David Savastano, Ink World Editor04.22.10
The global recession has taken its toll on printers, but flexo packaging converters have fared reasonably well. For flexo ink manufacturers, the past year has been relatively stable.
“The European and North American flexo market had somewhat of a roller coaster year,” said Mike Impastato, vice president – strategic marketing, packaging and narrow web, for Flint Group. “January started very slowly with volume down across most segments. Printers had equipment shut down and were actively reducing inventories. But, once we got through the first quarter, the market began to come back to life and posted monthly increases through the second and third quarters before dropping off a bit in the historically slower fourth quarter.
“Most printers and suppliers felt much better about their businesses and the future exiting 2009 than they did entering 2009,” Mr. Impastato added. “The recovery was much faster than had been originally feared at the beginning of 2009. The Indian and Asian markets did not suffer nearly as much. Volume was off slightly, but only in comparison to the high levels of growth which these markets saw in 2006 through 2008.”
“Overall, the flexo market was flat in 2009,” said Tony Renzi, vice president of product management for liquid inks, North American Inks, Sun Chemical. “We have seen an increase in outsourcing to Asia, and imports exceed exports for low-end packaging. Another indicator for the overall flexo market has been the gradual decline of the corrugated packaging market since peaking in 2006. We expect the flexo market to remain flat throughout 2010.”
“From our point of view, the flexo market performed well in 2009, specially from the water-based side,” said Scott Reese, vice president of sales for Premier Ink Systems.
“Obviously with the economy it was a challenging year. Flexo was down, but it did not appear to be hit as hard as other sectors,” said Kenneth Keathley, director of marketing, Environmental Inks and Coatings (EIC).
Joe Kelly, vice president – technical director, INX International Ink Co., said that the flexo market for food packaging held up very well in 2009.
“The consumer momentum away from casual restaurant dining during this economic downturn has continued,” Mr. Kelly said. “The QSR (quick serve restaurants) market was strong in terms of printed units, and the consumer benefitted from the fast food price wars in some highly competitive markets.”
“I don’t have statistics to share, but I believe the flexo market fared pretty well last year given that the flexo process is the process of choice for a high percentage of consumer staples,” said George Sickinger, president/CEO, Color Resolutions International (CRI). In my view, the Latin American economies did not suffer as much as the U.S. economy. Our business grew south of the border last year and is continuing to expand. Those economies were not as leveraged as ours. However, there was a drawing down of inventories throughout the supply chain that affected everyone.”
“From the activity and enthusiasm at the recent FTA conference, it appears that the flexo market in the Americas fared pretty well, and certainly did not struggle as much as some of the traditional litho markets in 2009,” said Daryl Collins, Wikoff Color’s vice president, sales and regional operations. “There was considerable activity in all types of energy-curable flexo inks. The North American market for flexible packaging stayed pretty steady, but we saw limited investment in new presses and laminators.”
For whatever reasons – the economy, interest in increasing geographic scope and product portfolios – the past 12 months has witnessed a flurry of M&A activity. In the past year, there have been four acquisitions of packaging ink manufacturers:
• Handschy Industries: Acquired by Sun Chemical in June 2009.
• Water Ink Technologies: Acquired by ALTANA in July 2009.
• Torda Ink: Acquired by Flint Group in February 2010.
• Fluid Ink Technology: Acquired by Toyo Ink Group in April 2010.
What has been the cause of this trend? In terms of the major ink segments, the recession has had the least impact on the packaging ink market. Still, the economy did affect all companies’ margins, and that may have played a role.
Meanwhile, due to the market’s stability, larger ink companies are interested in growing in the packaging segment. Each of the companies that were acquired had sales somewhere in the neighborhood of $25 million to $35 million, and had developed successful niches in packaging that made consolidation attractive. For example, Toyo Ink acquired Fluid Ink Technology for both its product portfolio and its U.S. presence. Flint Group’s acquisition of Torda Ink gives it a strong presence in Scandinavia as well as additional packaging ink technologies. Water Ink Technologies was strong in the narrow web and label markets, an area of great interest for ALTANA.
Generally speaking, the worldwide recession has taken a toll on packaging printing, although most companies fared fairly well in spite of the economy.
Mr. Impastato said that 2009 was a down year for the flexo industry, but considering the depth of the worldwide recession, the final results were not too bad. “The recovery was relatively quick, and although many printers may not be back to pre-recession levels, we see a significant portion of the market doing well as we head to the end of 2010 Q1,” Mr. Impastato added.
“The economic downturn has clearly impacted our customers,” Mr. Renzi said. “Many of our customers have looked to flex their manufacturing by shifting man hours and the number of days that they are working. In today’s economy, our customers want to be more efficient and are increasingly turning to high speed presses to help them operationally realize this efficiency.”
“The recession has had an impact on some of our customers, but overall, most of our customers have shown growth in 2009 as well as in the early part of 2010,” Mr. Reese said.
“Every one of our customers experienced increased competition for the business,” Mr. Kelly said. “Many of our customers have expanded from their traditional areas into new applications in order to maintain utilization factors for their printing facilities.”
“Mid-2009 was slow as most customers tried to keep inventories low to reduce carrying costs,” Mr. Keathley reported. “We did see a slight improvement in the fourth quarter of 2009 that has continued into 2010.”
Mr. Sickinger noted that there was a definite softening of business last year.
“The drawing down of inventories resulting from the scary recession made for a double-digit decline in the first half of 2009,” Mr. Sickinger added. “The second half rebounded, but I wouldn’t call it robust. In 2010, business is slowly improving, but pricing levels are being challenged at a time when raw materials are starting to rise. The aggressive paper price increases will make it even tougher for ink companies to get needed price adjustments. Typically, the ink guy is the last one in the door to implement a price increase. Since the customer has already swallowed substantial substrate increases, I think the ink people get an unreasonable response to their relatively modest request.”
“One impact was the postponement of decisions to buy new presses, but that discussion seems to be gaining momentum again,” Mr. Collins said. “Some of our customers experienced slightly reduced volumes and pressure on their pricing in order to maintain market share.”
One of the side effects of the recession is that there is consolidation in the packaging industry.
“The larger and mid-size flexible packaging printers continue to consolidate as globalization impacts their customers and companies look to broaden their sales and product base,” Mr. Collins noted. “We did not see much consolidation in most of our other major flexo markets, however.”
“Consolidation is the norm,” Mr. Impastato said. “We have seen steady consolidation in the industry as the larger printers absorb mid-size printers. The only thing unusual this year has been the size of the some of the acquisitions. Consolidation will likely continue to be a factor. Within the more mature geographical markets areas, we see many segments of the flexo industry as having overcapacity in printing, creating significant competition. This will create winners and losers, and that will continue to drive consolidation.”
“I think we will see a new wave of customer consolidations,” Mr. Sickinger said. “Some companies did not fare well in the recession and must now divest to survive. The pace of consolidation should accelerate as the credit markets loosen.”
“Every year has seen more consolidation and we expect the trend will continue,” Mr. Kelly said. “The major consumer brands continue with their acquisitions and look at highly integrated multi-national printers as assets to their marketing and distribution strategies. These printer assets themselves consolidate to meet their customer’s needs. It also closes redundant capacity in their markets, evolving into print facilities with more focus and efficiency in regards to specific types of packaging.”
When it comes to packaging, particularly in North America, flexo has the dominant position.
“Water-based and UV/EB-based chemistries should experience growth, and that growth will likely be in flexible packaging and labels,” noted Martin Hambrock vice president Canada and manager, flexible packaging products for Wikoff Color. “We also expect to see continued expansion in shrink labels for beverage and food products.”
“Flexo has good opportunities for growth going forward,” Mr. Impastato said. “It is the leading technology used in the North American packaging and label markets and will remain unchallenged in the top market position for the foreseeable future. Although not as strong in Europe, flexo is still a key part of the packaging and label markets and will likely continue to grow in comparison to gravure and other printing processes.
“The versatility available from the flexo process is unmatched among printing process,” Mr. Impastato added. “In particular, flexo has a key position in packaging and labels because of its ability to perform on a wide variety of substrates. Going forward, this versatility will position flexo well as new substrates are brought to market. The packaging and labels market will continue to drive flexo growth.”
“We believe the flexible packaging segment will have healthy growth during the next couple of years due to the economy, as well as the food service segment,” Mr. Reese added.
“Specialty inks continue to be an area of growth,” Mr. Keathley said. “Our customers are constantly looking for ways to differentiate their products, which pushes us to be more innovative in our approach.”
Michelle Hearn, director of marketing, North American Inks, Sun Chemical, said that sustainability provides a key opportunity for flexo.
“The packaging market segment is where we see the most growth for flexo, especially as the trend in the market continues to move towards functional and sensory packaging,” said Ms. Hearn. “Source reduction, a smaller number of packaging layers, along with a decrease in packaging size continue to be ways consumer packaged goods companies are looking for support in their sustainability efforts. Additionally, biodegradable and recyclable flexible packaging materials are currently being favored by some retailers and brand owners. Sun Chemical anticipates further growth opportunities from these key areas related to sustainability.”
“The growth will be in high performance, more sustainable ink systems,” Mr. Sickinger said. “Walmart has got the CPCs focused on sustainability throughout the packaging supply chain.”
Mamoru Sasajima, Toyo Ink International’s president, said that his company is seeing growth in many markets.
“As we continue to see growth in the pouch market, another area that has shown significant growth is in labels and sleeves,” said Mr. Sasajima. “Film is becoming more and more prevalent with the lower cost for manufacturing and freight. In contrast, there is a renewed interest in the use of paper products due to the biodegradability and ‘green’ initiatives of many companies. Because of these driving forces, it will be imperative to have flexo inks that can be used with new varieties of vegetable based films and biodegradable paper stocks. Since we have created a new subsidiary, Toyo Ink Technologies, LLC, with the acquisition of Fluid Ink, the growth of our Toyo Ink will be in the combination of technologies to stay on the leading edge of where technology and environmental needs can be best fulfilled.
“The integration of the flexographic products, which Fluid Ink Technology offers, will compliment Toyo Ink’s current lineup of gravure, flexo, inkjet and security products,” Mr. Sasajima concluded. “With this combination of technology, we will not only be able to supply converters with products that cover the entire range of printing processes, but will have the expanded resources to remain an innovation leader.”
Mr. Sickinger said that given the vast improvements in quality over recent years, he sees flexo taking business from the offset printers on medium to long run jobs.
“Fluid inks companies, such as ours, should see the flexo market expand in the fine graphics area,” Mr. Sickinger said. “Many flexo printers do not have the ‘craftsmen’ skills in the pressroom like the offset printers. Aiding customers with process control will help to move the flexo printer to expand their markets.”
“We are expecting and preparing for some movement away from solvent inks to water-based products in the flexible packaging market for a variety of reasons,” Mr. Kelly said. “Printers may be reaching the maximum capacity on pollution abatement equipment or may be coming close to lowered annual VOC emissions thresholds. The major consumer products companies are pushing for greener alternatives to current packaging with water inks as a desirable approach. The multi-nationals are looking to demonstrate new technologies and are willing to work with printer assets and associated suppliers to establish the operational parameters and economics. Solvent inks will continue to be the dominant norm for flexible packaging, but even with a 3 to 4 percent increase in market share for water inks, this would potentially double the volumes.”
With the relative strength of packaging continuing, flexo ink manufacturers are developing innovative products to help converters and brand owners reach the customers.
There continues to be strong interest in the environment, and ink companies are emphasizing greener products.
“In keeping with our continued interest in conservation of the environment, Toyo Ink has developed a water-based flexo lamination ink that can be used for a variety of applications including boilable up to retort pouches,” Mr. Sasajima said. “AquaLiona fills the current need for a high performance multi purpose lamination flexo ink. It is designed to use for general flexible packaging applications on a wide range of films such as BOPP, PET, nylon, PVDC and other treated transparent barrier films, producing superior print quality, strong colors, and low residual solvent. Complimenting the versatility of this product, the AquaLiona line can be used with an extrusion lamination, adhesive lamination and solvent-less lamination.”
“In Japan, Toyo Ink has commercialized a water-based flexo formulation for use in baby diaper back sheets,” Mr. Sasajima added. “We’ve seen a trend towards the replacement of solvent-based products with the more skin-friendly, water-based type in such everyday-use products.”
Mr. Impastato noted that in Europe, Flint Group launched Premo Film SXS, a new water-based ink series that is free of volatile organic compounds and provides good adhesion on polyolefin films. “While today most surface printing on plastic film is done with solvent-based ink systems in order to achieve good adhesion, Premo Film SXS is a new ink generation for this application based on water instead of solvent,” he said.
“The packaging and label industry has been known for innovation,” Mr. Impastato said. “Packaging and label buyers press the printers for new and innovative looks and performance. Flint continues to support these industries with a pipeline of new products. In the U.S., our new solvent-based white laminating ink PolarTek has generated wide interest and has been seen as a step above the products previously offered. It has improved performance and due to its universal application has reduced inventories and working capital requirements for our customers.
“In addition, we started the worldwide launch of Flexocure FORCE, our new narrow web milestone development in UV flexo technology that will enable label printers to take another step forward in print quality,” Mr. Impastato added. “Flexocure FORCE offers improved mileage and press performance, much easier handling due to lower viscosity and no foaming, greater adhesion to a wider range of substrates and improved performance on many variable printing techniques. The results we have gathered from beta testing at leading converters is showing an overwhelmingly positive response, with literally 100 percent of the customer feedback reporting clear improved properties from printability and adhesion to press performance.”
“At Sun Chemical, we continually look for ways we can help our customers remain competitive, grow their businesses and succeed,” Mr. Renzi said. “We do that by listening to our customers’ needs and analyzing market trends that provide solutions to the challenges they are facing. One example of this is Sun Chemical’s SunSpectro SB Truweather, a flexo ink system specifically developed to withstand the outdoor elements that take a toll on outdoor packaging, including the sun, wind and rain. Designed to print on polyethylene to meet the high demands of outdoor packaging, including outdoor bags for fertilizers, potting soils, peat moss and outdoor overwraps for shingle and lumber wraps, the SunSpectro Truweather ink system: Maintains the package color for extended shelf life, ensures ease of handling of filled bags, allows for printing at high speeds, helps maintain package integrity for extended shelf life and permits worry-free substrate selection.”
“We believe that energy-curable flexo inks for specialty labels involving shrink, lamination, and in-mold, as well as for flexible packaging, are hot topics,” said Don Duncan, director, R&D at Wikoff Color. “We continue to introduce new inks for these applications and continue to focus on products with improved sustainability. For solvent flexo laminating applications, we have recently developed our ‘Radius Inks’ suitable for printing multiple packaging films for either adhesive or extrusion lamination. They have high color strength, low solvent retention and exhibit excellent bonds using multiple adhesives and films. We have also developed a high heat resistant solvent ink with good gloss and low solvent retention for surface and reverse print applications on films, paper and aluminum foils.”
Overall, flexo ink manufacturers are relatively optimistic about the near future.
“We expect the market will be highly competitive again, but it does offer good opportunities for growth,” Mr. Kelly said.
“We are forecasting 2010 to show healthy growth and to continue through 2011,” said Mr. Reese.
“We are optimistic and hope to continue to build on some successes from the fourth quarter in 2009, but there continues to be pressure on raw materials for both costs and availability,” Mr. Keathley noted.
“Wikoff expects to see growth in flexible packaging, growth in specialty labels, growth in UV/EB products and a rebound in traditional water-based inks in the coming year,” Mr. Collins noted.
Mr. Sickinger believes that 2010 will be a tough year. “The challenge will be to grow or replace revenue and volume while facing downward pricing pressure and rising raw materials and increasing demands for service,” Mr. Sickinger said. “For those that figure out how to do this successfully, it will result in a much more efficient and customer-focused organization.”
“The next 12 months are going to be very exciting,” Mr. Sasajima said. “We expect to see the integration of Fluid Ink Technology to be seamless for current customers, provide new solutions for those customers, and utilize our new synergy to produce rapid growth in the North American packaging market.”
Mr. Impastato said that 2010 will be better than 2009 and we will likely see a continuing recovery, but it will have its own challenges.
“Volume will most likely not completely recover to pre-recession levels in total during 2010,” Mr. Impastato said. “We will see some printers do very well, while others will struggle. Printers, and suppliers as well, who reacted swiftly and decisively to the new economic reality are much better positioned, and will prosper as the economy rights itself. Those that have delayed action, or refused to change, will find it difficult to be competitive. Business and business practices will not return to the status quo of pre-recession times. Those in the industry who successfully emerged from the recession will do much better than those who simply survived.”
“The European and North American flexo market had somewhat of a roller coaster year,” said Mike Impastato, vice president – strategic marketing, packaging and narrow web, for Flint Group. “January started very slowly with volume down across most segments. Printers had equipment shut down and were actively reducing inventories. But, once we got through the first quarter, the market began to come back to life and posted monthly increases through the second and third quarters before dropping off a bit in the historically slower fourth quarter.
“Most printers and suppliers felt much better about their businesses and the future exiting 2009 than they did entering 2009,” Mr. Impastato added. “The recovery was much faster than had been originally feared at the beginning of 2009. The Indian and Asian markets did not suffer nearly as much. Volume was off slightly, but only in comparison to the high levels of growth which these markets saw in 2006 through 2008.”
“Overall, the flexo market was flat in 2009,” said Tony Renzi, vice president of product management for liquid inks, North American Inks, Sun Chemical. “We have seen an increase in outsourcing to Asia, and imports exceed exports for low-end packaging. Another indicator for the overall flexo market has been the gradual decline of the corrugated packaging market since peaking in 2006. We expect the flexo market to remain flat throughout 2010.”
“From our point of view, the flexo market performed well in 2009, specially from the water-based side,” said Scott Reese, vice president of sales for Premier Ink Systems.
“Obviously with the economy it was a challenging year. Flexo was down, but it did not appear to be hit as hard as other sectors,” said Kenneth Keathley, director of marketing, Environmental Inks and Coatings (EIC).
Joe Kelly, vice president – technical director, INX International Ink Co., said that the flexo market for food packaging held up very well in 2009.
“The consumer momentum away from casual restaurant dining during this economic downturn has continued,” Mr. Kelly said. “The QSR (quick serve restaurants) market was strong in terms of printed units, and the consumer benefitted from the fast food price wars in some highly competitive markets.”
“I don’t have statistics to share, but I believe the flexo market fared pretty well last year given that the flexo process is the process of choice for a high percentage of consumer staples,” said George Sickinger, president/CEO, Color Resolutions International (CRI). In my view, the Latin American economies did not suffer as much as the U.S. economy. Our business grew south of the border last year and is continuing to expand. Those economies were not as leveraged as ours. However, there was a drawing down of inventories throughout the supply chain that affected everyone.”
“From the activity and enthusiasm at the recent FTA conference, it appears that the flexo market in the Americas fared pretty well, and certainly did not struggle as much as some of the traditional litho markets in 2009,” said Daryl Collins, Wikoff Color’s vice president, sales and regional operations. “There was considerable activity in all types of energy-curable flexo inks. The North American market for flexible packaging stayed pretty steady, but we saw limited investment in new presses and laminators.”
For whatever reasons – the economy, interest in increasing geographic scope and product portfolios – the past 12 months has witnessed a flurry of M&A activity. In the past year, there have been four acquisitions of packaging ink manufacturers:
• Handschy Industries: Acquired by Sun Chemical in June 2009.
• Water Ink Technologies: Acquired by ALTANA in July 2009.
• Torda Ink: Acquired by Flint Group in February 2010.
• Fluid Ink Technology: Acquired by Toyo Ink Group in April 2010.
What has been the cause of this trend? In terms of the major ink segments, the recession has had the least impact on the packaging ink market. Still, the economy did affect all companies’ margins, and that may have played a role.
Meanwhile, due to the market’s stability, larger ink companies are interested in growing in the packaging segment. Each of the companies that were acquired had sales somewhere in the neighborhood of $25 million to $35 million, and had developed successful niches in packaging that made consolidation attractive. For example, Toyo Ink acquired Fluid Ink Technology for both its product portfolio and its U.S. presence. Flint Group’s acquisition of Torda Ink gives it a strong presence in Scandinavia as well as additional packaging ink technologies. Water Ink Technologies was strong in the narrow web and label markets, an area of great interest for ALTANA.
Impact of the Recession
Generally speaking, the worldwide recession has taken a toll on packaging printing, although most companies fared fairly well in spite of the economy.
Mr. Impastato said that 2009 was a down year for the flexo industry, but considering the depth of the worldwide recession, the final results were not too bad. “The recovery was relatively quick, and although many printers may not be back to pre-recession levels, we see a significant portion of the market doing well as we head to the end of 2010 Q1,” Mr. Impastato added.
“The economic downturn has clearly impacted our customers,” Mr. Renzi said. “Many of our customers have looked to flex their manufacturing by shifting man hours and the number of days that they are working. In today’s economy, our customers want to be more efficient and are increasingly turning to high speed presses to help them operationally realize this efficiency.”
“The recession has had an impact on some of our customers, but overall, most of our customers have shown growth in 2009 as well as in the early part of 2010,” Mr. Reese said.
“Every one of our customers experienced increased competition for the business,” Mr. Kelly said. “Many of our customers have expanded from their traditional areas into new applications in order to maintain utilization factors for their printing facilities.”
“Mid-2009 was slow as most customers tried to keep inventories low to reduce carrying costs,” Mr. Keathley reported. “We did see a slight improvement in the fourth quarter of 2009 that has continued into 2010.”
Mr. Sickinger noted that there was a definite softening of business last year.
“The drawing down of inventories resulting from the scary recession made for a double-digit decline in the first half of 2009,” Mr. Sickinger added. “The second half rebounded, but I wouldn’t call it robust. In 2010, business is slowly improving, but pricing levels are being challenged at a time when raw materials are starting to rise. The aggressive paper price increases will make it even tougher for ink companies to get needed price adjustments. Typically, the ink guy is the last one in the door to implement a price increase. Since the customer has already swallowed substantial substrate increases, I think the ink people get an unreasonable response to their relatively modest request.”
“One impact was the postponement of decisions to buy new presses, but that discussion seems to be gaining momentum again,” Mr. Collins said. “Some of our customers experienced slightly reduced volumes and pressure on their pricing in order to maintain market share.”
One of the side effects of the recession is that there is consolidation in the packaging industry.
“The larger and mid-size flexible packaging printers continue to consolidate as globalization impacts their customers and companies look to broaden their sales and product base,” Mr. Collins noted. “We did not see much consolidation in most of our other major flexo markets, however.”
“Consolidation is the norm,” Mr. Impastato said. “We have seen steady consolidation in the industry as the larger printers absorb mid-size printers. The only thing unusual this year has been the size of the some of the acquisitions. Consolidation will likely continue to be a factor. Within the more mature geographical markets areas, we see many segments of the flexo industry as having overcapacity in printing, creating significant competition. This will create winners and losers, and that will continue to drive consolidation.”
“I think we will see a new wave of customer consolidations,” Mr. Sickinger said. “Some companies did not fare well in the recession and must now divest to survive. The pace of consolidation should accelerate as the credit markets loosen.”
“Every year has seen more consolidation and we expect the trend will continue,” Mr. Kelly said. “The major consumer brands continue with their acquisitions and look at highly integrated multi-national printers as assets to their marketing and distribution strategies. These printer assets themselves consolidate to meet their customer’s needs. It also closes redundant capacity in their markets, evolving into print facilities with more focus and efficiency in regards to specific types of packaging.”
Opportunities for Growth
When it comes to packaging, particularly in North America, flexo has the dominant position.
“Water-based and UV/EB-based chemistries should experience growth, and that growth will likely be in flexible packaging and labels,” noted Martin Hambrock vice president Canada and manager, flexible packaging products for Wikoff Color. “We also expect to see continued expansion in shrink labels for beverage and food products.”
“Flexo has good opportunities for growth going forward,” Mr. Impastato said. “It is the leading technology used in the North American packaging and label markets and will remain unchallenged in the top market position for the foreseeable future. Although not as strong in Europe, flexo is still a key part of the packaging and label markets and will likely continue to grow in comparison to gravure and other printing processes.
“The versatility available from the flexo process is unmatched among printing process,” Mr. Impastato added. “In particular, flexo has a key position in packaging and labels because of its ability to perform on a wide variety of substrates. Going forward, this versatility will position flexo well as new substrates are brought to market. The packaging and labels market will continue to drive flexo growth.”
“We believe the flexible packaging segment will have healthy growth during the next couple of years due to the economy, as well as the food service segment,” Mr. Reese added.
“Specialty inks continue to be an area of growth,” Mr. Keathley said. “Our customers are constantly looking for ways to differentiate their products, which pushes us to be more innovative in our approach.”
Michelle Hearn, director of marketing, North American Inks, Sun Chemical, said that sustainability provides a key opportunity for flexo.
“The packaging market segment is where we see the most growth for flexo, especially as the trend in the market continues to move towards functional and sensory packaging,” said Ms. Hearn. “Source reduction, a smaller number of packaging layers, along with a decrease in packaging size continue to be ways consumer packaged goods companies are looking for support in their sustainability efforts. Additionally, biodegradable and recyclable flexible packaging materials are currently being favored by some retailers and brand owners. Sun Chemical anticipates further growth opportunities from these key areas related to sustainability.”
“The growth will be in high performance, more sustainable ink systems,” Mr. Sickinger said. “Walmart has got the CPCs focused on sustainability throughout the packaging supply chain.”
Mamoru Sasajima, Toyo Ink International’s president, said that his company is seeing growth in many markets.
“As we continue to see growth in the pouch market, another area that has shown significant growth is in labels and sleeves,” said Mr. Sasajima. “Film is becoming more and more prevalent with the lower cost for manufacturing and freight. In contrast, there is a renewed interest in the use of paper products due to the biodegradability and ‘green’ initiatives of many companies. Because of these driving forces, it will be imperative to have flexo inks that can be used with new varieties of vegetable based films and biodegradable paper stocks. Since we have created a new subsidiary, Toyo Ink Technologies, LLC, with the acquisition of Fluid Ink, the growth of our Toyo Ink will be in the combination of technologies to stay on the leading edge of where technology and environmental needs can be best fulfilled.
“The integration of the flexographic products, which Fluid Ink Technology offers, will compliment Toyo Ink’s current lineup of gravure, flexo, inkjet and security products,” Mr. Sasajima concluded. “With this combination of technology, we will not only be able to supply converters with products that cover the entire range of printing processes, but will have the expanded resources to remain an innovation leader.”
Mr. Sickinger said that given the vast improvements in quality over recent years, he sees flexo taking business from the offset printers on medium to long run jobs.
“Fluid inks companies, such as ours, should see the flexo market expand in the fine graphics area,” Mr. Sickinger said. “Many flexo printers do not have the ‘craftsmen’ skills in the pressroom like the offset printers. Aiding customers with process control will help to move the flexo printer to expand their markets.”
“We are expecting and preparing for some movement away from solvent inks to water-based products in the flexible packaging market for a variety of reasons,” Mr. Kelly said. “Printers may be reaching the maximum capacity on pollution abatement equipment or may be coming close to lowered annual VOC emissions thresholds. The major consumer products companies are pushing for greener alternatives to current packaging with water inks as a desirable approach. The multi-nationals are looking to demonstrate new technologies and are willing to work with printer assets and associated suppliers to establish the operational parameters and economics. Solvent inks will continue to be the dominant norm for flexible packaging, but even with a 3 to 4 percent increase in market share for water inks, this would potentially double the volumes.”
Launching New Flexo Ink Products
With the relative strength of packaging continuing, flexo ink manufacturers are developing innovative products to help converters and brand owners reach the customers.
There continues to be strong interest in the environment, and ink companies are emphasizing greener products.
“In keeping with our continued interest in conservation of the environment, Toyo Ink has developed a water-based flexo lamination ink that can be used for a variety of applications including boilable up to retort pouches,” Mr. Sasajima said. “AquaLiona fills the current need for a high performance multi purpose lamination flexo ink. It is designed to use for general flexible packaging applications on a wide range of films such as BOPP, PET, nylon, PVDC and other treated transparent barrier films, producing superior print quality, strong colors, and low residual solvent. Complimenting the versatility of this product, the AquaLiona line can be used with an extrusion lamination, adhesive lamination and solvent-less lamination.”
“In Japan, Toyo Ink has commercialized a water-based flexo formulation for use in baby diaper back sheets,” Mr. Sasajima added. “We’ve seen a trend towards the replacement of solvent-based products with the more skin-friendly, water-based type in such everyday-use products.”
Mr. Impastato noted that in Europe, Flint Group launched Premo Film SXS, a new water-based ink series that is free of volatile organic compounds and provides good adhesion on polyolefin films. “While today most surface printing on plastic film is done with solvent-based ink systems in order to achieve good adhesion, Premo Film SXS is a new ink generation for this application based on water instead of solvent,” he said.
“The packaging and label industry has been known for innovation,” Mr. Impastato said. “Packaging and label buyers press the printers for new and innovative looks and performance. Flint continues to support these industries with a pipeline of new products. In the U.S., our new solvent-based white laminating ink PolarTek has generated wide interest and has been seen as a step above the products previously offered. It has improved performance and due to its universal application has reduced inventories and working capital requirements for our customers.
“In addition, we started the worldwide launch of Flexocure FORCE, our new narrow web milestone development in UV flexo technology that will enable label printers to take another step forward in print quality,” Mr. Impastato added. “Flexocure FORCE offers improved mileage and press performance, much easier handling due to lower viscosity and no foaming, greater adhesion to a wider range of substrates and improved performance on many variable printing techniques. The results we have gathered from beta testing at leading converters is showing an overwhelmingly positive response, with literally 100 percent of the customer feedback reporting clear improved properties from printability and adhesion to press performance.”
“At Sun Chemical, we continually look for ways we can help our customers remain competitive, grow their businesses and succeed,” Mr. Renzi said. “We do that by listening to our customers’ needs and analyzing market trends that provide solutions to the challenges they are facing. One example of this is Sun Chemical’s SunSpectro SB Truweather, a flexo ink system specifically developed to withstand the outdoor elements that take a toll on outdoor packaging, including the sun, wind and rain. Designed to print on polyethylene to meet the high demands of outdoor packaging, including outdoor bags for fertilizers, potting soils, peat moss and outdoor overwraps for shingle and lumber wraps, the SunSpectro Truweather ink system: Maintains the package color for extended shelf life, ensures ease of handling of filled bags, allows for printing at high speeds, helps maintain package integrity for extended shelf life and permits worry-free substrate selection.”
“We believe that energy-curable flexo inks for specialty labels involving shrink, lamination, and in-mold, as well as for flexible packaging, are hot topics,” said Don Duncan, director, R&D at Wikoff Color. “We continue to introduce new inks for these applications and continue to focus on products with improved sustainability. For solvent flexo laminating applications, we have recently developed our ‘Radius Inks’ suitable for printing multiple packaging films for either adhesive or extrusion lamination. They have high color strength, low solvent retention and exhibit excellent bonds using multiple adhesives and films. We have also developed a high heat resistant solvent ink with good gloss and low solvent retention for surface and reverse print applications on films, paper and aluminum foils.”
Expectations for the Coming Year
Overall, flexo ink manufacturers are relatively optimistic about the near future.
“We expect the market will be highly competitive again, but it does offer good opportunities for growth,” Mr. Kelly said.
“We are forecasting 2010 to show healthy growth and to continue through 2011,” said Mr. Reese.
“We are optimistic and hope to continue to build on some successes from the fourth quarter in 2009, but there continues to be pressure on raw materials for both costs and availability,” Mr. Keathley noted.
“Wikoff expects to see growth in flexible packaging, growth in specialty labels, growth in UV/EB products and a rebound in traditional water-based inks in the coming year,” Mr. Collins noted.
Mr. Sickinger believes that 2010 will be a tough year. “The challenge will be to grow or replace revenue and volume while facing downward pricing pressure and rising raw materials and increasing demands for service,” Mr. Sickinger said. “For those that figure out how to do this successfully, it will result in a much more efficient and customer-focused organization.”
“The next 12 months are going to be very exciting,” Mr. Sasajima said. “We expect to see the integration of Fluid Ink Technology to be seamless for current customers, provide new solutions for those customers, and utilize our new synergy to produce rapid growth in the North American packaging market.”
Mr. Impastato said that 2010 will be better than 2009 and we will likely see a continuing recovery, but it will have its own challenges.
“Volume will most likely not completely recover to pre-recession levels in total during 2010,” Mr. Impastato said. “We will see some printers do very well, while others will struggle. Printers, and suppliers as well, who reacted swiftly and decisively to the new economic reality are much better positioned, and will prosper as the economy rights itself. Those that have delayed action, or refused to change, will find it difficult to be competitive. Business and business practices will not return to the status quo of pre-recession times. Those in the industry who successfully emerged from the recession will do much better than those who simply survived.”