The Asian ink market: driven by economic growth in China, India and other key countries, the Asia-Pacific region continues to grow at a fast pace, and is poised to become the largest region in terms of printing ink

Ink World, May, 2007 by David Savastano

The $14.5 billion printing ink market is roughly split evenly between North America, Europe and Asia-Pacific. While the North American and European sales have flattened out, the Asia-Pacific region continues to grow at a fast pace, and should soon become the largest region in terms of ink consumption, driven by economic growth in China, India and other key countries.

"The printing ink industry in Asia grew by about 6 percent to 7 percent in 2006 compared to 2005," said Ivan Cheng, sales manager, Asia for Flint Group. "China continues to lead the way with about 10 percent growth in the overall market. Other countries experiencing significant growth include Vietnam and Malaysia."

As a result, ink manufacturers reported solid growth in the region during the past year.

"Relative to 2005, Toyo Ink saw a greater than 10 percent rise in shipments to the Asia (South and Southeast) and China regions," said Aviv Haruta, general manager, public relations department, Toyo Ink Mfg. Co., Ltd. "Particularly striking was the increase in demand for specialized inks, such as UV inks."

"China and India maintained strong economic growth in 2006, and the Japanese economy continued its recovery," said Hisato Tanemura, group marketing director for Southeast Asia, Oceania and South Asia, Dainippon Ink & Chemicals (DIC). "Because of this, 2006 printing ink sales in the region were good, although our profit margins were squeezed by rapidly rising raw material costs."

"India and Pakistan have shown the best growth, with double-digit growth in the sheetfed, news and liquid ink areas," Mr. Tanemura added. "In China, sheetfed, web offset and packaging (liquid and UV offset) continued to have good results.

However, Mr. Tanemura added that due to a decrease in advertisement from the real estate industry as well as strong competition, news ink sales stagnated.

"China's GDP growth in 2006 was about 9 percent," Mr. Cheng noted. "Printing ink market growth trends slightly higher than GDP growth at about 10 percent. Again, pack aging leads the way with growth of about 12 percent." Mr. Cheng noted that packaging, conventional sheetfed offset and UV are particularly strong in China.

"We increased our sales volume of gravure inks, especially in India and Indonesia, where we showed double-digit increases," said Yuichiro Nishikawa, international operation division, Sakata Inx. "We started local full-scale production and sales in Vietnam in January 2007." He added that Sakata Inx plans to construct a second printing ink production factory in India.

"GDP in India increased in the fiscal year 2006 by 9 percent, and we estimate the printing ink industry will continue growing much more," Mr. Nishikawa said. "Sakata Inx India is strengthening our production system in reply to the market demand."

Ink Manufacturers' Presence in Asia-Pacific

With a population of more than 3.5 billion in the region as well as the growing export market, there is plenty of opportunity for the printing industry.

The growth of the printing industry in the Asia-Pacific region can be seen by the movement of major packaging printers into the region. These companies form a veritable "Who's Who" of the packaging industry, from Tetra Pak, SCA Packaging, Crown Cork & Seal and CCL Labels to flexible packaging leaders Alcan, Amcor, Huhtamaki and Sealed Air Cryovac, among others.

Much like the ink market, the $45 billion flexible packaging market is presently broken up into fairly even portions between North America, Europe and Asia-Pacific, with the Asia-Pacific market growing fastest and likely to be the largest region by 2010.

According to Paul Gaster, manager of flexible packaging for PCI Consulting, a UK-based consulting firm, Asia-Pacific accounts for $15 billion of the worldwide flexible packaging marketplace, and is growing at a 7 percent rate overall. China and India are exceeding that figure with 15 percent growth.

To meet this increasing demand, the largest ink manufacturers have a strong presence in the region. DIC, Flint Group, Toyo Ink, Sakata Inx, Siegwerk, Huber Group, T&K Toka and many other top international ink companies have operations throughout the Asia-Pacific region.

DIC, the world's largest ink manufacturer and Sun Chemical's parent company, has eight ink manufacturing sites in China under the DIC and Coates labels; two each in India and Thailand; and one in Indonesia, Malaysia, Vietnam, Taiwan, Sri Lanka, Philippines, Pakistan, Australia and New Zealand.

Mr. Tanemura said that DIC plans production rationalization and capacity expansion of liquid inks in India. At the same time, DIC is reorganizing operations in Malaysia, Australia and New Zealand.

"We are also seeking opportunities for mergers and acquisitions or joint ventures with local companies in sheetfed, liquid and pigments in China and India," Mr. Tanemura added. "To cope with the continuing rise in raw material and high energy prices, we are consolidating both purchasing and production activity throughout Asia. Furthermore, backward integration in production of pigment, varnish and offset ink in one place, now completed in Nantong, China, also is planned in India."