SCUP Report

Table of Contents

Abstract

Printing inks are a customer- and applications-specific formulations business. There are two major segments—commercial printing/publishing and packaging. Printing inks are also categorized by process: lithography, rotogravure, flexography and digital printing, the newest and highest-growth process. A reputation for both quality products and technical service is essential for a printing inks company.

The world printing inks market is expected to grow only very slightly over the next five years. North America is the largest printing ink consumer. China is the fastest growing region, followed by Central and Eastern Europe/Russia, the Middle East and Africa, and the rest of Asia, while the largest markets—North America, Western Europe and Japan—are declining.

The following pie chart shows world consumption of printing inks on a value basis:

In North America, Western Europe and Japan, ink consumption peaked in 2000, and then took a steep decline in 2001, following the general economic recession. Ink consumption continued to decline in the United States in volume terms through 2008, as printing ink consumed in publishing fared poorly with the growing popularity of electronic media over print media. A continuing decline in 2009 appears to be occurring, certainly in the first half. This trend was evident, but the decline was less severe, in Europe and Japan. The outlook over the next five years is for consumption to decline in developed nations, while moderate growth will continue in portions of the developing world. Printing inks consumed in publishing will remain challenged by continuing growth in electronic media globally. Packaging will fare much better than publishing, with generally stable consumption or growth in most geographic markets, and some packaging printing also moving to China.

In the United States, as the business environment has changed, pricing power in the ink industry has been replaced with competitive pricing to maintain sales volumes, and a focus on cost reduction. A return to better profitability is possible with falling raw material costs in 2009, but higher levels of R&D spending are less likely, as the business becomes increasingly commodity-like. Technological advancements (e.g., radiation-cured inks including hybrids, waterless litho, increased used of combination printing such as litho plus inkjet, and new process color regimes) will increasingly separate innovative ink producers from commodity-oriented suppliers.

Pricing power has declined for printing ink producers in Europe over the last decade while raw material and energy costs rose beginning in 2003. The last three decades have witnessed a continued tightening of environmental legislation at both national and international levels concerning, in particular, solvent emissions, waste disposal and the labeling of hazardous materials. Regulatory pressures come from the Solvent Directive, which controls VOC emissions and may lead to a partial replacement of solventborne with water-based and radiation-curable inks. The Packaging Waste Directive will also leave its mark on the ink industry by requiring a reduction of the heavy metal content of inks and their compatibility with deinking and recycling processes.

Facing declining ink consumption in publishing, Japanese ink makers are adjusting their domestic outlook, while continuing with technological advances and the globalization of their business.

Printing ink production and consumption in China had the world's highest growth between 2000 and 2008 and is expected to continue to grow at the world's highest rate at an average of 6.0% per year over the next five years.