Sean Milmo, Ink World European Editor03.11.11
Much of Europe’s printing ink industry faces a year of struggle in 2011 against static demand and the continued challenge of rising raw material costs. The traditional inks sector in the region looks unlikely ever to regain the amounts of annual total sales in the pre-recession period.
Of the major segments, only packaging inks seem to have a chance of returning to the levels of consumption prior to the financial crisis of 2008. But even that market may not make a full recovery for two to three years.
In 2010, total printing ink sales in Europe were in volume and value terms much the same as they were in 2009, when they amounted to about 1 million tons with a value of around €3 billion ($4 billion), according to figures from the European Printing Inks Association (EuPIA).
In 2007, they were 14 percent higher by value and volume at €3.5 billion and 1.45 million tons respectively.
Felipe Mellado, chief marketing officer at Sun Chemical, said that 2011 looks likely to be another year of flat sales by volume and value as it was in 2010.
“The exception will be packaging inks, where again there will be a slight improvement on the previous year,” Mr. Mellado said. “The publications market in Europe seems unlikely to get back to the sales levels of 2007. but the packaging sector may achieve the same sales as before the financial crisis within a couple more years.”
The growth areas in packaging are likely to be those requiring innovative inks, which will also be a driver behind higher sales in digital printing, particularly inkjet.
In the longer term, an increasing number of established ink manufacturers, as well as newcomers to ink production, are looking for opportunities to enter the printed electronics sector, which is now beginning to take off in Europe.
Ironically, it is the electronic media on the Internet and in mobile communications which is continuing to undermine the traditional print media in Europe, in particular newspapers and magazines.
Much of the post-recession growth in advertising is being grabbed by the Internet so that newspapers and magazines publishers are increasingly having to go online. This switch only exacerbates the decline in pagination volumes and hence the demand for ink. It also impacts other printed promotional techniques, such as direct mail.
The European Economy and the Ink Industry
Last year, the European chemical industry and much of its downstream formulation sectors enjoyed a big rebound in sales as European economies started to recover from the recession. Chemical output shot up by 10 percent in 2010, according to preliminary estimates by the European Chemical Industry Council (Cefic), the chemical industry trade association.
However, the printing ink sector was unable to enjoy a similar revival mainly because of the intense competition from the Internet.
In 2011, the chemicals industry and its major customer segments are expected to experience much more moderate growth. Cefic is expecting a rise of chemical production of only 2.5 percent.
Across Europe, growth in GDP is anticipated to be patchy, averaging 1.7 percent in the European Union’s 27 member states, according to the latest forecast by the European Commission, the EU’s Brussels-based executive. Some countries have moved abruptly from a policy of a public expenditure increase to stimulate their economies to a strategy of sharp government spending cuts to reduce public sector budget deficits.
In Germany, which is Europe’s largest economy as well as its biggest printing ink market, GDP is forecast to rise by 2.2 percent against 3.7 percent in 2010.
In the UK, which before the recession was Europe’s second largest printing inks market ahead of Italy in third position, is expected to experience GDP growth of 2.2 percent this year against 1.8 percent in 2010. However it is now level pegging with Italy in printing inks with sales of around €350 million against €500 million in 2007 before GDP plunged by more than 5 percent during the recession.
Italy, whose GDP growth is expected to remain static at 1.1 percent this year, suffered a similar GDP decline as the UK after the financial crisis. But while the UK’s printing ink market has been hit by the country’s large publications sector, Italy’s printing ink sector has shown itself to be more resilient because it is more specialized with a high proportion of high added-value niches.
In France, GDP growth this year is predicted to be only 1.6 percent higher than in 2010. But the decline in demand for printing products in the country has been less steep than in the UK because of a smaller publications segment.
Raw Material Costs
Europe’s ink industry is now striving to boost sales and profitability in the post-recession period in the face of an unprecedented surge in raw material costs.
Since the first half of last year, ink producers have been raising their prices to their customers because of an inability to absorb the higher raw material costs. Initially they introduced single-digit percentage increases, but by late last year and early 2011 these had become double-digit increases.
“The factors behind the rise in raw material costs still remain unresolved,” said Mr. Mellado. “We don’t expect any change to conditions in the raw materials market this year. They may even get worse.”
Sun Chemical announced in mid-February its latest increase in prices – an average 10 percent rise for heatset, coldset and publication gravure inks.
“The unprecedented volatility in the supply of raw materials is challenging the entire industry,” said Mr. Mellado. “Sun Chemical now needs to review its prices continuously to ensure profitability and product efficiency.”
Siegwerk has warned that continued higher costs for a range of raw materials will leave it with little alternative but to charge higher prices for its own products.
“Higher raw material prices have such a big impact on our business that we have to pass on some of these costs to our customers,” said Herbert Forker, Siegwerk’s chief executive. “The situation has not eased at the end of 2010 and recent supplier announcements have resulted in further price increases and continued tightness on the supply side.”
Flint Group has revealed that it may have to change some of its formulations if the costs of raw materials continue to rise. The shortage of key raw materials for packaging and narrow web inks “may require product adaptations,” according to Jan Paul van der Velde, senior vice president procurement at Flint Group. But these would be carried out in close cooperation with customers “to ensure a smooth transition in case any change in technology is needed.”
In a series of bulletins to its customers on the reasons and extent of the rise in raw material prices, Flint Group has traced the roots of the increases to trends before the recession when suppliers started to cut back production capacity and, ominously, moved away from the ink sector altogether.
The steep rise in raw material prices would have occurred earlier but for the collapse in demand stemming from destocking after the 2008 financial crisis, according to Flint Group. When European economies started to recover in the second half of 2009 and companies began rebuilding inventories, chemical producers were unable to boost output sufficiently to meet demand, particularly in relatively small segments like printing inks.
Shortages of key basic chemicals such as benzene, toluene, ethylene and propylene have had ripple effects on a wide range of ink raw materials.
Some of the scarcities were due to a reorganization of petrochemical production as a result of cheaper feedstocks derived from natural gas. In the U.S., a shift to shale gas feedstocks by chemical companies triggered shortages of propylene, which prompted a rise in propylene exports into the country from Europe.
Consequently propylene prices have soared by 150 to 200 percent in Europe over the last two years. This has affected supplies of derivatives like acrylic acid and acrylates used in resins for energy-curable inks and for water-based inks.
The increased dependence of the European ink sector on supplies of raw materials from China has stimulated big rises in prices of gum rosin and for certain pigments whose raw materials are made in the country.
China accounts for around 60 percent of the world’s output of gum rosin, whose properties are crucial to the performance of some inks, such as those used in high speed offset printing.
Since 2009, gum rosin prices have rocketed from around $800 per ton to more than $3,000 by the beginning of this year.
“Chinese production has been affected by the high cost of labor for harvesting the gum rosin crop from pine trees, while there has also been competition for supplies from other sectors like adhesives,” said one procurement manager in the European inks sector. “ But a comparatively small group of Chinese traders also have a big influence on the market.”
Acquisitions and Alliances
Pressure on margins from high raw material costs and sluggish demand have forced producers of traditional printing inks to step up their diversification in areas like services and distribution of consumables.
They have also been forming alliances with distributors in order to gain greater access to a wider range of customers.
Siegwerk has recently formed an alliance with the Danish distributor RR Print in Scandinavia so that RR can extend to inks its concept of being a one-stop source of consumables and technical equipment for the graphics industry.
Late last year, Flint Group entered a deal with Heidelberg under which the German printing press manufacturer became its exclusive distributor in Finland of its sheetfed offset inks, press room chemicals and blankets. Heidelberg, which also distributed Flint Group’s sheetfed inks in Russia, has also developed a strategy of one-stop sources for a wide range of requirements for printers.
Ink companies have also been expanding outside their main domestic markets in Western Europe into the peripheral areas of Eastern Europe, North Africa the Middle East and Asia. These are regions where they have greater flexibility with prices, especially with specialty inks.
After completion of its acquisition of the Swedish ink maker Torda, Flint Group has been using Torda’s infrastructure to extend its activities in the Middle East, where it already has a significant market share in packaging and narrow web inks.
Flint Group is also building a new state-of-the-art manufacturing site for packaging and narrow web inks near Baroda, India, where it has roots going back several decades to its predecessor companies. “The new site in India is the next logical step to prepare the grounds for continuous growth over the next few years,” said George Lyle, Flint Group’s vice president packaging and narrow web.
Siegwerk strengthened its position in the U.S. packaging market with the acquisition of North Carolina-based Environmental Inks and Coatings (EIC), a specialist in narrow web label inks.
Many ink companies have been attempting to expand in the European packaging market, which has a variety of growth niches with opportunities for innovative products with higher-margin sales than in other segments.
Packaging has become a key area for extension of provision of services, particularly those which help customers to comply with tougher regulations in the food packaging sector.
A growing number of food companies now only want inks which are specially formulated for food packaging and have a low migration rate.
Siegwerk has, for example, opened laboratories at Annemasse, France, with equipment like gas and liquid chromotography and UV and mass spectrometry to measure the migration levels of inks. The availability of the equipment helps printers and food processors keep within even very low levels of migration thresholds for inks applied to food contact materials.
Digital’s Growth
Packaging is also an area of expansion for manufacturers and users of digital printing equipment, which has intensified competition across most printing sectors between digital and conventional printing processes.
The big inroads being made by digital technologies into the traditional printing market were demonstrated at last year’s IPEX printing exhibition in Birmingham, England, the second largest international printing show after drupa. For the first time at IPEX, more space was taken up by digital printing equipment companies and services than by those businesses mainly involved in conventional printing.
Hewlett Packard (HP), the leading digital OEM, was the exhibitor with the largest stand exceeding that of Heidelberg, the global leader in printing press manufacture and usually IPEX’s biggest participant, who was this time pushed into No.2 position. The next four leading exhibitors – Canon, Xerox, Fujifilm and Kodak – are all major OEMs.
The leading manufacturers of conventional printing presses are now trying to establish a stronger presence in the digital sector.
Manroland of Germany and the Netherlands-based Oce Printing Systems, a subsidiary of Canon of Japan and a leader in digital printing for professionals, announced in December that they are forming an alliance in inkjet printing for the graphics art industry. The partnership will aim to bring offset and digital processes closer together in applications such as books, advertising, inserts, catalogs and brochures.
Heidelberg, which revealed at IPEX in May that it was seeking an alliance in digital printing, is expected to disclose shortly its choice of partner. Among the possible candidates is Kodak, with whom Heidelberg was a partner in the Nexpress inkjet joint venture before withdrawing from the project six years ago.
Companies like manroland and Heidelberg are focusing on digital printing within the higher volume sections of the total European printing industry.
A study of the European printing industry released in February by the market research company Infotrends shows that the sector with an annual turnover of almost €150 billion continues to be highly fragmented. The vast majority of small businesses and operators which continue to dominate the sector are the type which are mainly dependent on digital printing processes.
In terms of numbers of printing establishments, commercial printing had the biggest share of 33 percent with the next largest being small copy/print sites with 23 percent. The next largest were in-house print operators with 12 percent and photocopy services with 11 percent. Packaging printers accounted for 0.9 percent, label printers 1.7 percent and newspaper printers 0.6 percent.
In terms of total revenue, commercial printers provided more than half, indicating their importance in the battle between digital and conventional printing processes. In-house printing sites and packaging printers accounted for 10 percent each of the total turnover, according to the study.
Despite its fragmentation, the digital sector has not escaped the effects of the recession within Europe. The decline in black and white printing has accelerated. Instead, a recovery in sectors like copying and small print operators will have to come from a stronger need for color printing.
In-house printing units in Europe have been maintaining volumes but have been holding back investments in new equipment, according to a survey last year by Infotrends.
The response among OEMs to the dwindling demand has been to speed up innovations, particularly in inkjet technologies and applications. At IPEX most of the leading digital press manufacturers introduced new or improved inkjet ink technologies.
Xerox, long recognized as a leader in toner-based technologies, has begun to roll out in Europe a technology introduced at IPEX for a waterless inkjet ink based on a polymeric, dye-based formulation which enables the ink to be supplied in granular form. It is turned into liquid within the inkjet, reverting to a solid as soon as it drops on the paper where it polymerizes without penetrating the paper fiber.
Many of its OEM rivals have been concentrating on the development of water-based inkjet inks whose low viscosity would seem to be more appropriate for flowing through tiny printhead nozzles. Xerox has been focusing on the benefit of using paper which does not have to be coated to prevent penetration by the water-based inks. Its solid ink can be applied to low-cost plain paper.
HP is targeting the books and direct mail markets in Europe with its range of inkjet web presses, which are effectively hybrids filling the gap between low-volume digital print-on-demand systems and analog offset book presses that require long run lengths to be economical. The inkjet web technology enables book printers, for example, to fulfill both on-demand and short-run orders.
The expansion of installations of the HP inkjet web press in Europe is yet an another indicator of how much digital processes are penetrating all areas of traditional printing – not just commercial and packaging but the publications sector as well. The inkjet web technology overlaps with conventional processes by incorporating features found in traditional offset web presses.
OEM manufacturers have also been more determined to keep control of the inks and toners used in their digital presses. They have been active in bringing litigation against producers of compatible inks and toners in the aftermarket for ink and toner refills for breaches of intellectual property rights.
They are also trying to broaden their sources of revenue. They have been following the example of their counterparts in conventional press manufacture by widening the range of services they offer to customers. But the big driver is the way the office equipment market is increasingly becoming a services-led business because of its reliance on IT and need for efficient workflow systems.
Canon revealed late last year that it is setting up a consultancy services business with the consultancy Accenture, While Accenture will contribute in skills in business management, Canon will provide its expertise in information and imaging systems.
Konica Minolta is forming a partnership in Europe with Getronics BV of the Netherlands, a specialist in IT networks and management services. It provides a round-the-clock service response.
With this greater emphasis on services across all printing sectors, ink producers are having to upgrade their own services. But at the same time they are having to differentiate themselves by exploiting their technological expertise in chemistry, materials and formulations.
European Editor Sean Milmo is an Essex, UK-based writer specializing in coverage of the chemical industry.
Of the major segments, only packaging inks seem to have a chance of returning to the levels of consumption prior to the financial crisis of 2008. But even that market may not make a full recovery for two to three years.
In 2010, total printing ink sales in Europe were in volume and value terms much the same as they were in 2009, when they amounted to about 1 million tons with a value of around €3 billion ($4 billion), according to figures from the European Printing Inks Association (EuPIA).
In 2007, they were 14 percent higher by value and volume at €3.5 billion and 1.45 million tons respectively.
Felipe Mellado, chief marketing officer at Sun Chemical, said that 2011 looks likely to be another year of flat sales by volume and value as it was in 2010.
“The exception will be packaging inks, where again there will be a slight improvement on the previous year,” Mr. Mellado said. “The publications market in Europe seems unlikely to get back to the sales levels of 2007. but the packaging sector may achieve the same sales as before the financial crisis within a couple more years.”
The growth areas in packaging are likely to be those requiring innovative inks, which will also be a driver behind higher sales in digital printing, particularly inkjet.
In the longer term, an increasing number of established ink manufacturers, as well as newcomers to ink production, are looking for opportunities to enter the printed electronics sector, which is now beginning to take off in Europe.
Ironically, it is the electronic media on the Internet and in mobile communications which is continuing to undermine the traditional print media in Europe, in particular newspapers and magazines.
Much of the post-recession growth in advertising is being grabbed by the Internet so that newspapers and magazines publishers are increasingly having to go online. This switch only exacerbates the decline in pagination volumes and hence the demand for ink. It also impacts other printed promotional techniques, such as direct mail.
The European Economy and the Ink Industry
Last year, the European chemical industry and much of its downstream formulation sectors enjoyed a big rebound in sales as European economies started to recover from the recession. Chemical output shot up by 10 percent in 2010, according to preliminary estimates by the European Chemical Industry Council (Cefic), the chemical industry trade association.
However, the printing ink sector was unable to enjoy a similar revival mainly because of the intense competition from the Internet.
In 2011, the chemicals industry and its major customer segments are expected to experience much more moderate growth. Cefic is expecting a rise of chemical production of only 2.5 percent.
Across Europe, growth in GDP is anticipated to be patchy, averaging 1.7 percent in the European Union’s 27 member states, according to the latest forecast by the European Commission, the EU’s Brussels-based executive. Some countries have moved abruptly from a policy of a public expenditure increase to stimulate their economies to a strategy of sharp government spending cuts to reduce public sector budget deficits.
In Germany, which is Europe’s largest economy as well as its biggest printing ink market, GDP is forecast to rise by 2.2 percent against 3.7 percent in 2010.
In the UK, which before the recession was Europe’s second largest printing inks market ahead of Italy in third position, is expected to experience GDP growth of 2.2 percent this year against 1.8 percent in 2010. However it is now level pegging with Italy in printing inks with sales of around €350 million against €500 million in 2007 before GDP plunged by more than 5 percent during the recession.
Italy, whose GDP growth is expected to remain static at 1.1 percent this year, suffered a similar GDP decline as the UK after the financial crisis. But while the UK’s printing ink market has been hit by the country’s large publications sector, Italy’s printing ink sector has shown itself to be more resilient because it is more specialized with a high proportion of high added-value niches.
In France, GDP growth this year is predicted to be only 1.6 percent higher than in 2010. But the decline in demand for printing products in the country has been less steep than in the UK because of a smaller publications segment.
Raw Material Costs
Europe’s ink industry is now striving to boost sales and profitability in the post-recession period in the face of an unprecedented surge in raw material costs.
Since the first half of last year, ink producers have been raising their prices to their customers because of an inability to absorb the higher raw material costs. Initially they introduced single-digit percentage increases, but by late last year and early 2011 these had become double-digit increases.
“The factors behind the rise in raw material costs still remain unresolved,” said Mr. Mellado. “We don’t expect any change to conditions in the raw materials market this year. They may even get worse.”
Sun Chemical announced in mid-February its latest increase in prices – an average 10 percent rise for heatset, coldset and publication gravure inks.
“The unprecedented volatility in the supply of raw materials is challenging the entire industry,” said Mr. Mellado. “Sun Chemical now needs to review its prices continuously to ensure profitability and product efficiency.”
Siegwerk has warned that continued higher costs for a range of raw materials will leave it with little alternative but to charge higher prices for its own products.
“Higher raw material prices have such a big impact on our business that we have to pass on some of these costs to our customers,” said Herbert Forker, Siegwerk’s chief executive. “The situation has not eased at the end of 2010 and recent supplier announcements have resulted in further price increases and continued tightness on the supply side.”
Flint Group has revealed that it may have to change some of its formulations if the costs of raw materials continue to rise. The shortage of key raw materials for packaging and narrow web inks “may require product adaptations,” according to Jan Paul van der Velde, senior vice president procurement at Flint Group. But these would be carried out in close cooperation with customers “to ensure a smooth transition in case any change in technology is needed.”
In a series of bulletins to its customers on the reasons and extent of the rise in raw material prices, Flint Group has traced the roots of the increases to trends before the recession when suppliers started to cut back production capacity and, ominously, moved away from the ink sector altogether.
The steep rise in raw material prices would have occurred earlier but for the collapse in demand stemming from destocking after the 2008 financial crisis, according to Flint Group. When European economies started to recover in the second half of 2009 and companies began rebuilding inventories, chemical producers were unable to boost output sufficiently to meet demand, particularly in relatively small segments like printing inks.
Shortages of key basic chemicals such as benzene, toluene, ethylene and propylene have had ripple effects on a wide range of ink raw materials.
Some of the scarcities were due to a reorganization of petrochemical production as a result of cheaper feedstocks derived from natural gas. In the U.S., a shift to shale gas feedstocks by chemical companies triggered shortages of propylene, which prompted a rise in propylene exports into the country from Europe.
Consequently propylene prices have soared by 150 to 200 percent in Europe over the last two years. This has affected supplies of derivatives like acrylic acid and acrylates used in resins for energy-curable inks and for water-based inks.
The increased dependence of the European ink sector on supplies of raw materials from China has stimulated big rises in prices of gum rosin and for certain pigments whose raw materials are made in the country.
China accounts for around 60 percent of the world’s output of gum rosin, whose properties are crucial to the performance of some inks, such as those used in high speed offset printing.
Since 2009, gum rosin prices have rocketed from around $800 per ton to more than $3,000 by the beginning of this year.
“Chinese production has been affected by the high cost of labor for harvesting the gum rosin crop from pine trees, while there has also been competition for supplies from other sectors like adhesives,” said one procurement manager in the European inks sector. “ But a comparatively small group of Chinese traders also have a big influence on the market.”
Acquisitions and Alliances
Pressure on margins from high raw material costs and sluggish demand have forced producers of traditional printing inks to step up their diversification in areas like services and distribution of consumables.
They have also been forming alliances with distributors in order to gain greater access to a wider range of customers.
Siegwerk has recently formed an alliance with the Danish distributor RR Print in Scandinavia so that RR can extend to inks its concept of being a one-stop source of consumables and technical equipment for the graphics industry.
Late last year, Flint Group entered a deal with Heidelberg under which the German printing press manufacturer became its exclusive distributor in Finland of its sheetfed offset inks, press room chemicals and blankets. Heidelberg, which also distributed Flint Group’s sheetfed inks in Russia, has also developed a strategy of one-stop sources for a wide range of requirements for printers.
Ink companies have also been expanding outside their main domestic markets in Western Europe into the peripheral areas of Eastern Europe, North Africa the Middle East and Asia. These are regions where they have greater flexibility with prices, especially with specialty inks.
After completion of its acquisition of the Swedish ink maker Torda, Flint Group has been using Torda’s infrastructure to extend its activities in the Middle East, where it already has a significant market share in packaging and narrow web inks.
Flint Group is also building a new state-of-the-art manufacturing site for packaging and narrow web inks near Baroda, India, where it has roots going back several decades to its predecessor companies. “The new site in India is the next logical step to prepare the grounds for continuous growth over the next few years,” said George Lyle, Flint Group’s vice president packaging and narrow web.
Siegwerk strengthened its position in the U.S. packaging market with the acquisition of North Carolina-based Environmental Inks and Coatings (EIC), a specialist in narrow web label inks.
Many ink companies have been attempting to expand in the European packaging market, which has a variety of growth niches with opportunities for innovative products with higher-margin sales than in other segments.
Packaging has become a key area for extension of provision of services, particularly those which help customers to comply with tougher regulations in the food packaging sector.
A growing number of food companies now only want inks which are specially formulated for food packaging and have a low migration rate.
Siegwerk has, for example, opened laboratories at Annemasse, France, with equipment like gas and liquid chromotography and UV and mass spectrometry to measure the migration levels of inks. The availability of the equipment helps printers and food processors keep within even very low levels of migration thresholds for inks applied to food contact materials.
Digital’s Growth
Packaging is also an area of expansion for manufacturers and users of digital printing equipment, which has intensified competition across most printing sectors between digital and conventional printing processes.
The big inroads being made by digital technologies into the traditional printing market were demonstrated at last year’s IPEX printing exhibition in Birmingham, England, the second largest international printing show after drupa. For the first time at IPEX, more space was taken up by digital printing equipment companies and services than by those businesses mainly involved in conventional printing.
Hewlett Packard (HP), the leading digital OEM, was the exhibitor with the largest stand exceeding that of Heidelberg, the global leader in printing press manufacture and usually IPEX’s biggest participant, who was this time pushed into No.2 position. The next four leading exhibitors – Canon, Xerox, Fujifilm and Kodak – are all major OEMs.
The leading manufacturers of conventional printing presses are now trying to establish a stronger presence in the digital sector.
Manroland of Germany and the Netherlands-based Oce Printing Systems, a subsidiary of Canon of Japan and a leader in digital printing for professionals, announced in December that they are forming an alliance in inkjet printing for the graphics art industry. The partnership will aim to bring offset and digital processes closer together in applications such as books, advertising, inserts, catalogs and brochures.
Heidelberg, which revealed at IPEX in May that it was seeking an alliance in digital printing, is expected to disclose shortly its choice of partner. Among the possible candidates is Kodak, with whom Heidelberg was a partner in the Nexpress inkjet joint venture before withdrawing from the project six years ago.
Companies like manroland and Heidelberg are focusing on digital printing within the higher volume sections of the total European printing industry.
A study of the European printing industry released in February by the market research company Infotrends shows that the sector with an annual turnover of almost €150 billion continues to be highly fragmented. The vast majority of small businesses and operators which continue to dominate the sector are the type which are mainly dependent on digital printing processes.
In terms of numbers of printing establishments, commercial printing had the biggest share of 33 percent with the next largest being small copy/print sites with 23 percent. The next largest were in-house print operators with 12 percent and photocopy services with 11 percent. Packaging printers accounted for 0.9 percent, label printers 1.7 percent and newspaper printers 0.6 percent.
In terms of total revenue, commercial printers provided more than half, indicating their importance in the battle between digital and conventional printing processes. In-house printing sites and packaging printers accounted for 10 percent each of the total turnover, according to the study.
Despite its fragmentation, the digital sector has not escaped the effects of the recession within Europe. The decline in black and white printing has accelerated. Instead, a recovery in sectors like copying and small print operators will have to come from a stronger need for color printing.
In-house printing units in Europe have been maintaining volumes but have been holding back investments in new equipment, according to a survey last year by Infotrends.
The response among OEMs to the dwindling demand has been to speed up innovations, particularly in inkjet technologies and applications. At IPEX most of the leading digital press manufacturers introduced new or improved inkjet ink technologies.
Xerox, long recognized as a leader in toner-based technologies, has begun to roll out in Europe a technology introduced at IPEX for a waterless inkjet ink based on a polymeric, dye-based formulation which enables the ink to be supplied in granular form. It is turned into liquid within the inkjet, reverting to a solid as soon as it drops on the paper where it polymerizes without penetrating the paper fiber.
Many of its OEM rivals have been concentrating on the development of water-based inkjet inks whose low viscosity would seem to be more appropriate for flowing through tiny printhead nozzles. Xerox has been focusing on the benefit of using paper which does not have to be coated to prevent penetration by the water-based inks. Its solid ink can be applied to low-cost plain paper.
HP is targeting the books and direct mail markets in Europe with its range of inkjet web presses, which are effectively hybrids filling the gap between low-volume digital print-on-demand systems and analog offset book presses that require long run lengths to be economical. The inkjet web technology enables book printers, for example, to fulfill both on-demand and short-run orders.
The expansion of installations of the HP inkjet web press in Europe is yet an another indicator of how much digital processes are penetrating all areas of traditional printing – not just commercial and packaging but the publications sector as well. The inkjet web technology overlaps with conventional processes by incorporating features found in traditional offset web presses.
OEM manufacturers have also been more determined to keep control of the inks and toners used in their digital presses. They have been active in bringing litigation against producers of compatible inks and toners in the aftermarket for ink and toner refills for breaches of intellectual property rights.
They are also trying to broaden their sources of revenue. They have been following the example of their counterparts in conventional press manufacture by widening the range of services they offer to customers. But the big driver is the way the office equipment market is increasingly becoming a services-led business because of its reliance on IT and need for efficient workflow systems.
Canon revealed late last year that it is setting up a consultancy services business with the consultancy Accenture, While Accenture will contribute in skills in business management, Canon will provide its expertise in information and imaging systems.
Konica Minolta is forming a partnership in Europe with Getronics BV of the Netherlands, a specialist in IT networks and management services. It provides a round-the-clock service response.
With this greater emphasis on services across all printing sectors, ink producers are having to upgrade their own services. But at the same time they are having to differentiate themselves by exploiting their technological expertise in chemistry, materials and formulations.
European Editor Sean Milmo is an Essex, UK-based writer specializing in coverage of the chemical industry.