Datetime：2016-6-6 15:53:13 Visit：3363
The top Chinese 20 companies produced approximately 377,000 tons of ink in 2014, about half of the total ink output in China. Entering 2015, the slow growth of China’s economy affected the performance of the whole ink industry, reflected in the interim reports of several public ink companies.
For example, Yip’s Chemical, the largest ink producer in China, declared that its total sales of food packaging inks and offset printing inks decreased by 10% because of lagging market demand in the first six months of 2015. Suzhou Kingswood Printing Ink, who was among top 10 largest ink producers in China, also reported a reduction of 2.72% from its ink revenue in the first half of 2015.
Although many major ink companies in China are subsidiary companies or joint ventures of foreign enterprises, the overall weakness of the market is obvious, and reflected in their parent companies’ interim reports. DIC Corporation said its sales in the first half of 2015 were down in all categories in China, as slowing economic growth depressed demand. But overall sales for DIC in the Asia-Pacific region, excluding Japan, were still positive because of the growth in the categories of gravure inks and news inks in Southeast Asia.
Toyo Ink, another major Japanese ink producer in China, also reported an operation profit decrease of 13.1% in the first half of 2015FY(from April 1-Sept. 30) over the same period of 2014 in the Asia-Pacific region (excluding Japan).
Another indicator showing a soft ink market in China is that the import of printing ink in the first six months decreased by 18.3% in value. On the contrary, the export of ink grew by 6.7%, meaning some ink producers in China are counting on foreign markets to release their production capacity.
Environmental Pressure Creates New Opportunities for Flexo Inks
The air pollution in China has been even more serious since China entered the winter in 2015, with a PM2.5 index in major cities, such as Beijing, reaching the range of pollution frequently and leading the Chinese government to take every necessary mitigation measure possible.
One of the key measures is to impose fees on the emission of volatile organic compounds (VOCs), a source of air pollution, into the air. As a result, Beijing has become the first city in China to impose fees on the manufacturers of furniture, petrochemicals, automobiles and electronics in Beijing for emitting VOCs.
The new regulation has been put into effect since Oct. 1, 2015 in Beijing, and polluters will be charged 10 yuan per kg of discharged gas if their VOC emissions do not exceed 50% of the city’s limit, and will be charged 20 yuan per kg if the company’s emissions are higher than half of the limit but do not exceed the standards. Polluters whose VOCs emissions pass the limits will pay 40 yuan per kg.
Packaging and printing as well as production of ink and similar products are clearly listed among the 17 industrial categories that are covered by the new regulation. Complying with the new policy of the central government, Shanghai has also imposed fees to VOC emitters since Dec. 17, and it is estimated that more and more cities and provinces will follow suit, which will put heavier pressures to the operations of ink companies who have already struggled to maintain their current profit level.
However, this new challenge also provides a precious opportunity for Chinese printing companies to speed up adoption and development of environmentally friendly printing technologies and environmentally friendly printing materials. Flexo printing, which mainly uses water-based and UV inks, will be one of them in China.
Although flexo printing has existed in the market for many years, it is still staying at its primary growing phase, with less than 10% of the overall print market. This is much lower than its market share in western countries. One reason is that Chinese packaging companies do not have enough motivation to adopt flexo printing, especially for the production of flexible plastic packaging.
Currently, flexo printing is mainly applied to paper materials in China, and offset printing is still dominating China’s print market, with close to 50% share.
Besides environmental advantages, flexo printing for packaging is safer for food and medical products. Although flexo printing used on flexible packaging is still relatively rare in China, some large packaging companies, such as Xingtai Beiren, Shanghai Zidan and Zhejiang Changhai, have begun to add flexo printing to their product offerings for their customers.
The other limitation facing flexo printing’s development in China is the high price of flexo printing materials, including flexo printing inks and flexo printing plates. Seeing the potential in these niche markets, some Chinese domestic companies, such as Lucky Huaguang Graphics and Amsky, launched flexo printing plate production machines into the market in the past two years.
Still, a large part of the demand in this market segment is satisfied by imported products. It is estimated that the new regulation of imposition of VOC emission fees will be a catalyst to accelerate flexo printing materials’ development in China in the next several years. Toyo Ink, which has multiple ink manufacturers in China, put the development of water-based gravure and flexo ink into its priority tasks for improving its business performance in the overseas markets, in which China is a major player.
Compared with the development of flexo printing materials, flexo printing machines’ development enjoyed a much faster speed. Many flexo printing machines installed in China are manufactured by domestic companies. Besides, in 2014 alone, China exported 1,100 flexo printing machines, compared with the import of 53 flexo printing machines, but the total value of the imported flexo printing machines is only around $30 million, compared with a much higher value of $79 million for the exported machines. Many companies have been attracted to enter flexo printing machine production because of its low entry barrier, which in return, drives the fast development of the flexo printing machine segment in China.
In conclusion, it is foreseeable that flexo printing will develop faster than some other printing technologies in China in the near future. The companies that can provide high quality, low cost flexo printing products in the market will gain more competitive advantages. As a result of this, China’s printing market as a whole will evolve to be “greener” than before.
