Shem Oirere, Africa Correspondent01.25.16
Analysts project Africa’s economic growth to be approximately 5% in 2016, up from 4.5% in 2015, with the expansion expected to provide opportunities for sectors such as manufacturing and also increase the uptake of modern technology that would impact the performance of various industries, including printing.
The African Development Bank (AfDB) says the growth would defy challenges such as shocks, uncertain global conditions and plummeting oil prices. But despite this anticipated economic growth, the region’s printing industry could return a mixed performance in the future because of the challenges from the increasing traction of digital media, changes in printing processes and emerging concerns about environmental protection.
Morocco, South Africa, Senegal and Ethiopia have been singled out in the continent among market researchers as some of Africa’s printing ink markets with the strongest growth opportunities in coming years.
Various market analysts have estimated the printing ink industry in Morocco, Senegal and Ethiopia to grow at about 18.7% and 11.4%, respectively. The growth would be driven mostly be robust economic expansion in these countries and the existing stable political and investment trends. Consultancy firm KPMG says Morocco enjoys “politically stable environment with consumer inflation averaging 1.1% in the last five years.”
According to Oxford Business Group, Morocco’s promising growth opportunities for industries lies in “setting up of mechanisms for optimized collaboration between operators and public authorities, and action plans were defined to develop training, ease access to land and facilitate the process of setting up business in the country.”
Ethiopia on the other hand is growing at a double-digit rate with good performance by the manufacturing sector. At least 10 new sugar factories are under construction in Ethiopia, with increasing investments announced in the textile, leather, food and beverage and chemical industries in the next five years, according to the country’s trade department.
The projects are expected to contribute to macroeconomic growth and trigger expansion of packing industries, which analysts believe will drive the growth of Ethiopia’s printing industry.
Despite the anticipated good show by these markets, Africa’s printing industry is at the initial stages of analyzing the impact of the fast spreading use of the Internet on its performance.
Like the rest of the world, more and more people are now getting their news and ads through electronic media, reading online newspaper and magazine versions and using other Internet-related platforms that could impact on the region’s printing industry. For example, in South Africa, consulting firm PricewaterhouseCoopers (PwC) says in one of its recent market reports that the Internet access market is set to rise from $2.1 billion in 2014 to $5 billion in 2019, “far ahead of any other consumer spend category, making it the largest contribution to South Africa’s total entertainment and media revenues.”
PWC says “magazines and newspapers, which will show only moderate consumer growth, are segments that face strong competition from the Internet,” and predicts consumer revenue from books, magazines and newspapers will rise by a modest $86 million between 2014 and 2019.
“It is clear that consumers see no significant divide between digital and traditional media. What they want is more flexibility, freedom and convenience in when, where and how they interact,” says PwC.
According to PwC South Africa’s Vicki Myburgh, “affordable Internet access will also inhibit the revenue growth of various sectors as consumers use it to access free, ad-funded and lower-priced subscription-based versions of new and existing media services.”
However, the Printing Industries Federation of South Africa NPC, the country’s printing industry lobby, views the impact of Internet or information technology on printing ink business in the region as minimal and insists “print is here to stay.”
According to Doug Aldred, president Packaging and Narrow Web at Flint Group, Africa’s print media market “remains important and is expected to continue growing.”
Flint Group, which develops and markets conventional and UV printing inks, launched a new joint venture with Continental Printing Inks and Eagle Ink Systems in South Africa, an expression of confidence in the region’s packaging and print media market.
The Packaging Industry
The shift to digital media is likely to see producers and traders of printing inks in Africa relying more on the expanding packaging industry to boost their operations. Performance of Africa’s packaging industry is projected to grow substantially, becoming a crucial driver of anticipated new trends in the region’s printing industry.
Professional services firm Deloitte says Africa would soon “become a high growth region for the packaging industry, with demand being driven by increased markets for consumer products, burgeoning individual incomes, an expanding population of youthful consumers and growing domestic economies.”
The growth in demand is despite anticipated challenges that Africa’s packaging industry is likely to face from new emerging trends in the international consumer packaging market, according to Roy Campbell, partner and manufacturing industry: Forestry, Paper & Packaging Sector leader at Deloitte.
He says challenges such an increase in demand for premium packaging, the emergence of biodegradable plastics, increased use of multipacks and small packs and the need for sustainability and innovation could impact the continent’s packaging industry. Like in other international markets, printing ink companies in Africa know that the packaging industry is critical to their performance.
Market intelligence and consulting firm Ceresana says irrespective of what happens in the era of digital media, “goods still have to be packed and consumers need information about the product when they are holding the package.”
International printing and packaging ink firms such as Siegwerk and Flint Group are laying firm market foundations to expand in Africa as demand for their products gain traction in the market.
Siegwerk, a German manufacturer whose portfolio includes printing inks for packaging, newspapers, magazines and catalogs, says it hopes to strengthen its operations in South Africa and Nigeria, where it already has a presence.
Although Dirk Weissenfeldt, the company’s VP Business Units Paper & Board/Liquid Food Packaging, says the South Africa market for ink products “is generally flat with no volume growth due to increasing product safety and regulation demands,” Siegwerk still realizes that “there is a clear trend towards high quality inks.
“This supports Siegwerk’s strategy of offering high performance inks that provide superior product safety such as for food packaging,” said Weissenfeldt.
The company, which has blending centers in Johannesburg and Durban, currently is active in production and distribution of solvent- and water-based flexo for film and paper, ink systems for narrow web printing UV offset and conventional offset for packaging with a focus on low migration ink systems.
Weissenfeldt, however, warned of the possible impact of the weakening South African rand against major world currencies on the $93 million (Rs1.4 billion) ink (packaging only) market.
Flint Group according to Aldred, has, by acquiring Continental Printing Inks/Eagles Ink Systems, “built on our leading position in South Africa and to expand in other countries in sub-Saharan Africa.
“We are now in a stronger position to support our growing customer base in the region, having become the largest ink supplier in South Africa with the new joint venture,” said Aldred. “The print media market remains an important market in this region and the packaging and narrow web business is expected to continue growing.”
Aldred says the expected growth of consumer product companies in Africa is likely to trigger “growth of independent and global printers and converters,” and that Flint Group’s move into South Africa “was planned to support the growth of our existing customers and provide a local manufacturing platform for future entrants into the market.”
The African Development Bank (AfDB) says the growth would defy challenges such as shocks, uncertain global conditions and plummeting oil prices. But despite this anticipated economic growth, the region’s printing industry could return a mixed performance in the future because of the challenges from the increasing traction of digital media, changes in printing processes and emerging concerns about environmental protection.
Morocco, South Africa, Senegal and Ethiopia have been singled out in the continent among market researchers as some of Africa’s printing ink markets with the strongest growth opportunities in coming years.
Various market analysts have estimated the printing ink industry in Morocco, Senegal and Ethiopia to grow at about 18.7% and 11.4%, respectively. The growth would be driven mostly be robust economic expansion in these countries and the existing stable political and investment trends. Consultancy firm KPMG says Morocco enjoys “politically stable environment with consumer inflation averaging 1.1% in the last five years.”
According to Oxford Business Group, Morocco’s promising growth opportunities for industries lies in “setting up of mechanisms for optimized collaboration between operators and public authorities, and action plans were defined to develop training, ease access to land and facilitate the process of setting up business in the country.”
Ethiopia on the other hand is growing at a double-digit rate with good performance by the manufacturing sector. At least 10 new sugar factories are under construction in Ethiopia, with increasing investments announced in the textile, leather, food and beverage and chemical industries in the next five years, according to the country’s trade department.
The projects are expected to contribute to macroeconomic growth and trigger expansion of packing industries, which analysts believe will drive the growth of Ethiopia’s printing industry.
Despite the anticipated good show by these markets, Africa’s printing industry is at the initial stages of analyzing the impact of the fast spreading use of the Internet on its performance.
Like the rest of the world, more and more people are now getting their news and ads through electronic media, reading online newspaper and magazine versions and using other Internet-related platforms that could impact on the region’s printing industry. For example, in South Africa, consulting firm PricewaterhouseCoopers (PwC) says in one of its recent market reports that the Internet access market is set to rise from $2.1 billion in 2014 to $5 billion in 2019, “far ahead of any other consumer spend category, making it the largest contribution to South Africa’s total entertainment and media revenues.”
PWC says “magazines and newspapers, which will show only moderate consumer growth, are segments that face strong competition from the Internet,” and predicts consumer revenue from books, magazines and newspapers will rise by a modest $86 million between 2014 and 2019.
“It is clear that consumers see no significant divide between digital and traditional media. What they want is more flexibility, freedom and convenience in when, where and how they interact,” says PwC.
According to PwC South Africa’s Vicki Myburgh, “affordable Internet access will also inhibit the revenue growth of various sectors as consumers use it to access free, ad-funded and lower-priced subscription-based versions of new and existing media services.”
However, the Printing Industries Federation of South Africa NPC, the country’s printing industry lobby, views the impact of Internet or information technology on printing ink business in the region as minimal and insists “print is here to stay.”
According to Doug Aldred, president Packaging and Narrow Web at Flint Group, Africa’s print media market “remains important and is expected to continue growing.”
Flint Group, which develops and markets conventional and UV printing inks, launched a new joint venture with Continental Printing Inks and Eagle Ink Systems in South Africa, an expression of confidence in the region’s packaging and print media market.
The Packaging Industry
The shift to digital media is likely to see producers and traders of printing inks in Africa relying more on the expanding packaging industry to boost their operations. Performance of Africa’s packaging industry is projected to grow substantially, becoming a crucial driver of anticipated new trends in the region’s printing industry.
Professional services firm Deloitte says Africa would soon “become a high growth region for the packaging industry, with demand being driven by increased markets for consumer products, burgeoning individual incomes, an expanding population of youthful consumers and growing domestic economies.”
The growth in demand is despite anticipated challenges that Africa’s packaging industry is likely to face from new emerging trends in the international consumer packaging market, according to Roy Campbell, partner and manufacturing industry: Forestry, Paper & Packaging Sector leader at Deloitte.
He says challenges such an increase in demand for premium packaging, the emergence of biodegradable plastics, increased use of multipacks and small packs and the need for sustainability and innovation could impact the continent’s packaging industry. Like in other international markets, printing ink companies in Africa know that the packaging industry is critical to their performance.
Market intelligence and consulting firm Ceresana says irrespective of what happens in the era of digital media, “goods still have to be packed and consumers need information about the product when they are holding the package.”
International printing and packaging ink firms such as Siegwerk and Flint Group are laying firm market foundations to expand in Africa as demand for their products gain traction in the market.
Siegwerk, a German manufacturer whose portfolio includes printing inks for packaging, newspapers, magazines and catalogs, says it hopes to strengthen its operations in South Africa and Nigeria, where it already has a presence.
Although Dirk Weissenfeldt, the company’s VP Business Units Paper & Board/Liquid Food Packaging, says the South Africa market for ink products “is generally flat with no volume growth due to increasing product safety and regulation demands,” Siegwerk still realizes that “there is a clear trend towards high quality inks.
“This supports Siegwerk’s strategy of offering high performance inks that provide superior product safety such as for food packaging,” said Weissenfeldt.
The company, which has blending centers in Johannesburg and Durban, currently is active in production and distribution of solvent- and water-based flexo for film and paper, ink systems for narrow web printing UV offset and conventional offset for packaging with a focus on low migration ink systems.
Weissenfeldt, however, warned of the possible impact of the weakening South African rand against major world currencies on the $93 million (Rs1.4 billion) ink (packaging only) market.
Flint Group according to Aldred, has, by acquiring Continental Printing Inks/Eagles Ink Systems, “built on our leading position in South Africa and to expand in other countries in sub-Saharan Africa.
“We are now in a stronger position to support our growing customer base in the region, having become the largest ink supplier in South Africa with the new joint venture,” said Aldred. “The print media market remains an important market in this region and the packaging and narrow web business is expected to continue growing.”
Aldred says the expected growth of consumer product companies in Africa is likely to trigger “growth of independent and global printers and converters,” and that Flint Group’s move into South Africa “was planned to support the growth of our existing customers and provide a local manufacturing platform for future entrants into the market.”