Printing Ink

SIC 2893

Companies in this industry

Industry report:

This classification includes establishments primarily engaged in manufacturing printing ink, including gravure ink, screen process ink, and lithographic ink. Establishments primarily engaged in manufacturing writing ink and fluids are classified in SIC 2899: Chemicals and Chemical Preparations, Not Elsewhere Classified. Those establishments manufacturing drawing ink are classified in SIC 3952: Lead Pencils, Crayons, and Artists' Materials.

The printing ink industry, valued at almost $1.4 billion in 2008, is one of America's oldest, dating back to the pre-Revolutionary War days. After more than 200 years of similar operating procedures, there was little change in the structure of the industry entering the 1990s. However, the 1990s brought massive consolidation to the sector. Because the market for printing inks was mature and profits were low, the largest ink companies acquired smaller firms as a way to boost market share. By the 2000s, just four companies controlled more than half of the global printing ink market.

During the recession at the beginning of the 1990s, raw material prices stabilized considerably. Purchasing experts in the ink industry found only a few areas where upward price pressure could continue throughout 1990. The major factor affecting prices was the stable price of crude oil, from which more than 75 percent of the raw materials for ink was derived. The industry's membership sought to take full advantage of the relatively low raw material costs, resisting any price increases from raw materials suppliers unless they were fully justified. In some product areas, the companies were able to negotiate price reductions, which helped the industry hold the line on its own prices. Between 2000 and 2004, the cost of materials for the industry increased from almost $2.4 billion to $2.5 billion.

The National Association of Printing Ink Manufacturers (NAPIM)--the trade organization representing ink producers in the United States--reported that industry shipments were valued at $4.83 billion in 2005, up from $4.04 billion in 2002. Printing ink shipments had increased steadily throughout the late 1990s and early 2000s, before declining in 2001 and even further in 2002.

The printing ink industry is classified by ink type. In 2005, lithographic and offset printing ink shipments comprised the largest category, with shipments valued at $2.1 billion--44 percent of total shipments. With 15 percent of the total market, flexographic printing inks were the second-largest sector, with 2005 shipments of $766 million. Nonimpact digital ink shipments were more than $619 million (up from $247 million in 2002), for 12 percent of the total, while gravure printing inks shipments totaled $443 million, for 9 percent of the total. Letterpress printing inks were the smallest individual ink category, with approximately $116 million in shipments, accounting for 2 percent of the total. The remaining percentage of the market was comprised of nonclassified printing inks.

The printing ink industry has made efforts to reduce the environmental burden of its products. Before passage of the Clean Air Act, printing ink manufacturers were developing water-based ink systems to replace inks containing volatile organic compounds. Many years before the first "CONNEG Law" was passed to reduce heavy metals in packaging, the printing ink industry had been reducing the use of lead-bearing pigments in packaging inks.

The 1994 Vegetable Ink Printing Act of Congress exerted a powerful influence on the industry. The bill mandated that printers with government contracts use vegetable oil-based inks instead of volatile petroleum-based inks whenever possible. The main concerns were due to the hazardous effects of using crude oil as the ink base, as was done for most of the history of printing inks. Emissions from volatile organic compounds (VOCs) and emissions of hazardous air pollutants (HAPs) had to be controlled. Printing inks also had to be developed to make the de-inking and recycling of paper easier. Printers wanted inks that stuck to paper, and recyclers wanted inks that could be easily removed.

Growth in vegetable-based inks leveled off in 1996 as most of the users with environmental concerns switched to newer inks. Another increase in vegetable- and water-based inks will only be likely if environmental pressure increases again.

Further change in the industry occurred in the late 1990s as the pace of consolidation accelerated. In 1998, Flint Ink of Ann Arbor, Michigan, acquired Mander plc for $167 million. Flint continued its buying spree in 1999, with its acquisition of Sacramento, California-based The Ink Co. Flint--the second-largest ink producer in the world--made the purchases to remain competitive with the industry's global leader, Dainippon Ink & Chemical of Japan. Dainippon's U.S. subsidiary, Sun Chemical Corp., was the second-largest American ink producer behind Flint. In an effort to gain access to China's printing industry, which was growing at a pace of roughly 10 percent per year, Flint created an ink manufacturing joint venture with Graphic Tech, its Asian distributor, in 2003. Renamed as the Flint Group, the company was still the second largest industry player during the mid-2000s, with 2005 sales of $2.7 billion and 7,000 employees. Sun Chemical, the largest ink-producer in the world, posted 2004 sales of approximately $4 billion and employed 12,000 workers.

In 2004, some 527 establishments were involved in the production of printing ink, and roughly 250 of these were larger companies with more than 20 employees.

Current Conditions

According to industry statistics, an estimated 856 establishments were engaged in the production of printing ink valued at $1.37 billion in 2008 with industry-wide employment of 13,467 workers. Most manufacturers of printing ink were housed in California and Illinois.

Printing ink was produced in 751 facilities that employed 12,234 people. Shipments from this sector were valued at $1.29 billion in 2008. Lithographic ink was produced at 46 facilities employing 442, with shipments valued at $32.1 million. Screen process ink was produced in 20 facilities generating $23.3 million in revenue, while letterpress or offset ink was produced in 25 facilities with shipments valued at $19.1 million. Duplicating and gravure ink producers each operated 6 facilities with sales of $3.3 million and $1.3 million, respectively.

Ink manufacturers not only had to deal with the sluggish economy, but also increased raw material prices and energy and transportation costs were rising to levels not seen in decades. "In that kind of environment, Sun Chemical's focus was on helping our customers grow their businesses and succeed," Felipe Mellado, chief marketing officer of Sun Chemical told Ink World in December 2008, adding that "That means working for our customers everyday to further improve our performance on the essentials of our business as reliable, on time delivery, consistent product quality and investment in research and development." Despite the downturn in the economy and volatile price pressures, Sun Chemical still managed to introduce new products to its customers in 2008; however, some of the price increases eventually had to be passed on to customers.

Industry Leaders

Industry leader, DIC, formerly Dainippon Ink & Chemical's U.S. subsidiary, Sun Chemical Corp. reported worldwide sales of $4 billion, with North American revenues reaching an estimated $1.8 billion, and 11,000 employees. The company operated over 300 manufacturing and service facilities worldwide. The Flint Group fell to the number two position with worldwide sales of $3.5 billion, 7,800 employees, and North American revenues of $1 billion. Industry consolidation continued in 2008 with the Flint Group completing three acquisitions, of which the largest was the packaging inks business from Siegwerk in Australia and New Zealand. Additional top performing ink producers were INX International Ink Co. located in Schaumburg, Illinois, with sales of $325 million; Chemical Research/Technology or CR/T, a division of Quad/Graphics of Hartford, Wisconsin, with sales of $235 million; and Siegwerk NAFTA of Des Moines, Iowa, with $224 million in sales.

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