The 2012 North American Top 20 Report

In recent years, the North American printing ink industry has faced a wave of challenges. Every ink manufacturer has watched raw material prices increase dramatically, beginning with soaring oil prices. Even when oil costs stabilized and declined, prices on other key ingredients were driven upward due to a wide variety of factors.

Meanwhile, supply of certain raw materials has become erratic, with companies exiting markets, shuttering capacity or redirecting their products to more lucrative business segments.

The global recession heavily affected printing, particularly on the publication/commercial side, and ink manufacturers felt the impact. Even a growth area such as inkjet was hit by the recession, as credit to invest in new equipment tightened.

For the most part, ink manufacturers we spoke with said that 2011 saw gradual improvement, as the economy enjoyed some growth and raw material costs stabilized to a certain extent.

Ink sales have not recovered to pre-recession levels, though, and in the case of heatset and news inks, may never get back to those levels. Meanwhile, margins suffered as ink companies could not get increases through to match what they were receiving from their suppliers. Still, there was some improvement all around, and ink industry leaders we spoke with have a cautious optimism heading into the rest of 2012.

Their optimism is tempered by the real concern over raw materials, particularly those ingredients derived from crude oil. Due to instability in the Middle East, oil prices are on the rise again, moving from approximately $80 a barrel in August 2011 to $108 a barrel in late February. That kind of increase will impact everything from raw materials to transportation costs.

It is impossible to forecast what the future holds for raw materials, and as a result, for the ink industry. Ink manufacturers are doing all they can to secure supply, reduce costs and develop new products that can utilize materials that are more readily available. For ink industry leaders, 2012 is likely to again be filled with numerous challenges to overcome.