David Savastano, Editor07.02.15
With estimated ink sales of nearly $2 billion, the Latin American (LATAM) region is one of the fastest-growing areas for ink manufacturers. However, LATAM is hardly a homogenous region; LATAM is led by Brazil and Mexico, with other countries growing at their own rate.
Alex Garcia, business development, INX International Ink Co., said that to understand the Latin American market, you must look at the overall economy.
“The digital printing industry does not exactly mirror the economy but it certainly has an impact,” he added. “The current GDP of Latin American countries indicate there is a growth of sub 3%, with Mexico, Colombia and Chile leading the way. Argentina, Brazil and Venezuela have a negative GDP and high inflation rates.
“The lower price of oil also has largely impacted the Latin American economy,” Garcia added. “Most negatively affected are oil producers in Colombia, Ecuador and Venezuela. They rely on oil for exports and tax revenues - and to a lesser extent in Brazil and Mexico - which have more diversified economies. Conversely, the price declines benefit oil importers such as Chile, Peru, Central America and the Caribbean. The economy in Mexico continues to grow around 2.7% annually.”
Nestor Porto, VP operations for Flint Group Latin America, reported that much like North America, Latin America is seeing growth n packaging and declines in publication printing.
"In the Latin American printing industry, there have been mixed results,” said Porto. “Print Media volumes were and will continue to be a challenge, in part due to the increased use of digital media, which at this point affects nearly all countries around the world. Although we have seen a stronger decline during 2014 and into 2015, compared with previous years, we expect the decline in Latin America to be lower than in North America or Europe. In the packaging segment we continue to see a growth trend above GDP levels. This remains an important focus for Flint Group as well as other suppliers to this segment of the industry."
“Latin America is a vast region with big differences between countries and economies,” Fernando Tavara, president, Sun Chemical Latin America, said. “In general the region has had positive growth, although not at the same level of previous years. Packaging grew close to the GDP level of each country, while the publications market has experienced moderate growth. Brazil, which is the main market in the region, has experienced difficulties that are expected to continue this year. Mexico, the second biggest market, continues to grow at a solid pace, driven by the U.S. economy. The main opportunities are in packaging.”
Antonio Blanco, hubergroup’s director of sales for Central and South America, said that the printing industry’s performance is directly related to the economic growth of each respective country.
“Most of the Latin American economies grew in 2014, so the printing industry also did, but not all countries grew at the same rate,” Blanco said. “Brazil, Peru, Colombia, Paraguay, Bolivia and Ecuador had a very positive performance; others like Venezuela, Argentina, Uruguay were less successful.
“By business fields, packaging inks showed a positive development in most of the countries, while commercial printing had an uneven performance very much related to the economic growth as mentioned before,” Blanco added.
“Printing processes are linked to the business fields and economies as well,” Blanco noted. “In those countries with positive development, investments in new high speed machinery have significantly increased. That of course affected the capacities and with it ink consumption. The growth of the packaging sector did especially influence the presence of the flexo printing process.”
Rob Callif, VP of BCM Inks, a flexo ink specialist, said his company enjoyed growth in the region during 2014.
“The Latin and South American market grew for us in 2014,” Callif reported. “We expect the printing market to grow this year, but a strong dollar, political instability within Latin and South American countries, and a decrease in the price of oil for oil rich countries will affect the overall growth.”
Brazil
Brazil is the largest country in the region, but economic troubles in are having a huge impact on Brazil and the Brazilian printing industry.
“In Brazil, the whole economy is in a deep crisis, with inflation, interest rates and unemployment rising,” said Gero Pluecker, president of Cromos S.A. Tintas Graficas, which is focused almost exclusively on Brazil. “Our currency has been devaluated about 35% in the last 12 months against the US dollar, and industry is suffering. Depending on the segment, there are figures of about 30% business reduction, not to mention the specific poor situation of the printing market.
“This is a political crisis, and unfortunately there are no signs yet of better days,” Pluecker added. “This will last long. Nobody dreams about growth; one wishes only to survive. Especially domestic companies, like Cromos, are having hard times, with the competition of multinational companies.”
Pluecker noted that Cromos’ sales are holding steady. “Cromos is managing in keeping the market share, despite all competition, and we just got the yearly prize from the Brazilian Graphprint magazine as the best printing ink supplier,” Pluecker said. “This is the 13th prize in a row.”
Yu Adachi of Toyo Ink SC Holdings Co., Ltd.'s corporate communication department, also noted that 2014 was a tough year for Brazil, as domestic demand remained soft for most of the year. He believes that consolidation among printers is likely to continue.
“In the second half of 2014, presidential and state elections helped to revive print orders from candidates running for government office,” Adachi said. “Printing companies saw roughly 20% growth between August to October as demand rose for printed materials such as posters, fliers, car banners, etc. In addition, we continue to see the Brazil printing industry go through a period of adjustment in which smaller-capacity firms are being weeded or bought out. We expect the industry to further consolidate in 2015.”
Mexico and Central America
While the Mexican economy did not show economic growth during 2014, the economy did pick up during the first half of 2015, driven by the national election.
“In Mexico, we experienced fairly good economic growth for the first half of 2015, some of it because the mid-term elections were held on June 6,” said Ernesto J. Sanchez, Sanchez SA de CV’s managing director. “My concern, and some analysts agree, is that we might experience a slow economy in the second half of the year. The amount of money expended during the election in incredible, and that is all gone. Regarding elections, I must say that screenprinting has always been one of the ink systems that sees more benefit during elections, and this time was no exception.”
“The Mexican graphic arts market, which is closely linked to the U.S. market, has benefited from an economic rebound in the United States, resulting in moderate growth in 2014,” Adachi said. “In addition, the Mexican market for food applications is growing rapidly. Headquartered in Guadalajara, Toyo Ink Arets Mexico saw growth in demand for offset EB inks as well as low-odor EB varnishes that comply with Swiss regulations.”
In particular, Sanchez noted that the company had excellent results in El Salvador and is growing in Colombia.
“In Central America the economies in most of the countries we serve are showing stability, allowing us to have some steady growth for the past years, with our subsidiary in El Salvador the one with the best performance,” Sanchez said.
“In Colombia, we just bought the Sanchez Colombia shares from the Preflex Group, and we are sure this will allow us to move faster in this South American market, which is so important for us,” Sanchez added. “One of the first decisions we took is the move of our operations to a new facility.”
Growth Opportunities for Ink Manufacturers
With growth being seen in the packaging sector, there is an increase in interest in flexo and UV printing.
“In general, the printing processes related to packaging are growing, but we are seeing a slow migration from gravure to flexo,” Tavara said. “The offset printing market is stable in Latin America and growing in some countries. The digital market is growing in Latin America, driven by the increasing growth in the use of Chinese manufactured low cost digital printing presses for wide format and super wide formats.”
"We see flexographic printing taking a lead position in the Latin American region based on the number of new presses being acquired,” Porto said. “This is mainly due to the end user's needs. They are looking for versatility in the number of designs they market which in turn requires shorter runs, high quality reproduction and efficiency from the converter. Flexo printing provides these attributes."
Pluecker noted that offset is still the main printing process, although it shows no growth. “Flexo is growing, while gravure not growing,” Pluecker said. “UV inks are growing, especially in the packaging sector. Digital is also growing.”
“The most popular printing system is conventional offset printing as the process of tradition,” Adachi said. “We are, however, seeing a steady rise in offset UV sheetfed for packaging and flexo UV for labels.”
Adachi believes that there is room to grow for publication as well as packing printing.
“Ad spend and specialized packaging provide opportunities for growth,” Adachi said. “Latin America is expected to experience a growth surge in ad spending with Latin American magazines and newspapers increasing funds for ad spending. In addition, we expect to see a stronger focus on solutions for the food industry as flexible packaging converters in the region continue to expand and grow over 2014 levels. Toyo Ink will further build up our packaging ink and coating portfolio with technologies such as high-end retort inks for flexo and gravure printing. Our retort pouch technology has been met with success in South American markets for its ability to extend the shelf life of products while shortening processing times.
“Another growth opportunity is high-value-added UV ink solutions for food packaging,” Adachi noted. “Low-migration and low-odor inks are required for these applications, and Toyo Ink has vast expertise in the field. As the Toyo Ink Group offers both low-migration offset UV and flexo UV inks that have been adapted to Swiss regulations and the new Nestlé standards, we are positioned to further penetrate the food packaging world.”
Garcia is seeing growth in the digital printing segment.
“A global estimate indicates the printing inks market is expected to reach $20.17 billion (U.S.) by 2020 at a 5% CAGR,” Garcia pointed out. “Despite various Latin American challenges, the digital printing industry continues to carve out a larger segment of the industry as a whole. Textile markets in direct to garment printing and sublimation are continuing to grow, particularly in Argentina, Brazil and Colombia, and other regions are beginning to get some traction.
“With regards to digital ink technologies, water-based inks such as dye dispersion and pigmented inks for sublimation and direct printing are gaining ground, primarily in the apparel industry,” Garcia added.
Blanco and Callif both noted that service is an important factor for Latin American printers.
“Most ink manufacturers target on the packaging printing industry, of course also serving commercial printing,” Blanco said. “Logistics and services finally are the key: ink delivery in LATAM is complicated and expensive, due to the geographical conditions. Having a sufficient number of hubs is necessary to offer the appropriate service to customers. The ink manufacturers that do not invest in LATAM will not be able play an important role as ink suppliers.”
“Growth opportunities for ink companies are providing innovative products and technical support to ensure sales opportunities and production efficiencies for the printers,” Callif said.
UV’s Growth
UV is an area of growth globally, and this is true also in LATAM. For example, Blanco said that hubergroup is seeing particularly good results in the UV segment.
“UV printing also grows with the packaging business, but UV printing technology is complex to assess,” Blanco added. “The use of UV inks increases by three effects: traditional printers of offset packaging move to UV printing, increasing availability of low migration UV inks and UV flexo inks growing along with the labeling industry.”
“UV ink is gaining more traction as more UV commercial printers are being produced and sold in Latin American markets,” Garcia said. “INX continues to diligently invest in R&D to provide cost effective solutions while meeting or exceeding quality standards.”
“The UV ink and coating markets continue to grow in Latin American markets,” Adachi added. “For Toyo, our high sensitivity UV inks have proven extremely successful in printing jobs that demand not only the special properties of UV, but also the high color, halftone reproduction and high gloss provided by oil-based inks. “
"We are starting to see growth in the UV low migration ink segment for folding carton food packaging,” Porto said. “Printers need to meet global industry standards, and we are prepared with our full line of UV low migration solutions."
“The UV market in Latin America is growing though it is still small when compared to other regions of the world,” Tavara said. “At Sun Chemical, we see many opportunities for growth in all printing segments and other areas like LED UV.”
Expectations for the Coming Year
Ink manufacturers believe that the best is yet to come in the region, although concerns over Brazil remain.
“We expect that the market will continue to grow,” Tavara said. “We will see more consolidation of the customer base and also significant investments by competitors in the region. Brazil will have a difficult year, since domestic demand is not picking up.”
“Most of the countries in LATAM will continue to grow, but we expect the growth to slow down,” Blanco said. “The ink industry will continue to develop along with the rate of the economies, but it will not be as it was in 2014. Large and important countries like Brazil and Argentina currently don’t grow, and that is likely to have an impact on other countries like Uruguay, Paraguay and Bolivia. The continent’s part from Colombia to Mexico is expected to show results with better stability.”
“INX continues to grow the market in the region with a substantial distribution channel,” Garcia concluded. “By nurturing our long term successful relationships, we continue to grow and provide quality product and service at competitive pricing.”
“Toyo Ink expects moderate growth for the Latin America printing market in 2015, led by Mexico. Little to no growth is anticipated for the Brazil printing market due to sluggish domestic demand,” Adachi said. “Toyo Ink Brasil expects to see the domestic printing market react favorably to municipal and local election results as municipal leaders facilitate positive program and policy changes for local industry on a broader basis than state and national administrations. Expectations are also high for the 2016 Summer Olympic Games to be held in Rio de Janeiro. The Games is expected to stimulate industry activity and generate business opportunities in the region. Growth will predominantly be concentrated in package printing and publishing, especially newspaper and magazine printing.”
Alex Garcia, business development, INX International Ink Co., said that to understand the Latin American market, you must look at the overall economy.
“The digital printing industry does not exactly mirror the economy but it certainly has an impact,” he added. “The current GDP of Latin American countries indicate there is a growth of sub 3%, with Mexico, Colombia and Chile leading the way. Argentina, Brazil and Venezuela have a negative GDP and high inflation rates.
“The lower price of oil also has largely impacted the Latin American economy,” Garcia added. “Most negatively affected are oil producers in Colombia, Ecuador and Venezuela. They rely on oil for exports and tax revenues - and to a lesser extent in Brazil and Mexico - which have more diversified economies. Conversely, the price declines benefit oil importers such as Chile, Peru, Central America and the Caribbean. The economy in Mexico continues to grow around 2.7% annually.”
Nestor Porto, VP operations for Flint Group Latin America, reported that much like North America, Latin America is seeing growth n packaging and declines in publication printing.
"In the Latin American printing industry, there have been mixed results,” said Porto. “Print Media volumes were and will continue to be a challenge, in part due to the increased use of digital media, which at this point affects nearly all countries around the world. Although we have seen a stronger decline during 2014 and into 2015, compared with previous years, we expect the decline in Latin America to be lower than in North America or Europe. In the packaging segment we continue to see a growth trend above GDP levels. This remains an important focus for Flint Group as well as other suppliers to this segment of the industry."
“Latin America is a vast region with big differences between countries and economies,” Fernando Tavara, president, Sun Chemical Latin America, said. “In general the region has had positive growth, although not at the same level of previous years. Packaging grew close to the GDP level of each country, while the publications market has experienced moderate growth. Brazil, which is the main market in the region, has experienced difficulties that are expected to continue this year. Mexico, the second biggest market, continues to grow at a solid pace, driven by the U.S. economy. The main opportunities are in packaging.”
Antonio Blanco, hubergroup’s director of sales for Central and South America, said that the printing industry’s performance is directly related to the economic growth of each respective country.
“Most of the Latin American economies grew in 2014, so the printing industry also did, but not all countries grew at the same rate,” Blanco said. “Brazil, Peru, Colombia, Paraguay, Bolivia and Ecuador had a very positive performance; others like Venezuela, Argentina, Uruguay were less successful.
“By business fields, packaging inks showed a positive development in most of the countries, while commercial printing had an uneven performance very much related to the economic growth as mentioned before,” Blanco added.
“Printing processes are linked to the business fields and economies as well,” Blanco noted. “In those countries with positive development, investments in new high speed machinery have significantly increased. That of course affected the capacities and with it ink consumption. The growth of the packaging sector did especially influence the presence of the flexo printing process.”
Rob Callif, VP of BCM Inks, a flexo ink specialist, said his company enjoyed growth in the region during 2014.
“The Latin and South American market grew for us in 2014,” Callif reported. “We expect the printing market to grow this year, but a strong dollar, political instability within Latin and South American countries, and a decrease in the price of oil for oil rich countries will affect the overall growth.”
Brazil
Brazil is the largest country in the region, but economic troubles in are having a huge impact on Brazil and the Brazilian printing industry.
“In Brazil, the whole economy is in a deep crisis, with inflation, interest rates and unemployment rising,” said Gero Pluecker, president of Cromos S.A. Tintas Graficas, which is focused almost exclusively on Brazil. “Our currency has been devaluated about 35% in the last 12 months against the US dollar, and industry is suffering. Depending on the segment, there are figures of about 30% business reduction, not to mention the specific poor situation of the printing market.
“This is a political crisis, and unfortunately there are no signs yet of better days,” Pluecker added. “This will last long. Nobody dreams about growth; one wishes only to survive. Especially domestic companies, like Cromos, are having hard times, with the competition of multinational companies.”
Pluecker noted that Cromos’ sales are holding steady. “Cromos is managing in keeping the market share, despite all competition, and we just got the yearly prize from the Brazilian Graphprint magazine as the best printing ink supplier,” Pluecker said. “This is the 13th prize in a row.”
Yu Adachi of Toyo Ink SC Holdings Co., Ltd.'s corporate communication department, also noted that 2014 was a tough year for Brazil, as domestic demand remained soft for most of the year. He believes that consolidation among printers is likely to continue.
“In the second half of 2014, presidential and state elections helped to revive print orders from candidates running for government office,” Adachi said. “Printing companies saw roughly 20% growth between August to October as demand rose for printed materials such as posters, fliers, car banners, etc. In addition, we continue to see the Brazil printing industry go through a period of adjustment in which smaller-capacity firms are being weeded or bought out. We expect the industry to further consolidate in 2015.”
Mexico and Central America
While the Mexican economy did not show economic growth during 2014, the economy did pick up during the first half of 2015, driven by the national election.
“In Mexico, we experienced fairly good economic growth for the first half of 2015, some of it because the mid-term elections were held on June 6,” said Ernesto J. Sanchez, Sanchez SA de CV’s managing director. “My concern, and some analysts agree, is that we might experience a slow economy in the second half of the year. The amount of money expended during the election in incredible, and that is all gone. Regarding elections, I must say that screenprinting has always been one of the ink systems that sees more benefit during elections, and this time was no exception.”
“The Mexican graphic arts market, which is closely linked to the U.S. market, has benefited from an economic rebound in the United States, resulting in moderate growth in 2014,” Adachi said. “In addition, the Mexican market for food applications is growing rapidly. Headquartered in Guadalajara, Toyo Ink Arets Mexico saw growth in demand for offset EB inks as well as low-odor EB varnishes that comply with Swiss regulations.”
In particular, Sanchez noted that the company had excellent results in El Salvador and is growing in Colombia.
“In Central America the economies in most of the countries we serve are showing stability, allowing us to have some steady growth for the past years, with our subsidiary in El Salvador the one with the best performance,” Sanchez said.
“In Colombia, we just bought the Sanchez Colombia shares from the Preflex Group, and we are sure this will allow us to move faster in this South American market, which is so important for us,” Sanchez added. “One of the first decisions we took is the move of our operations to a new facility.”
Growth Opportunities for Ink Manufacturers
With growth being seen in the packaging sector, there is an increase in interest in flexo and UV printing.
“In general, the printing processes related to packaging are growing, but we are seeing a slow migration from gravure to flexo,” Tavara said. “The offset printing market is stable in Latin America and growing in some countries. The digital market is growing in Latin America, driven by the increasing growth in the use of Chinese manufactured low cost digital printing presses for wide format and super wide formats.”
"We see flexographic printing taking a lead position in the Latin American region based on the number of new presses being acquired,” Porto said. “This is mainly due to the end user's needs. They are looking for versatility in the number of designs they market which in turn requires shorter runs, high quality reproduction and efficiency from the converter. Flexo printing provides these attributes."
Pluecker noted that offset is still the main printing process, although it shows no growth. “Flexo is growing, while gravure not growing,” Pluecker said. “UV inks are growing, especially in the packaging sector. Digital is also growing.”
“The most popular printing system is conventional offset printing as the process of tradition,” Adachi said. “We are, however, seeing a steady rise in offset UV sheetfed for packaging and flexo UV for labels.”
Adachi believes that there is room to grow for publication as well as packing printing.
“Ad spend and specialized packaging provide opportunities for growth,” Adachi said. “Latin America is expected to experience a growth surge in ad spending with Latin American magazines and newspapers increasing funds for ad spending. In addition, we expect to see a stronger focus on solutions for the food industry as flexible packaging converters in the region continue to expand and grow over 2014 levels. Toyo Ink will further build up our packaging ink and coating portfolio with technologies such as high-end retort inks for flexo and gravure printing. Our retort pouch technology has been met with success in South American markets for its ability to extend the shelf life of products while shortening processing times.
“Another growth opportunity is high-value-added UV ink solutions for food packaging,” Adachi noted. “Low-migration and low-odor inks are required for these applications, and Toyo Ink has vast expertise in the field. As the Toyo Ink Group offers both low-migration offset UV and flexo UV inks that have been adapted to Swiss regulations and the new Nestlé standards, we are positioned to further penetrate the food packaging world.”
Garcia is seeing growth in the digital printing segment.
“A global estimate indicates the printing inks market is expected to reach $20.17 billion (U.S.) by 2020 at a 5% CAGR,” Garcia pointed out. “Despite various Latin American challenges, the digital printing industry continues to carve out a larger segment of the industry as a whole. Textile markets in direct to garment printing and sublimation are continuing to grow, particularly in Argentina, Brazil and Colombia, and other regions are beginning to get some traction.
“With regards to digital ink technologies, water-based inks such as dye dispersion and pigmented inks for sublimation and direct printing are gaining ground, primarily in the apparel industry,” Garcia added.
Blanco and Callif both noted that service is an important factor for Latin American printers.
“Most ink manufacturers target on the packaging printing industry, of course also serving commercial printing,” Blanco said. “Logistics and services finally are the key: ink delivery in LATAM is complicated and expensive, due to the geographical conditions. Having a sufficient number of hubs is necessary to offer the appropriate service to customers. The ink manufacturers that do not invest in LATAM will not be able play an important role as ink suppliers.”
“Growth opportunities for ink companies are providing innovative products and technical support to ensure sales opportunities and production efficiencies for the printers,” Callif said.
UV’s Growth
UV is an area of growth globally, and this is true also in LATAM. For example, Blanco said that hubergroup is seeing particularly good results in the UV segment.
“UV printing also grows with the packaging business, but UV printing technology is complex to assess,” Blanco added. “The use of UV inks increases by three effects: traditional printers of offset packaging move to UV printing, increasing availability of low migration UV inks and UV flexo inks growing along with the labeling industry.”
“UV ink is gaining more traction as more UV commercial printers are being produced and sold in Latin American markets,” Garcia said. “INX continues to diligently invest in R&D to provide cost effective solutions while meeting or exceeding quality standards.”
“The UV ink and coating markets continue to grow in Latin American markets,” Adachi added. “For Toyo, our high sensitivity UV inks have proven extremely successful in printing jobs that demand not only the special properties of UV, but also the high color, halftone reproduction and high gloss provided by oil-based inks. “
"We are starting to see growth in the UV low migration ink segment for folding carton food packaging,” Porto said. “Printers need to meet global industry standards, and we are prepared with our full line of UV low migration solutions."
“The UV market in Latin America is growing though it is still small when compared to other regions of the world,” Tavara said. “At Sun Chemical, we see many opportunities for growth in all printing segments and other areas like LED UV.”
Expectations for the Coming Year
Ink manufacturers believe that the best is yet to come in the region, although concerns over Brazil remain.
“We expect that the market will continue to grow,” Tavara said. “We will see more consolidation of the customer base and also significant investments by competitors in the region. Brazil will have a difficult year, since domestic demand is not picking up.”
“Most of the countries in LATAM will continue to grow, but we expect the growth to slow down,” Blanco said. “The ink industry will continue to develop along with the rate of the economies, but it will not be as it was in 2014. Large and important countries like Brazil and Argentina currently don’t grow, and that is likely to have an impact on other countries like Uruguay, Paraguay and Bolivia. The continent’s part from Colombia to Mexico is expected to show results with better stability.”
“INX continues to grow the market in the region with a substantial distribution channel,” Garcia concluded. “By nurturing our long term successful relationships, we continue to grow and provide quality product and service at competitive pricing.”
“Toyo Ink expects moderate growth for the Latin America printing market in 2015, led by Mexico. Little to no growth is anticipated for the Brazil printing market due to sluggish domestic demand,” Adachi said. “Toyo Ink Brasil expects to see the domestic printing market react favorably to municipal and local election results as municipal leaders facilitate positive program and policy changes for local industry on a broader basis than state and national administrations. Expectations are also high for the 2016 Summer Olympic Games to be held in Rio de Janeiro. The Games is expected to stimulate industry activity and generate business opportunities in the region. Growth will predominantly be concentrated in package printing and publishing, especially newspaper and magazine printing.”