Packaging Ink Report (I)

Over the years, the packaging of the ink industry has outperformed publications. Driven by the development of flexible packaging and radiation curing, ink manufacturers continue to find market opportunities. The data collected by the National Association of Printing Ink Manufacturers of the United States (NAPIM) in the first half of 2005 showed the changes in the market. According to NAPIM's data, compared with the first half of 2004, the total volume of packaging inks fell by 1.4%, while sales increased by 1.5%, reflecting the decision of ink manufacturers to raise prices due to their higher raw material and operating costs.

According to Jim Coleman, executive director of NAPIM, there is a lot of good news in most packaging ink businesses. The total number of sheetfed inks decreased while sales increased. The increase in the price of gravure printing solvents is faster than the total amount. The largest profits were obtained in flexographic printing solvents, with total volume rising by 5.1% and sales increased by 6.6%. The only bad news was waterborne flexo printing inks, which suffered a 5% decline in total volume and sales fell 2.5% due to the challenges faced by the corrugated and folding cartons businesses.

Further price increases are imminent. Flint Ink Company announced that as of October 1, its packaging inks will increase by 6% to 10% depending on the type. An additional 4 cents per pound additional cost has also been appropriately invested to bear higher transportation costs. Sun Chemicals will raise the price by 9% to 12%, and will also invest additional costs in appropriate places.

In the recent Siegwerk Group's acquisition of the SICPA Packaging Ink Company, one can see a clear signal that the packaging ink market has great promise. Through this acquisition, Siegwerk Group became the second largest manufacturer of packaging inks with sales of 613 million euros.

Mr. Herbert Forker, Chairman and CEO of Siegwerk Group, said: "This acquisition is a key step for Siegwerk Group, a global merchant, to consolidate its global market and configuration. Now we can supply customers in any country in the world and provide them with application technology. Support. This also makes us an interested partner for major brand companies."

For all packaging ink manufacturers, there are plenty of opportunities to differentiate their products and services. Every day there seems to be a new packaging application, and these often require unique technologies.

For ink companies, developing new products and providing quality services are the key to continuous success in the packaging market.

2004 packaging market
As consumer goods companies pay attention to attract customers, the packaging market continues to prosper.

According to Richard Pettifor, president of North American Packaging & Printing Division of Sun Chemicals, the strong economy in the United States continues to promote growth in the packaging market, especially flexible plastics and rigid plastics.

Pettifor said: "Most of the growth is attributed to the brand owners' desire for increasingly sophisticated, attractive, and innovative packaging." He added that this increases their ability to compete in the retail industry. At the same time, processors demand efficiency, including optimizing printing speeds, to help them face excess production capacity in the industry.

Pettifor said that the global packaging industry is also growing, especially in those areas that are rapidly developing, supplying increasing domestic demand and increasing export packaging needs.

Mike Impastato, vice president of market development for Flint Ink's North American liquid packaging division, said: “Overall, the packaging market is doing well. Even if the entire North American printing market gradually stops growing, the packaging market has always been an area of ​​growth and technological innovation. However, the industry’s We have to bear in mind that even if packaging consumption is climbing, the threat faced by the domestic manufacturing industry is to be countered by everyone because external procurement is becoming more and more common."

It is worth mentioning that flexible packaging and radiation curing are two areas where growth is strong.

Impastato said: "Flexible packaging has always been a major growth area, bottle packaging and shrink sleeve market is the highest growth area. Radiation curing products also continue to gain momentum."

Pettifor said: "In terms of flexible packaging, bottle packaging, stand-up pouches, drug packaging, and heat-shrink sleeves have all shown the greatest growth, and in the FPA 2005 annual industry report, processors made drug packaging columns. As the number one growth area, the same report also shows that imports increased at a rate of 11% in the past four years, and another study pointed out that until 2008, the average annual growth rate of the North American rigid plastic food packaging market was 5.8%, which is also part of the label. It is advantageous because many of these packages use labels."

Gordon Mackenzie, vice president and business manager of SICPA North American Packaging Group, said that the biggest growth in the packaging industry has been in flexographic printing.

Mackenzie said: "Many new high-speed presses are being installed, and there has been a great improvement in graphics printing, although this will in turn increase costs and require more technology in the process."

Pettifor said that in terms of paper packaging, the market is expected to be stable, there will be a large number of mergers among processors, and the threat of imported paper packaging containers is also increasing. He added that the use of better graphic printing technologies and some digital printing technologies have added value to the paper packaging segment. Industry reports showed that the corrugated carton shipments in the United States fell by 3.6% in August. At the same time, according to the Paper Packaging Association, shipments of folding cartons rose by 2.1% in the first half of this year.

Impastato said: “The corrugated packaging market is flat, with growth at most in terms of GDP, but it will always exist in the packaging market. Driven by the continuous transfer of rigid packaging to flexible packaging and driven by some external procurement, the folding carton market is currently stable. Or in a down state. Folding carton has some major uses, but it will not be an area of ​​growth, unless some unexpected technological innovation can make the market active."

Color flexible packaging
For printers and ink companies, flexible packaging has become the most vital area. In recent years, gravure printing has significantly shifted to flexo printing due to lower costs, improved graphic printing technology, and the need for small batch production. However, digital printing may soon begin to gain market share.

Impastato said that the ever-improving graphics capabilities and a good cost structure have helped flexo printing gain market share from gravure printing. However, he added that the speed of this change has slowed down and will continue to slow because most of it has already been transferred.

Pettifor said that a recent study by the US printing market information service company (GAMIS) showed that nearly 80% of the flexible packaging market uses the flexographic printing process for printing. The same study also showed that due to the growth in the use of digital printing, both flexographic and gravure printing in flexible packaging may experience slight declines. Pettifor pointed out that although digital printing holds a small market share, it does have potential if the technology develops rapidly.

Pettifor said: "Gravure printing does provide excellent print quality and is competitive in mass production. However, flexo printing has been reducing the distance from gravure printing quality, and the cost is low for medium to medium print volumes. ."

Mackenzie said: “We have noticed that flexographic printing continues to gain market share from gravure printing, and flexographic printing is more competitive. For gravure printing, a more simplistic process is required, requiring less human input. To be effective, it must challenge those areas that are not cost-competitive. The most important aspect is coloring, in which ink costs are typically 30 to 40% higher than flexo printing. There is no reason why this has always been the case. It is the order of history."