphasis on sustainability, brand owners and consumers are increasingly concerned about the impact of packaging on the environment and look for packaging to be more sustainable,” said Aldred. “Packaging converters, along with the entire packaging value chain, must respond with environmentally friendly products. Our global team of development experts continues to build product platforms and solutions which are focused on sustainability to assist converters and brands in making packaging more environmentally compliant.”
“The Toyo Ink Group is stepping up our investment in digital technology development efforts and actively working to help our customers make the transformation to a digitized future,” said Yamaoka. “For the growing packaging market in the US and Europe, we are boosting our lineup of UV inkjet inks for labels, the biggest share of the market. In addition, we offer highly durable water-based inkjet inks, a core area of competence for the Toyo Ink Group, for applications like cardboard, paper packages, labels and flexible packaging materials. And for the signage markets mainly in emerging countries, we are increasing our lineup of solvent-based and UV inkjet inks, as we look to expand our position in these markets.”
“The current movement towards a more ecological and circular economy shows that the packaging industry needs to increase its focus on sustainability issues,” Klokkers said. “hubergroup has become a trendsetter for environmental developments in the printing ink industry with innovations such as low migration and cobalt-free inks. Since then, we have continued to work on increasing the sustainability of our products as our newly launched ink series Eco-Perfect-Dry shows. Additionally, we are closely cooperating with institutions such as Cradle to Cradle to drive a circular economy.”
“Opportunities for future growth also lie in eco-friendly businesses,” Yamaoka added. “We have been focusing on the development of environmentally friendly products such as toluene-free, MEK-free and water-based inks for gravure and flexo print packaging. In addition to offset, gravure and flexo inks, we have successfully expanded our biomass portfolio to include adhesives for laminating and hot-melt applications. Sales of biomass inks to the Japan market and of eco-friendly packaging materials in Southeast Asia and India are also on a growth trajectory.”
“The Circular Economy is not only a challenge, but it is also a significant opportunity for the whole industry,” Forker concluded. “Sustainable business models and products in line with the needs of the Circular Economy will be key success factors going forward. Assessing ways of enhancing the ecological footprint of our inks, with no loss of performance, is one of our key R&D efforts. Sustainability means progress for us at Siegwerk; that’s why we drive our global engagement for a sustainable future by a wide range of different activities and commitments considering both approaches design for less as well as design for recycling. We already work closely with our customers to redesign packaging using mono-materials instead of multi-materials as the difficult separation of these combined materials significantly hampers the recyclability. Here inks play an important role in the design as well as in the development of more sustainable packaging solutions.”
“Looking at the overall performance so far, 2019 has been a relatively good year for Siegwerk, showing good growth rates – although below prior-year levels – especially in our core business areas Flexible Packaging and Narrow Web,” Siegwerk CEO Herbert Forker said. “Overall, we see slightly lower growth rates within the industry this year due to the general economic environment, current macro-economic trends and rising costs.
“The increasing demand for sustainable solutions aligned with the requirements of a Circular Economy will be one of the key drivers in the ink and printing industries going forward,” he added. “Siegwerk is already well-positioned to support customers with the Circular Economy and other approaches for more sustainability. Furthermore, the UV inkjet business that we have taken over from Agfa in 2018 has seen excellent growth rates of 50% in 2019, further strengthening our footprint in digital printing. Today, we offer a unique variety of high-quality UV inkjet solutions for all application areas in label and packaging printing, including standard and sensitive applications.”
Felipe Mellado, chief marketing officer, Sun Chemical, said 2019 was a good year for Sun Chemical in all markets.
“We continue to make significant inroads across all markets and industries in order to enable our customers to grow their businesses by delivering reliable, consistent products and services, and developing innovative and sustainable products and solutions,” said Mellado. “Our acquisitions this past year are meant to further strengthen our offerings for customers and meet their sustainability objectives. We’re excited about recently entering into an agreement to acquire BASF Colors & Effects and our upcoming expanded portfolio as a global manufacturer of pigments.”
Geoff Peters, president and CEO of Wikoff Color, said that 2019 was a year of growth through acquisition and an expanded product offering for Wikoff Color.
“Following our acquisition of Braden Sutphin Ink Company in late 2018, we focused on integrating several new manufacturing sites to our technical service and support model,” added Peters. “Wikoff Color also partnered with industry leaders in a variety of disciplines to bring a wide breadth of innovative products to customers, providing a one-stop source for pressroom solutions.”
“At INX and Sakata INX, we are experiencing growth in most of our markets and are working on many projects that will continue to provide growth going forward,” said John Hrdlick, president and CEO of INX International Ink Co. “That said, challenging conditions remain in our industry related to raw material supply and costs, the impact of tariffs, and the increasingly competitive nature of our business. The photoinitiator (PI) situation appears to have stabilized this year; however, the pricing of PI has settled in much higher than before the crisis began, which is not a surprise. I suspect the tariff situation will not improve for some time, especially with the upcoming election year. Passing these costs through is difficult and we continue to absorb much of the impact. 2019 will show growth over last year and some overall improvement due to the hard work of our people to mitigate increased costs as best as we can.”
“Although there has been a slight slowdown of growth in the package printing markets throughout 2019, Flint Group Packaging Inks still sees numerous opportunities for business development,” said Doug Aldred, Flint Group president packaging inks.
Shintaro Yamaoka, president of Toyo Ink Co., Ltd., said that during the first half of 2019, the global economy showed rapidly growing signs of a slowdown associated with trade friction between the US and China and the increasing political risk, although growth continued in the US and China.
“In Japan, business confidence was also deteriorating, although a moderate recovery trend continued,” Yamaoka added. “The year started strong for our Packaging Materials Business. Gravure ink sales for the packaging of food and drinks, mainly for private brands and convenience stores, remained firm through to the first half. Demand has remained strong for biomass packaging inks, which are produced using renewable and unused resources from plants as an alternative to oil. Overseas, in the first half of 2019, sales of eco-friendly type products expanded in Southeast Asia and India, while sales did not grow much in China. Following a sharp rise in raw material prices from the previous fiscal year in Japan and overseas, we systematically promoted cost reductions and shifted some of the higher costs onto sales prices.
“In the first half of 2019, the Printing and Information Business sought to optimize its business scale by product and reduce costs in Japan, while bolstering sales overseas by expanding its global bases, which resulted in the advancement of sales expansion in India and South America,” Yamaoka noted. “In addition, the Group promoted sales expansion in the growing African market by establishing a sales company in Morocco. However, domestic demand for offset inks for the commercial printing of circulars and other materials, as well as existing information publications including newspapers and magazines, declined more than expected.”
Heiner Klokkers, chairman of hubergroup’s board, noted that the printing ink market is globally affected by the downturn of commercial print and newspaper print. “This trend is also affecting hubergroup. We are therefore undertaking a number of restructuring measures to adapt to the market environment. This, of course, poses challenges for us but we have them under control and are already seeing first successes,” Klokkers added.
Highlights from 2019
There were several highlights for the ink industry, though 2019 was a relatively quiet time. In terms of mergers and acquisitions, there were a few sizable moves. In the ink and printing equipment industry, the most notable was the July 2019 announcement that Siris Capital Group acquired EFI for $1.7 billion.
With its VUTEk, EFI Wide Format, Quantum, Reggiani and Cretaprint presses, EFI is a market leader in the superwide-, wide-format, textile and ceramic printing markets. The company also produces its own inks, including UV, UV LED and water-based inks; Ink World estimates EFI’s ink sales at $150 million, placing it as the eighth-largest North American ink manufacturer in Ink World’s North American Top 20.
On the supplier side, DIC Corporation, the parent company of Sun Chemical, made huge news when it announced a definitive agreement in August 2019 to acquire BASF Colors & Effects (BCE) for €1.15 billion. Mellado pointed to this acquisition as a key highlight over the past year for Sun Chemical.
“When it takes effect, it will significantly broaden our portfolio as a global manufacturer of pigments, including those for electronic displays, cosmetics, coatings, plastics, inks and specialty applications,”
Mellado said. “With more than 30 pigment production facilities world-wide between DIC and BCE, the company’s pigment portfolio will be able to offer broader product categories related to effect pigments, inorganic pigments, organic pigments, specialty dyes, and pigment preparations.”
Hrdlick noted that INX International Ink Co. completed the $7 million expansion of its R&D facility in West Chicago, IL as a highlight.
“The expansion doubled the size of R&D and allowed us to bring our digital R&D group in from the West Coast, which includes a large print lab that will support our digital ink development, training, and other projects planned for the future,” Hrdlick added. “The existing R&D space was also updated and certain areas were enlarged to better support our R&D employees and customer visits.”
Integrating Wikoff Color and Braden Sutphin Ink Company was a success this past year, per Peters.
“My highlight would be the way that all the disciplines across Wikoff Color (IT, finance, HR, manufacturing, sales, marketing, R&D, technical service and quality) worked with their counterparts at Braden Sutphin to make the integration of the two companies as invisible to our customers and as stress-free to our employees as possible,” Peters said.
Aldred noted that Flint Group launched VIVO Color Solutions, a web-based system that is an ink color formulation search engine and support service.
“Packaging converters are looking for a supplier who invests in tools and processes to enhance the user experience,” Aldred said. “One such example revolves around color management challenges. Flint Group Paper & Board and Narrow Web recently launched VIVO Colour Solutions. VIVO Colour Solutions is an industry-leading and robust color communication and service platform.”
Flint Group Packaging also opened its new 12,000 square foot manufacturing and lab facility in Westmead, Kwazulu Natal, South Africa. The facility is producing solvent-based inks and will be starting up production of water-based inks.
Toyo Ink Group moved forward with global expansion plans in Africa and Myanmar in 2019.
“In April, the parent company Toyo Ink SC Holdings announced the establishment of our first office in Africa, eyeing the future economic progress of the continent,” said Yamaoka. “The new sales subsidiary, Toyo Ink North Africa, has already started sales of inks and chemical products for packaging and marketing activities in the region, as the Toyo Ink Group looks to solidify our position as a global single-source provider of integrated printing and packaging solutions.
“Construction of our new Myanmar factory has also been progressing at a steady pace,” Yamaoka added. “The completion of a new production site in the Thilawa Special Economic Zone in Yangon is slated for this November. At that time, Toyo Ink Myanmar Co. will start the manufacturing and marketing of liquid and offset inks as well as adhesives for the packaging sector.”
Forker observed that Siegwerk has further worked on the expansion of its global presence as well as the enhancement of its product and service portfolio especially for the packaging printing market in 2019.
“We have completed the integration of the Canadian Ultra Inks Inc that has been acquired in 2018, adding well-established, high-quality, water-based flexo inks for narrow web and paper and board applications to our existing portfolio,” he noted.
“Next to complementary acquisitions to strengthen our footprint in selected local markets, we have also started additional construction projects driving further organic growth,” Forker added. “With the start of the construction of new state-of-the-art blending centers in Vietnam and Bangladesh, we want to strengthen our local infrastructure while getting closer to our customers in the local markets and support them more effectively with individually formulated ink solutions which match their local printing requirements.”
Siegwerk also completed its integration of Agfa Graphics UV inkjet products, strengthening its position in this growth area.
“By finally integrating Agfa Graphics’ UV inkjet business for packaging and label printing that we acquired in 2018, we have specifically strengthened our existing UV inkjet portfolio in 2019,” Forker said.
“Today, we offer a unique variety of high-quality UV inkjet solutions for all application areas in label and packaging printing including standard and sensitive applications: From standard CMYK inks for labels, through specialty inks for coding applications or custom-made spot colors to migration-optimized inks for sensitive food and pharma packaging. Besides, we offer customized water-based inkjet ink solutions for tissue printing as well as digital printing on flexible packaging.”
In another move, Siegwerk opened the new Siegwerk Ink Lab at Clemson University’s Sonoco Institute of Packaging Design and Graphics in September 2019.
Forker also noted that Siegwerk made advances in environmentally friendly inks and coatings.
“Assessing ways of enhancing the ecological footprint of our inks, with no loss of performance, is one of our key R&D efforts,” he said. “Sustainability means progress for us at Siegwerk. That’s why we drive our global engagement for a sustainable future through a wide range of different activities and commitments. We have a wealth of experience with inks for paper and board applications and the corresponding need for ultimate deinkability of inks to support paper recycling. Based on fundamental investigations into the deinkability of UV/LED cured prints together with INGEDE member Stora Enso, a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper, we have just recently launched a new UV/LED offset ink system with impressive deinking properties on various paper grades even comparable to the deinkability of conventional oil-based sheetfed offset inks.”
Klokkers pointed to hubergroup’s NewV curing system. “In April 2019, we announced that we had developed a reliable and science-based solution for determining the curing degree of UV inks – NewV cure. While current curing tests are rather subjectively, the new hubergroup method is objective and considers the hardening of the total ink and varnish film thickness in offset printing,” said Klokkers. “NewV cure will increase security in packaging production and reduce waste as well as rejects due to incomplete curing. In Europe, it is expectedly available during the first quarter of 2020.”
Biggest Challenges
However, all is not perfect for the ink industry. There are plenty of challenges that are out there, from raw materials and regulatory concerns to consolidation and the evolving world of printing. Higher costs, regulatory pressures and sometimes limited availability of raw materials continue to be major issues for ink manufacturers. Communicating with customers is one way to maintain trust.
“Flint Group Procurement monitors all major raw material markets in great detail,” said Aldred. “To best manage costs and ensure the security of supply, Flint Group takes a conservative position; the majority of our raw material purchases are made under contracts. We do not take risks by betting on higher or lower raw material costs; it is not in the interest of our customers to risk their costs or availability of raw materials and, therefore, end products.”
“Raw material sourcing issues have been making headlines for several months now, from news articles related to tariffs and factory explosions, to ink suppliers announcing price increases,” said Ken Klug, director of purchasing for Wikoff Color. “Our customers certainly recognize the challenges posed by the current raw material market conditions, but we still do our best to communicate any issues that would be specific to their supply chain.”
“Our organization is committed to communicating openly and honestly with our customers,” said Mellado. “It is key to cultivating and maintaining trust. Although we sometimes have to communicate price increases, we ensure that our customers understand the situations of the global raw material markets and changing regulatory standards.”
“We have focused repeatedly on detailed communications with our customers during the difficulties all of us are working through,” Hrdlick said. “I think they all understand the situation as it has been very visible and in the news. However, many of them are dealing with the same competitive pressures we face and it is difficult or impossible for some of them to pass increases through to their customers.”
“We regularly discuss the opportunities to best tackle these challenges,” said Forker. “At Siegwerk, it is always our objective to minimize the impact for our customers due to potential supply shortages by having sufficient alternative suppliers and materials for the manufacture of our products and solutions. Our forecast for next year is that raw materials costs will remain near the level of quarter three 2019.”
“Regulatory pressures and the availability of raw materials are major challenges in 2019,” Klokkers said. “Customers do not always understand how much effort it takes to react to the changing market conditions and reformulate products. However, the market would be undersupplied if we didn’t take these efforts. Hence, we need to create more awareness for this issue so that understanding among customers increases.”
Mellado observed that the printing and ink industries are currently challenged by increased prices and compressed margins at the converting and ink level, resulting from overall consolidation in the market.
“As prices increase, there is a stronger emphasis on the differentiation of products,” Mellado said. “However, difficulties in product differentiation increase as consolidation increases, as there are fewer raw materials to choose from. Due to the increases in tariff initiatives between China and the US, the chemical industry and the raw materials that support printing inks are being significantly affected. The entire value chain has felt the effects of the initial direct tariff impact.”
Hrdlick also pointed to consolidation and environmental concerns as major issues.
“Consolidations continue to change the landscape of our customers and competition, both of which lead to increased competitive challenges globally,” Hrdlick said. “As I travel more, it’s very clear that many countries, if not all, have challenges related to their individual political issues that impact our businesses. Various regions of the world have different chemical regulations that create difficulties for product formulations and the ability to export or import those products. And, the public outcry for sustainability has reached the brand owners, so it’s more important than ever for us to develop our products in all categories to be environmentally friendly. How well each of us adapts to our changing industries will be critical in the next few years.”
Greg Burch, VP of regional operations & corporate accounts at Wikoff Color, said regulatory concerns driven by consumer demands and raw material sourcing issues are the biggest challenges the industry is facing.
“Both of these challenges are particularly prevalent for energy-cure products used in the packaging market,” Burch added.
Aldred said that Flint Group sees see two main challenges that are interconnected - sustainability and changes in packaging design and materials.
“Brand owners, who are driven by consumers, regulatory bodies, and special interest groups, are looking for package printers to deliver solutions to address sustainability concerns,” Aldred added. “Ink suppliers have to be prepared with products and solutions to address new and future packaging requirements targeted toward food waste reduction, recyclability, and compostability.”
“As sustainability is becoming more and more important, one of the major challenges for the coming years will be the recyclability of print products, in particular within the packaging industry,” Klokkers observed. “Additionally, the limited availability of raw materials and the downturn of commercial as well as newspaper print are trends that will continue to impact the market.
Yamaoka noted that digitalization continues to put pressure on the printing and ink industries.
“Growth in the industry is expected to come from high-mix, small-lot and variable data print runs,” said Yamaoka. “Digital printing is expected to make deeper inroads as more printers look to diversify or integrate digital capability into their operations. Regulatory pressure toward safer, more environmentally friendly chemistry is an ongoing consideration for the printing industry.”
Forker said that there are various challenges the industry will be facing in the coming years, with the biggest one being how to increase the recyclability rate of packaging of all kinds.
“Fitting within the Circular Economy and other reuse and recycling approaches will be key drivers for future packaging,” Forker observed. “The whole industry will face a rethinking and redesign of packaging structures, and paper will also play a role again in flexible packaging applications. Additionally, the cost of quality raw materials has continued to remain elevated. The whole industry is still suffering from the critical supply situation and the corresponding price hikes of various raw materials. Due to stricter environmental regulations put in place by Chinese authorities and unexpected plant closures, prices for pigments and photoinitiators, as well as other additives, have increased significantly during the year. So, it’s not only about inks anymore, it’s about integrated solutions as part of an overall framework of the whole packaging supply chain. Circularity, new digital business models as well as the use of big data and artificial intelligence will further gain in importance shaping the future of packaging.”
Biggest Opportunities
Overcoming these challenges will open doors to new opportunities.
“In addressing printing industry challenges, Wikoff Color is creating opportunities by finding alternatives in energy-cure technologies,” said Daryl Collins, VP of regional operations & marketing. “Another opportunity that Wikoff is poised to benefit from is the growth of digital printing applications.”
“With our global reach and understanding of product integration, Sun Chemical is very well positioned to meet the challenges of today’s raw material markets,” Mellado explained. “We continue to feel confident in our procurement, supply chain, manufacturing, and technology teams, which we position to effectively research and secure sourcing opportunities.”
“Our company has a history of developing environmentally friendly products,” Hrdlick said. “In the past year or so, those efforts have increased so I think we are in a good position and will be able to highlight our products at drupa in 2020. As all of us at Sakata INX continue to work more in unison, I believe that will strengthen our ability to adapt going forward as we develop more and more synergies.”
“With an emphasis on sustainability, brand owners and consumers are increasingly concerned about the impact of packaging on the environment and look for packaging to be more sustainable,” said Aldred. “Packaging converters, along with the entire packaging value chain, must respond with environmentally friendly products. Our global team of development experts continues to build product platforms and solutions which are focused on sustainability to assist converters and brands in making packaging more environmentally compliant.”
“The Toyo Ink Group is stepping up our investment in digital technology development efforts and actively working to help our customers make the transformation to a digitized future,” said Yamaoka. “For the growing packaging market in the US and Europe, we are boosting our lineup of UV inkjet inks for labels, the biggest share of the market. In addition, we offer highly durable water-based inkjet inks, a core area of competence for the Toyo Ink Group, for applications like cardboard, paper packages, labels and flexible packaging materials. And for the signage markets mainly in emerging countries, we are increasing our lineup of solvent-based and UV inkjet inks, as we look to expand our position in these markets.”
“The current movement towards a more ecological and circular economy shows that the packaging industry needs to increase its focus on sustainability issues,” Klokkers said. “hubergroup has become a trendsetter for environmental developments in the printing ink industry with innovations such as low migration and cobalt-free inks. Since then, we have continued to work on increasing the sustainability of our products as our newly launched ink series Eco-Perfect-Dry shows. Additionally, we are closely cooperating with institutions such as Cradle to Cradle to drive a circular economy.”
“Opportunities for future growth also lie in eco-friendly businesses,” Yamaoka added. “We have been focusing on the development of environmentally friendly products such as toluene-free, MEK-free and water-based inks for gravure and flexo print packaging. In addition to offset, gravure and flexo inks, we have successfully expanded our biomass portfolio to include adhesives for laminating and hot-melt applications. Sales of biomass inks to the Japan market and of eco-friendly packaging materials in Southeast Asia and India are also on a growth trajectory.”
“The Circular Economy is not only a challenge, but it is also a significant opportunity for the whole industry,” Forker concluded. “Sustainable business models and products in line with the needs of the Circular Economy will be key success factors going forward. Assessing ways of enhancing the ecological footprint of our inks, with no loss of performance, is one of our key R&D efforts. Sustainability means progress for us at Siegwerk; that’s why we drive our global engagement for a sustainable future by a wide range of different activities and commitments considering both approaches design for less as well as design for recycling. We already work closely with our customers to redesign packaging using mono-materials instead of multi-materials as the difficult separation of these combined materials significantly hampers the recyclability. Here inks play an important role in the design as well as in the development of more sustainable packaging solutions.”
