Asia Pacific ink market analysis

For printing ink manufacturers, the Asia-Pacific region dominated by China and India has great opportunities for development.

The printing ink market in the Asia-Pacific region has gone through a very strong year and will inevitably continue to expand. According to the "ink world" estimates, the printing ink sales in the region have exceeded the 4 billion US dollars mark, equivalent to the total amount of Europe and North America. Moreover, according to the current pace of development, the Asia-Pacific region will become the world's largest ink production base in the next five years. The significant increase in ink production was mainly due to the rapid expansion of the printing market in China, India, Vietnam, Indonesia and other countries in the region. Of course, Japan and Australia are also very important markets.

Behind the development of the market, it is the M&A wave that occurred in the ink industry in early 2005. Under the leadership of CVC Private Equity Fund, Flint Ink and Athos Printing Technology merged into the Flint Group. This integration has had a significant impact on the Asia-Pacific market. At the same time, the Flint Group also continued its progress in China. The acquisition of Siegwerk inks for the SICPA packaging ink division has increased its market position in China, India and Australia.

The biggest impact on the market is the acquisition of Micro Ink Company by the Huber Group, which is India's leading ink producer.

With these changes, the Asia Pacific ink industry will be very active in the coming years.

Overall performance last year

Ink printers in the Asia-Pacific region were generally satisfied with the market development in 2005, although the increase in raw material prices has given this optimism a slight discount.

Henry Leong, president of Flint Group Asia, said, “In Asia, the growth rate of the printing market in Asia was about 6%. For the entire ink industry, last year was very difficult, mainly because of the sharp rise in raw material prices. Excessive production capacity in the printing market has also made it extremely difficult to raise the price of products."

Leong also mentioned that China's economic growth rate reached 10-12% last year. At the same time, as investment in foreign investment has increased significantly, Vietnam is rapidly growing into a market worthy of expectation.

According to Hisato Tanemura, director of marketing for DIC inks in Southeast Asia, Oceania and South Asia, “With the rapid economic growth in China and India in 2005 and the recovery of the Japanese economy, the overall performance of printing ink sales in the region has been generally satisfactory. However, sales The profits have been eroded by soaring crude oil prices."

Tanemura mentioned that India and Pakistan have the highest growth rates, while China and Indonesia also have above-average growth rates.

Tanemura also stated that in recent years, the economies of China, India, and Indonesia have continued to strengthen, while at the same time the Japanese economy has been stalled. In 2005, the Japanese economy achieved growth, and due to the recovery of the Japanese economy, especially the development of real estate, electricity, and automation industries, the demand for printing and printing inks has increased.

Saichi Inagaki's general manager of global business Toshiyuki Sawada said: "Japan's economic strength is still strong. Under the current circumstances, the development of the printing ink industry continues to be flat. The decrease in sales prices and the rise in raw material costs due to the price of crude oil to the ink The company has brought more pressure."

Sawada added: "In the Japanese market, our overall sales increased by 2.6% over the previous year due to the increase in sales of newsprint inks and gravure inks."

Sakata Ink has increased its production capacity, including two new factories in China, India's offset ink factory, and a liquid ink factory in Ho Chi Minh City, Vietnam.

Sawada said, “In Asia, our sales of gravure inks have increased. In addition, our offset inks have been put into production, which will also help sales growth. In China, our liquid inks have been put into production in Shanghai. Offset printing inks are also put into production on a trade name, and have contributed to sales growth.At the same time, we have also strengthened our sales efforts in Indonesia, Malaysia and Vietnam. We plan to begin production of liquid inks in Vietnam by the end of this year. Due to the sale of gravure inks Intensified and the production of offset printing inks, our sales growth in the Indian market was the highest in the past year compared with other countries."

China

The improvement of living standards and the redeployment of production bases in other countries have greatly stimulated China’s development and have made it a core area for economic development.

Leong mentioned that "China's GDP growth rate reached 8.5% in 2005 and is expected to be around 7 to 8% this year. The Chinese government is monitoring very cautiously to avoid overheating."

Because GDP is very strong, and the economic prosperity will inevitably bring about the development of the printing market, this has also led to the growth of printing ink sales. Toyo Ink specifically mentioned that since 1999, China's printing market has maintained an annual growth rate of more than 10% under the stimulation of packaging and export of books. In order to meet the needs of the market, the ink industry has also developed. Sawada estimates that the amount of ink used in 2005 will reach 300,000 tons and will continue to grow.

China's ink industry includes multinational and local manufacturers, including large multinational ink companies such as Toyo, DIC, Toka, Sakata and Flint inks, as well as some small private factories.

China's largest ink manufacturer, Tianjin Toyo Ink Co., Ltd., is a joint venture between Toyo Ink Group and Tianjin Ink Corporation. Its annual production of offset and newsprint inks reached 12,000 tons. Ranked second is Hangzhou Hanghua Ink Co., Ltd., which is a joint venture company of Toka Ink, Hangzhou Chemical Holdings Group and Bank of China Zhejiang Branch. Its strengths are liquids, offset printing and UV inks. Taiyuan Gao's inks and Shanghai DIC inks are among the largest ink manufacturers in China. They are all part of the DIC Group. Shanghai Peony Printing Ink is China's largest local ink manufacturer.

Industry insiders in the ink industry have seen tremendous space for development in China.

Leong said: "It is expected that the growth rate of China's printing ink market will be about 10% this year. The first thing is packaging ink, which is expected to reach a growth rate of 12 to 14%."

Tanemura said: "With the rapid growth of China's overall economy in 2005, the development of sheetfed and packaging inks, especially liquid and UV offset printing inks, is as usual." He also added that packaging inks, especially ordinary offset printing, UV Offset and gravure have performed quite well.

However, there are also some factors that will affect the development of the industry. Both Leong and Tanemura expressed concern about the decline in real estate advertising volume. Tanemura mentioned that due to monetary policy tightening, especially for the real estate industry, the local newspaper has reduced the number of advertisement pages, which has also affected the sales of news newspaper ink.

Leong said, “The news newspaper printing market was affected for the first time in many years by the reduction of advertising revenue. Many news newspapers provided pictures for real estate sales. Now the government has adopted new asset tax policies to limit the active real estate market, thus reducing Speculation. Moreover, new restrictive policies for loans have also made it more difficult to apply for loans."

India

India still maintains economic growth. With more than 1.1 billion people and a gradual increase in living and cultural levels, the demand for packaging and print media is very large. According to "Ink World" estimates, since 2000, India's domestic ink sales have reached double-digit annual growth rate, already exceeded 330 million US dollars.

India's domestic printing and printing inks market performed well in 2005. Tanemura specifically mentioned that the entire industry has witnessed double-digit growth rates in the sheet-fed, newspaper, and liquid ink markets.

India’s main ink manufacturer is Micro Ink, which reportedly had sales of about US$240 million in 2005, slightly more than half of the total domestic market. The rapid development of Micro Ink threatens the status of Gao's ink, which belongs to DIC/Sun Chemical Group and is India's largest ink producer. At the same time, Sakata Ink and Flint Group have also occupied a place in the market as an international ink manufacturer.

Damian Johnson, president of the Indian/Pacific region of the Flint Group, mentioned that “India is a gem that is emerging and it has maintained a growth rate of more than 8%. The news newspaper market is constantly pouring fresh blood; demand in the domestic and export markets continues to grow. Due to cultural changes, the conversion from semi-bulk packaging to retail packaging has increased the growth rate of the packaging market by more than 15%. Unlike other parts of Asia, India's ink market growth is entirely due to domestic demand rather than exports. Supported. Every day is facing new risks, multinational companies are increasing investment, rather than the industry integration as suppliers."

Johnson added, “In India, the growth rate of the packaging market is the highest, exceeding 15%. Followed by news newspaper ink, more than 10%. The needs of the domestic market, the investment in the packaging industry and stationery and The expansion of demand for consumer goods is a positive factor for the growth of the ink market. The development of sheetfed and publishing printing markets will be consistent with the pace of economic development.”

Sakata Ink (India) Corporation took note of this market opportunity and started production of news newspapers and business offset inks last year.

Sawada said, "India's GDP growth rate reached 8% in fiscal 2005. Based on the continued economic growth, we expect the printing ink industry will continue to grow at a faster rate."

Australia and New Zealand

The leaders of the ink market in Australia and New Zealand are multinational ink manufacturers, occupying about 90% of its market, among which Flint Group and Gao's ink are the top ones. The Flint Group is the largest ink company in Australia and New Zealand. Johnson reported comprehensively on the market in 2005.

Johnson said that "the characteristics of 2005 are that the performance of the two countries is not the same, both are experiencing tremendous competitive pressure, and are facing the ever-changing raw material costs, due to the shift of unidirectional Australia and Asia, New Zealand's printing market. We have continued to shrink. We have also seen significant integration in the printing and packaging industries. It seems that New Zealand has experienced the pressure of globalization faster than other countries."

Johnson went on to say, "Australia's performance is different, and the publishing print and news newspaper market tends to grow. Due to factors such as competition from overseas, hurricanes and floods, integration of printing companies, and optimism for economic growth in recent years. Discarded, the packaging and printing market showed signs of slowing growth. The increase in the prices of raw materials and crude oil has already caused cost pressures."

Tanemura mentioned that due to the strong performance of the Australian dollar in 2005, the Australian economy was not affected by high oil prices. He also pointed out that the strong currency exchange rate also made imported ink from Asia/Europe cheaper.

Ink manufacturers in Australia and New Zealand are paying close attention to the potential impact on other Asia Pacific markets.

Johnson added, "In Australia and New Zealand, the impact from Asia has attracted more attention. When some packaging printing businesses have moved from Australia to Asia, importing inks from Asia will be economically or qualitatively relevant for the market. It doesn’t work to consider.”

Key development trends

When we discuss important development trends in the Asia Pacific region, environmental issues are undoubtedly the most important. Tanemura specifically pointed out that environmental regulations are becoming more and more stringent, and because of this, many companies, especially export-oriented companies, are environmentally friendly inks, such as toluene-free/butanone-free liquid oils.