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Packaging Ink Market

Issue Time:2013-08-16

Packaging Ink Market

The market for packaging inks remains strong, with water-based, solvent-based, sheetfed and UV/EB inks all having their areas of growth.

By David Savastano

The packaging field remains the strongest area of growth in printing, and the numbers of consultants and trade associations appear to back this up. For example, in its report, The Future of Packaging in North America to 2017, Smithers Pira estimates that the North American packaging industry had sales of $169.1 billion in 2012, with an estimated growth to $186 billion by 2017.

In terms of segments, the Flexible Packaging Association (FPA) estimates in its FPA Flexible Packaging Industry Segment Profile Analysis that the U.S. flexible packaging market was $26.7 billion in 2012. By contrast, the FPA reported that 2001 flexible packaging sales in the U.S. were $19.5 billion, or a nearly 37%
?growth rate during the past 11 years.

For corrugated printing, the Association of Independent Corrugated Converters puts corrugated packaging sales at $21 billion for 2012. On the folding carton side, the Paperboard Packaging Council estimates North American sales at $8.8 billion, with an average annual growth rate of 2.4% in sales through 2016.

PCI Films Consulting calculates the overall global flexible packaging market to be approximately $80 billion.

In terms of printing ink, in its 2013 State of the Industry Report, the National Association of Printing Ink Manufacturers (NAPIM) estimated the U.S. liquid ink market to be approximately $1 billion in 2012, with more than two-thirds being flexo ink sales.

In other words, packaging continues to be a major business, and for the most part, packaging ink manufacturers are seeing growth in their business.

Felipe Mellado, chief marketing officer, Sun Chemical, said that Sun Chemical has seen moderate growth in 2012 and similar growth in 2013 in the packaging market.

“Sun Chemical will continue to see significant growth in the flexible packaging segment,” Mr. Mellado added. “The packaging market faces different challenges than other market segments, such as migration, the push toward smaller package size, recyclability and other efforts to reduce the impact of packaging on the environment, but these challenges are great opportunities for growth at Sun Chemical. We’re working with brand owners and major packaging groups to provide them with solutions for specialized packaging for the future.”

“The North American flexible packaging volumes remained flat to slightly up compared to 2011, which could be characterized as resilient in the face of decreasing GDP and consumer confidence as 2012 closed,”
?said Deanna Whelan, global marketing manager, packaging and narrow web at Flint Group. “With raw material pricing coming back in line and with the economic headwinds subsiding, we expect growth in 2013 more in line with generally accepted CAGRs for this segment. The North American paper and board segment was flat to slightly down compared to 2011 for the same reasons but with the added complication of a growing consumer preference for the flexible form factor.”

Mark Hill, vice president of R&D for INX International Ink Co., said that packaging was very strong overall in 2012, particularly on the food side.

“Food packaging was especially strong with increased activity in that segment, and it has carried over into the first quarter this year with positive results,” Mr. Hill said. “The remaining markets, however, posted flat results or showed slight declines.”

“With improvement in the overall economy, printers are busier and their backlogs are improving,”
?said Daryl Collins, vice president of sales and marketing for Wikoff Color. “They are using existing capacity to fill demand, but we do not see capital investment in new presses picking up steam as yet. Our best growth this year came in the label and flexible packaging markets.”

“The packaging business is growing and is strong in the U.S.,”
?said John Copeland, president and COO, Toyo Ink America, LLC. “Globally there is growth in the packaging arena and many opportunities. A number of third world countries are in the initial phases of transformation from non-packaged food to packaged products. That’s the good news.”

“It has been steady to slight growth,”
?said Rob Callif, vice president, BCM Inks.

Key Growth Opportunities

Packaging encompasses a wide range of products, from foods to electronics and much more. Not surprisingly, ink manufacturers see certain products growing faster than others. Ms. Whelan noted that flexible packaging and labels are strong growth areas.

“The converted flexible packaging segment is attractive and growing,”?Ms. Whelan said. “Within flexible packaging, lamination structures that offer improved protection and shelf life will grow above rates associated with the main segment. Label markets like shrink, IML and heat transfer (wide and narrow web) are also estimated to grow at attractive rates.”

Mr. Copeland also sees flexible packaging as a strong growth market.

“Although relatively small at this moment, more pouch printing will make inroads into the folding carton markets,”
?Mr. Copeland added. “More companies are looking for innovation in packaging, and flexible packaging offers a variety of interesting options.”

Mr. Hillbelieves that food packaging offers the best opportunities.

“I think the biggest growth market will continue to be food packaging,” Mr. Hill said. “Paper and paperboard packaging are stable in certain markets, but plastic packaging is trending upwards at a much faster rate. We are seeing customers investing in equipment for the flexible packaging markets that were not players in that segment previously.”

“We feel the graphic corrugated market and digital print market offer tremendous growth opportunities due to the growing interest in brand color management and short runs,” Mr. Callif said.

“Overall, we are seeing an increased focus on the various regulatory legislations worldwide that are driven by large CPGs, such as Nestle and the Swiss Ordinance adoption,”
?said Tony Renzi, vice president, product management packaging, North American Inks, Sun Chemical.

“In the near term, we expect continued growth in the label, flexible packaging, inkjet and export markets,” Mr. Collins said.

Raw Materials

The ink industry has been heavily impacted by rising raw material costs and supply concerns in recent years, but the past year has seen a stabilization in these areas, albeit at a higher level than before.

“In general, raw material costs have stabilized,”?Ben Price, director of purchasing for Wikoff Color, said. “Throughout 2010 and 2011, Wikoff Color’s raw material costs increased drastically, and supply issues were numerous during this period. There were shortages of titanium dioxide, nitrocellulose and carbazole violet, to name a few. Rosin resin prices were another significant concern during this time. In late 2011, prices for most of our raw materials peaked, and we have experienced moderate price decreases throughout 2012 and into early 2013. Supply is not a concern for the majority of our raw materials at this time.”

“For the most part, the raw materials have stabilized,” Mr. Callif said. “However, there is continued consolidation within the supplier market, which will affect price and supply.”

“In general, at Sun Chemical we see a continuation of the current moderation trend in the raw materials market this year,”
?said Ed Pruitt, chief procurement officer, Sun Chemical. “Although we have not recently experienced the widespread shortages and allocations that plagued the industry two years ago, the raw material supply chain is a continuing concern to Sun Chemical. A sharp uptick in demand from the emerging markets or developed economies could quickly put products like titanium dioxide, nitrocellulose, carbon black and some pigments in very tight inventory positions. We also need to be mindful of the potential impact of global weather conditions on such raw materials as gum rosin, ethanol and vegetable oils.”

“There has been some slowing to the rise in raw material costs, but in general the trend in still going up,” Mr. Hill said. “The price of oil and a tight intermediate supply of raw materials are two reasons for the price instability, and price fluctuations will likely continue this year.”

Ms. Whelan said that 2012 appeared more stable, but costs did continue upward at a slower rate and continue to work their way through the supply chain.

“We do expect to see residual cost increases along with some raw material increases in 2013,” Ms. Whelan said. “And, of course, increasing transportation and energy costs will always face us. Acrylic-based price increases that affect water-based inks are starting to surface once again.”

“Raw material supplies continue to be a major concern,” Mr. Copeland said. “Pricing has been somewhat more stable this past year, but is still not at a comfortable level. In recent years various suppliers have discontinued products, manufacturing sites and changed strategies, leaving the ink industry scrambling for specific products from time to time.”

New Technologies

To meet the needs of consumer goods companies and packaging printers, ink manufacturers have developed a number of interesting technologies.

“We have developed UV/EB inks to help customers address migration issues in food packaging, and flexographic inks for high speed printing presses,” Mr. Hill said.
"Customers that print packaging for food or pharmaceutical companies are more interested in low odor and low migration inks,” Dr. Don Duncan, director of R&D at Wikoff Color, said. “Wikoff continues to develop new products to address these needs.”

“We believe digital technologies will continue to grow at a rapid pace,” Mr. Copeland said. “This will drive new ink and equipment developments. Our line of high sensitive curing inks have been performing very successfully in the commercial print markets.This has been very encouraging news for Toyo Ink America.”

“Sustainability continues to be at the forefront for us and our customers,” Mr. Callif said. “We developed a flexographic black ink from post consumer recyclable inkjet cartridges called PCR Black.”

Ms. Whelan said that Flint Group has a number of new offerings for packaging. For wide web packaging applications, FlexiStar BRC, solvent-based ink for wide web flexible packaging is the first solvent-based ink to receive NAPIM BRC certification; VarioLam RT is a system for retortable structures; FlexiTech Shrink U and PluriTech Shrink U are universal shrink systems for flexo and gravure, respectively.

For narrow web tag and label applications, EkoCure, UV inks for narrow web tag and label applications are the first flexo and screen inks designed for printing with UV LED lamp technology. Flint Group also has developed Flexocure ANCORA, high quality, UV flexo, low migration inks; Flex2Screen, which provides the ability to convert UV flexo inks to UV rotary screen inks; and CombiScreen silicone-free UV rotary screen inks.

Mr. Renzi noted a number of new packaging inks from Sun Chemical, including SunSpectro Sunsharp solvent-based inks for high-speed, wide web flexo presses of bread bags and frozen food packaging; SunSpectro Sunsharp HR solvent-based inks for use with conventional and high-performance printing plates for flexographic printing on polyethylene film; and SunStrato SB Velocity DPT-285 lamination links for printing on polypropylene and polyethylene.
Outside of inks, Sun Chemical has developed SunGraphics high definition flexographic plate technology, with Esko HD software and CDI high resolution imaging; SunBar Oxygen barrier coatings designed to enable lightweighting of packaging by removing the metal foil and one layer of adhesive from packaging, as well as offering improved laminate flexibility; SunScent coatings, developed in partnership with ScentSational Technologies; and for the corrugated market, SunGraphics SunLite In-Position Plates.

Solvent-Based, Water-Based and UV Inks

Packaging ink covers a wide range of inks, and the type of packaging ink used depends upon the packaging. Typically, solvent-based flexo and gravure inks are used in flexible packaging, as water-based inks are difficult to dry on plastic substrates. Water-based flexo inks are found on corrugated and narrow web packages. Sheetfed inks are used on folding cartons.
?Meanwhile, UV-based inks are used throughout the packaging segment.

Mr. Renzi noted that environmental advantages are driving interest in water-based inks, while solvent- and UV/EB-based inks have some specific performance advantages.

“For specific product lines, there is growing interest for water-based inks, especially with regard to high quality process printing for pre-print corrugated,”
?Mr. Renzi said. “The use of water-based systems continue to be of interest in an effort to reduce waste and emissions. We’re also seeing some renewed interest in water-based inks for high performance laminations and one part systems for outdoor applications.

“As printers continue to push toward higher press speeds, we’re also seeing increased interest in solvent-based inks to deliver high quality print results with improved speeds and efficiencies,” Mr. Renzi reported. “There is increasing interest in specialty inks (metallic, color shifting) as well as the use of HD plate technology in order to create a high quality, differentiated package. We are seeing growing interest in our UV curing/energy curing offerings for the packaging market and applications, especially EC products where product resistance performance is a key criteria. There is also growing interest in EB lamination in combination with EC flexo printing inks.”

Mr. Callif sees growth in UV varnish, and sees opportunities ahead for UV LED.

“There has been a growing interest in UV varnish,” Mr. Callif said. “We believe the next trend will be UV LED.”

Mr. Collins noted that EB
?curing appears to be picking up interest among food packagers.

“Due to concerns of using UV inks with food packaging, we see renewed interest in EB curing inks vs. UV inks for food packaging,” Mr. Collins said.

“Some of the more interesting trends are in the area of energy curable inks for the label markets,” Mr. Copeland said. “We see interest in UV, electron beam and LED technologies. There is also continued interest in solvent-based inks due to performance qualities and new and improved solvent reclamation systems.”

Ms. Whelan said that energy curing has enjoyed growth in recent years.

“In the converted flexible packaging segment, we are seeing a renewed interest in water-based inks for shrink sleeve and lamination,” Ms. Whelan said. “At the same time, energy cure processes, especially EB, for film substrates continues its steady foray into flexible packaging, but it’s potentially limited by capital investment required.

“In the narrow web tag and label market, the trend continues moving toward UV curable ink systems versus water-based,”
?added Ms. Whelan. “The use of UV curable inks in the packaging markets continues to grow - especially with the introduction of low migration inks that support current global and regional regulations. We also see an increasing interest in UV LED curing technologies - this is a good move for printers who have a focus on economical and ecological sustainability.”

“I don’t see any specific trends, but all ink types have a firm grasp on certain markets,” Mr. Hill concluded. “Solvent has a hold on plastic, whereas water is being used for paper and paperboard, corrugated and labels, and UV is in use across several markets. The markets that have adopted certain ink types appear to be sticking to those technologies more often than not.”