David Savastano, Editor04.27.22
The Latin American and South American printing and ink industry are far from a homogenous group. Each country has its own unique personality, with Brazil and Mexico the two largest economies. The ink market is the same in that regard; Ink World places the region’s ink market at approximately $1 billion annually, led by Brazil and Mexico, and leading ink manufacturers are present throughout Latin America.
In one way, each of these countries is similar, in that they have weathered much of the COVID-19 pandemic and are enjoying an economic rebound.
Fernando Tavara, president, Sun Chemical Latin America, said that despite the challenges created by the pandemic, 2021 has been strong overall for the ink and printing markets in Latin America.
“We saw an increase in customer demand for packaging inks in all segments, particularly with solvent-based inks related to flexible packaging for food and water-based inks for corrugated packaging,” Tavara reported. “Regarding publication inks, Sun Chemical had a solid year, though we see a significant long-term market decline in this segment. We expect packaging inks to continue growing steadily over the next few years, while publication inks will continue their gradual decline, with coldest inks more impacted than heatset.”
"It was a very challenging year for our market in Latin America,” added Guilherme Rubeiro, VP of South American operations for INX International Ink Co. “As we observed worldwide, supply chain disruptions, increases in prices and the scarcity of raw materials were factors that put pressure on our margins and operational efficiency."
Richard Möller, managing director of hubergroup Brazil, noted that the Latin and South American ink and printing industry continued to heavily feel the impact of the COVID-19 pandemic last year.
“Also, raw material costs and the shortage of freight capacities were major issues and put the market under great pressure to rise prices,” added Möller.
Sanchez SA de CV is the largest ink manufacturer in Mexico and Central America. Ernesto J. Sanchez, managing director for Sanchez SA de CV, said that while the economy rebounded, it needs further growth.
“After a sharp decline in our economy in 2020, 2021 represented bounce back year, with a growth of 4.8 % in our economy, but not enough for what the country needs,” said Sanchez. “Most of the markets we serve showed a healthy comeback during the year, and while some did not reach their pre-pandemic figures, they experienced a healthy growth over the previous year. Screen printing inks and lamination adhesives showed the best results, but other lines, like sheetfed inks, had a great performance.”
COVID-19 and the Ink Industry
The impact of COVID-19 on the economy was felt by all, but ink industry leaders are seeing a recovery in the printing and ink industries.
Rubeiro said that the impact of COVID-19 was widespread in countries within the region.
“Each one experienced a fiscal and monetary stimulus that provided relief for a brief period of time, but the pressure on each country's GDP/debt ratio likely won't help the economic situation for a long time,” added Rubeiro. “The printing and ink industries are only partially recovering since disruptive factors still exist. However, it is not a surprise anymore so we are now looking for alternative solutions."
“The COVID pandemic has hit the market hard, especially the commercial printing market,” Möller said. “However, we are happy to see some recovery here and are looking forward to slowly returning to normality at upcoming events such as the ExpoPrint & ConverExpo 2022.”
Tavara said that following a strong recovery in the first quarter of 2021, the overall GDP level in Latin America is expected to increase by 6.3% in 2021, followed by a modest growth of 3% in 2022, according to the International Monetary Fund (IMF).
“There is usually a high correlation of growth in the packaging market with GDP levels, and that was the case in 2021,” Tavara added. “However, converters and printers have been increasing their inventory levels to mitigate supply disruption risks associated to the pandemic. Consequently, we have seen changes in the demand not directly driven by economic activity, but by changes in our customers’ procurement strategies.
“Generally speaking, all countries in the region performed well,” Tavara observed. “Peru has been the most negatively impacted in terms of printing and ink due to lockdowns caused by the coronavirus pandemic.”
Tavara noted that the publication market, on the other hand, has dropped significantly and has been the most impacted printing market this year.
“The heatset market has gone down steadily, but we expect it will rebound, although it will not reach pre-pandemic levels and after that it will continue to decrease moderately,” Tavara noted. “The coldset market, however, will not recover from lost volumes. Commercial digital printing is slowly starting to expand across the region but hasn’t quite taken off yet. It is a market that likely will face a setback in growth in Latin America because of the pandemic.”
As for growth areas, Sun Chemical’s Tavara said that throughout most of Latin America, growth has been steady in flexible and corrugated packaging.
“Customers continued investing in expanding their production capacity in the region by buying new flexo presses,” he noted. “In recent years, we have seen a consolidation in the industry in Latin America, with multinational accounts acquiring local and regional players.
“We see an increased interest in sustainable products and in the promotion of the circular economy among our customer base,” added Tavara. “Sustainability is central to everything we do at Sun Chemical, and our collaborative approach – working with customers, suppliers, equipment and substrate manufacturers, brand owners, and recycling and environmental associations – allows us to maximize sustainability in every aspect of what we do. We believe sustainability is a collaborative journey.”
“We are particularly seeing growth in the printing market for food, hygiene, and pharmaceutical packaging, both in flexible and cardboard packaging,” Möller pbserved. “In addition, the commercial printing markets across South America slowly start to recover from the COVID pandemic.”
"The metal deco business is growing in the region since the trend is towards environmentally friendly packaging,” Rubeiro reported. “We are seeing growth in the Digital inks business as well, with new applications being developed and greater interest from customers."
New Operations in Latin and South America
With an eye on further growth, some companies are investing int more resources in Latin and South America, Rubeiro said that INX is looking forward to growing momentum in the region.
“Our operations in Paraguay and Colombia are being consolidated and we are exploring new business in Ecuador and Central America,” Rubeiro said. “We expect to have a new facility in Mexico this year, and we are aiming to enhance our technical and sales teams to provide the best service to our customers in the region."
Tavara noted that Sun Chemical has recently made investments in Bogota, Colombia; Lima, Peru; and Monterrey, Mexico. In addition, significant investments have also been made in the new site in Bonsucesso, Brazil.
“Our new facilities feature expanded production capabilities and help manage the needs of customers in these regions,” Tavara added.” Sun Chemical has also implemented seven Color Centers in Latin America. These investments are essential to our strategy in Latin America and confirm the long-term commitment that Sun Chemical has to the region.”
Outlook for the Future
Ink industry leaders say they are looking ahead to the coming year, although supply chain issues remain a major concern.
“The present year, 2022, shows no signs of any great year in terms of the growth of our economy, and the war in Ukraine sure does not help,” said Sanchez. “The shortage and prices increase of our raw material continue but we have managed to keep the pace of our activity up.”
“We expect 2022 to be a challenging year in terms of the supply chain,” Tavara concluded. “Unprecedented inflationary pressure and shortages of materials, combined with the global transportation crisis, will continue to have a strong impact on the raw materials and packaging markets. Sun Chemical’s leadership as a global supplier of inks and coatings and our multiple sites in Latin American allowed us to ensure continued supply for our customers.
“Our nimble global procurement team has played a key role in ensuring that there were no interruptions in supply to our customers during this crisis,” Tavara added. “This ability to meet our customer needs even in the most challenging of circumstances puts Sun Chemical in a strong position for future growth in the Latin American printing and ink markets.”
"We remain confident that the region is capable of presenting growth above the world average in relation to our market,” said Rubeiro. “LatAm can contribute by providing products to other parts of the world that struggle to meet market demand, and our domestic markets are still maturing in terms of packaging usage."
“We are optimistic that the economies in Latin and South America will now slowly recover from the COVID pandemic,” said Möller. “Besides that, we believe that sustainable print products will be a major focus in the coming years as the demand for these continues to increase. At hubergroup, we have well prepared for this with certified products for both offset, UV, and liquid inks.”
In one way, each of these countries is similar, in that they have weathered much of the COVID-19 pandemic and are enjoying an economic rebound.
Fernando Tavara, president, Sun Chemical Latin America, said that despite the challenges created by the pandemic, 2021 has been strong overall for the ink and printing markets in Latin America.
“We saw an increase in customer demand for packaging inks in all segments, particularly with solvent-based inks related to flexible packaging for food and water-based inks for corrugated packaging,” Tavara reported. “Regarding publication inks, Sun Chemical had a solid year, though we see a significant long-term market decline in this segment. We expect packaging inks to continue growing steadily over the next few years, while publication inks will continue their gradual decline, with coldest inks more impacted than heatset.”
"It was a very challenging year for our market in Latin America,” added Guilherme Rubeiro, VP of South American operations for INX International Ink Co. “As we observed worldwide, supply chain disruptions, increases in prices and the scarcity of raw materials were factors that put pressure on our margins and operational efficiency."
Richard Möller, managing director of hubergroup Brazil, noted that the Latin and South American ink and printing industry continued to heavily feel the impact of the COVID-19 pandemic last year.
“Also, raw material costs and the shortage of freight capacities were major issues and put the market under great pressure to rise prices,” added Möller.
Sanchez SA de CV is the largest ink manufacturer in Mexico and Central America. Ernesto J. Sanchez, managing director for Sanchez SA de CV, said that while the economy rebounded, it needs further growth.
“After a sharp decline in our economy in 2020, 2021 represented bounce back year, with a growth of 4.8 % in our economy, but not enough for what the country needs,” said Sanchez. “Most of the markets we serve showed a healthy comeback during the year, and while some did not reach their pre-pandemic figures, they experienced a healthy growth over the previous year. Screen printing inks and lamination adhesives showed the best results, but other lines, like sheetfed inks, had a great performance.”
COVID-19 and the Ink Industry
The impact of COVID-19 on the economy was felt by all, but ink industry leaders are seeing a recovery in the printing and ink industries.
Rubeiro said that the impact of COVID-19 was widespread in countries within the region.
“Each one experienced a fiscal and monetary stimulus that provided relief for a brief period of time, but the pressure on each country's GDP/debt ratio likely won't help the economic situation for a long time,” added Rubeiro. “The printing and ink industries are only partially recovering since disruptive factors still exist. However, it is not a surprise anymore so we are now looking for alternative solutions."
“The COVID pandemic has hit the market hard, especially the commercial printing market,” Möller said. “However, we are happy to see some recovery here and are looking forward to slowly returning to normality at upcoming events such as the ExpoPrint & ConverExpo 2022.”
Tavara said that following a strong recovery in the first quarter of 2021, the overall GDP level in Latin America is expected to increase by 6.3% in 2021, followed by a modest growth of 3% in 2022, according to the International Monetary Fund (IMF).
“There is usually a high correlation of growth in the packaging market with GDP levels, and that was the case in 2021,” Tavara added. “However, converters and printers have been increasing their inventory levels to mitigate supply disruption risks associated to the pandemic. Consequently, we have seen changes in the demand not directly driven by economic activity, but by changes in our customers’ procurement strategies.
“Generally speaking, all countries in the region performed well,” Tavara observed. “Peru has been the most negatively impacted in terms of printing and ink due to lockdowns caused by the coronavirus pandemic.”
Tavara noted that the publication market, on the other hand, has dropped significantly and has been the most impacted printing market this year.
“The heatset market has gone down steadily, but we expect it will rebound, although it will not reach pre-pandemic levels and after that it will continue to decrease moderately,” Tavara noted. “The coldset market, however, will not recover from lost volumes. Commercial digital printing is slowly starting to expand across the region but hasn’t quite taken off yet. It is a market that likely will face a setback in growth in Latin America because of the pandemic.”
As for growth areas, Sun Chemical’s Tavara said that throughout most of Latin America, growth has been steady in flexible and corrugated packaging.
“Customers continued investing in expanding their production capacity in the region by buying new flexo presses,” he noted. “In recent years, we have seen a consolidation in the industry in Latin America, with multinational accounts acquiring local and regional players.
“We see an increased interest in sustainable products and in the promotion of the circular economy among our customer base,” added Tavara. “Sustainability is central to everything we do at Sun Chemical, and our collaborative approach – working with customers, suppliers, equipment and substrate manufacturers, brand owners, and recycling and environmental associations – allows us to maximize sustainability in every aspect of what we do. We believe sustainability is a collaborative journey.”
“We are particularly seeing growth in the printing market for food, hygiene, and pharmaceutical packaging, both in flexible and cardboard packaging,” Möller pbserved. “In addition, the commercial printing markets across South America slowly start to recover from the COVID pandemic.”
"The metal deco business is growing in the region since the trend is towards environmentally friendly packaging,” Rubeiro reported. “We are seeing growth in the Digital inks business as well, with new applications being developed and greater interest from customers."
New Operations in Latin and South America
With an eye on further growth, some companies are investing int more resources in Latin and South America, Rubeiro said that INX is looking forward to growing momentum in the region.
“Our operations in Paraguay and Colombia are being consolidated and we are exploring new business in Ecuador and Central America,” Rubeiro said. “We expect to have a new facility in Mexico this year, and we are aiming to enhance our technical and sales teams to provide the best service to our customers in the region."
Tavara noted that Sun Chemical has recently made investments in Bogota, Colombia; Lima, Peru; and Monterrey, Mexico. In addition, significant investments have also been made in the new site in Bonsucesso, Brazil.
“Our new facilities feature expanded production capabilities and help manage the needs of customers in these regions,” Tavara added.” Sun Chemical has also implemented seven Color Centers in Latin America. These investments are essential to our strategy in Latin America and confirm the long-term commitment that Sun Chemical has to the region.”
Outlook for the Future
Ink industry leaders say they are looking ahead to the coming year, although supply chain issues remain a major concern.
“The present year, 2022, shows no signs of any great year in terms of the growth of our economy, and the war in Ukraine sure does not help,” said Sanchez. “The shortage and prices increase of our raw material continue but we have managed to keep the pace of our activity up.”
“We expect 2022 to be a challenging year in terms of the supply chain,” Tavara concluded. “Unprecedented inflationary pressure and shortages of materials, combined with the global transportation crisis, will continue to have a strong impact on the raw materials and packaging markets. Sun Chemical’s leadership as a global supplier of inks and coatings and our multiple sites in Latin American allowed us to ensure continued supply for our customers.
“Our nimble global procurement team has played a key role in ensuring that there were no interruptions in supply to our customers during this crisis,” Tavara added. “This ability to meet our customer needs even in the most challenging of circumstances puts Sun Chemical in a strong position for future growth in the Latin American printing and ink markets.”
"We remain confident that the region is capable of presenting growth above the world average in relation to our market,” said Rubeiro. “LatAm can contribute by providing products to other parts of the world that struggle to meet market demand, and our domestic markets are still maturing in terms of packaging usage."
“We are optimistic that the economies in Latin and South America will now slowly recover from the COVID pandemic,” said Möller. “Besides that, we believe that sustainable print products will be a major focus in the coming years as the demand for these continues to increase. At hubergroup, we have well prepared for this with certified products for both offset, UV, and liquid inks.”