The Offset Ink Report

The Offset market has seen a slowdown as a result of the economy, but there is reason for optimism in 2003.

The offset ink market has continued to struggle against a harsh economic climate, but despite this, many in the industry are predicting that things will begin to pick up in 2003.

The offset ink industry has faced a serious downturn. The National Association of Printing Ink Manufacturers’ (NAPIM) 2002 State of the Industry Report reported declines in sales of 7.5 percent in the publication and commercial sector. In terms of volume, heatset inks fell 13.2 percent from the previous year, while litho no-heat dropped 11.5 percent in volume from 2001. However, early indications have shown that there has been some improvement in the second half of 2002.

Although both the heatset and sheetfed markets saw little or no growth, Tom Basore, executive director of the Web Offset Association, said there is growing optimism in the heatset market for recovery in 2003.

Mr. Basore noted that the publication segment continued to be negatively impacted by the slow economy due to cutbacks in advertising dollars while the general commercial segment has remained relatively strong.

In particular, heatset has faced challenges.

“Overall, the U.S. heatset ink market has continued to be soft throughout much of 2002 as the result of a weak domestic economy,” said Dave Mistretta, marketing manager, heatset, Sun Chemical Ink (GPI). “The current state of economic and political uncertainty continues to negatively impact some market segments more than others. Publication continues to feel the impact of reduced advertising on magazine page counts, despite the steady pace of overall advertising revenue. The retail market segment has demonstrated its continued resiliency, even during uncertain economic times.”

The sheetfed market has not had a good year in 2002, according to Les Watkins, director, sheetfed products, Sun Chemical Ink (GPI). “Industry reports indicate commercial printing is down, in large part due to a fall-off in business promotion printing,” Mr. Watkins said. “The label and folding carton segments have been holding their own, and we can expect them to grow at roughly the same rate as the economy.”

“Both heatset and sheetfed markets have still been affected by the slow economy,” said George Polasik, senior vice president, offset division, INX International Ink Company. “We have seen an improvement over 2001 in some areas but not all. The area that appears to have been least affected by the slow economy has been in the packaging markets. People still need to eat and the packaging market still needs to use eye-catching containers because of their competitive problems.”

One segment that is growing despite the slow economy is the radiation-curing markets. “The UV and EB market is growing for Flint Ink,” said Diane Parisi, technical director paste inks, Flint Ink.

New Technologies
As growth in the energy-curing segments continues, new technologies for UV and EB inks for the offset market are being developed. According to Dr. John Rooney, Sun Chemical vice president and vice president, technology, Sun Chemical Ink (GPI), “Sun Chemical pioneered the development of lithographic inks that print with the assistance of plain water as opposed to formulated fountain solutions. Products based on our 1994 patent continue to draw interest from a number of sheetfed printers. Our Hy-Bryte Max, a hybrid energy curable sheetfed ink, has enjoyed considerable success over the past two years. In addition, we have developed a range of waterless lithographic ink products including rapid-setting sheetfed inks, water-washable waterless inks and, more recently, waterless, water-washable energy curable inks.”

Sun Chemical has also developed a number of technologies that will increase productivity in the pressroom. “Sun Chemical continues to develop high-speed press technologies aimed at reducing printers’ ‘total cost of print’ by offering increased productivity and efficiencies within the pressroom,” said Mr. Mistretta. “The newest generation of products is designed to take costs out of the manufacturing process, and move much-needed profit dollars to the printer’s bottom line, allowing them to be more competitive in their respective markets.”

INX International Ink Company has also developed new products to improve efficiency. “We have launched the fastest setting sheetfed ink on today’s market with our new EcoPure line,” said Mr. Polasik. “We also continue to work on improving our existing products to better differentiate ourselves from our competitors. We plan to market other new products in 2003.”

“We will be launching a next generation series of ColorTrac for the sheetfed market as well,” said James Ramaker, vice president sales and marketing, web offset, INX International Ink Company.

Flint Ink has launched product lines for conventional UV for paper, board and synthetic stock as well as a new line of EB inks.

While there will continue to be interest in new ink types such as single fluid and waterless, Mr. Watkins believes the sheetfed market will continue to be dominated by the need for consistent inks with high performance standards that also offer wide operating latitude to the pressmen.

A Look To the Future
A focus on enhanced productivity and cost savings will continue to dominate the offset market.

“The heatset market will continue to be influenced primarily by the quest for enhanced productivity,” said Dr. Rooney. “Specifically, prepress workflows are being streamlined with the introduction of new computer-to-plate technologies which affect plate chemistries and their interactions with inks.

“Press run lengths are becoming shorter, placing a premium on rapid startups, minimal downtime and reduced waste,” Dr. Rooney added. “Sheetfed printing is under pressure from digital printing alternatives, and in many cases, digital technologies have merged with traditional lithographic printing to create hybrid equipment which requires new types of printing inks.”

“One of the more prevalent trends affecting the printing industry is the new focus on reducing overall costs within printers’ supply chain. Printers today need suppliers who have the resources and knowledge to help them produce the best products possible at the lowest possible total cost,” Mr. Mistretta said.

“The trend of product standardization in both markets will be strong in 2003,” said Andrew Matthews, director heatset product development, Flint Ink. “Further, old trends, such as consolidations and improving manufacturing efficiencies, will continue to be explored.”

“The future of the web offset market in the U.S. remains uncertain, as a result of the current political and economical environment,” Mr. Mistretta said. “Companies will continue to search for new technologies and refined processes that will give their businesses an edge within an increasingly competitive marketplace. Long-term players will continue their inward focus on cost reduction through efficiencies within their operations, with the help of companies like Sun Chemical,” he added.

Mr. Watkins said that sheetfed offset will probably continue to lose ground to flexo in the folding carton and label markets as the quality of flexographic printing improves and continues to offer some cost savings.

“There is still a need to develop inks that improve the pressroom performance and the appearance of the printing product,” Mr. Watkins said. “Inks must contribute to reductions in overall printed costs by shortening make-ready time and minimizing running waste. These savings often can be the difference between profit and loss for a printer.”

Continued consolidation in the industry will place more pressure on ink suppliers.

“The number of heatset customers as well as vendors will shrink as they continue consolidation efforts,” said Mr. Matthews. “Growth through acquisition will be the only way to grow.”

“With the continued consolidation of printers and the continued growth in digital and the Internet, all companies are working on improvements in efficiencies and on new products for the industry,” said Mr. Polasik.

A Silver Lining
Despite these predictions, many in the industry do see a light at the end of the tunnel.

“The economy will turn around, but it will not be the same for offset printer or suppliers as it was before the slowdown,” said Mr. Polasik.

Mr. Ramaker of INX predicts that the offset market will remain a mature market, with flat to limited growth except for specialty products.

Although the future remains uncertain, most ink suppliers and printing officials agree that a recovery is in sight.

“There is more of a question mark on the recovery, how strong it will be as compared to previous economic downturns,” said Mr. Basore.