Feb. 18, 2008— When it comes to printed products, these days the buzzwords all revolve around things like variable data, digital, and value-added services. The industry as a whole is trying hard to move away from a strictly manufacturer role to more of a service provider and partner to the clients and end users.

But at the end of the day, no matter how much we try not to think about it, this is an industry that produces a tangible product. Which means it takes real and tangible costs to create and produce it.

Any business, no matter what industry, will only survive as long as the costs don't exceed the incoming profit. No profit, no business. It's a simple concept in principle, but in practice, we all know it's much, much harder to quantify sometimes. Especially once you factor in all those extra services and capabilities. And then when you add in the push to move away from price-based competition, it gets even more murky.

One of the most basic costs of our industry is the ink we use to print with. These days it comes in a wide variety of types, for an ever-expanding range of machines—everything from lithographic and letterpress to the latest digital innovations.

However, while it is a very basic cost, it can be hard to pin down. Not only do printers have to factor in things like waste and coverage, they also have to keep in mind the pressures the ink market itself is facing, which makes pricing more fluid and subject to change than ever before.

To get a feel for exactly what these pressures are, and how they can affect the average printer, Printing News chatted with executives from three of the major ink manufacturers. Steve Simpson, senior vice president and chief technical officer, Superior Ink; Joe Bendowski, president, Van Son Holland Ink; and Doug Labertew, vice president and general manager, Sheetfed Ink Division, Flint Group North America, all sat down to give us their thoughts on what factors are having the most impact on ink, what trends they're keeping an eye on, and what you, as a printer, can and should expect from your supplier.

PN: What do you think the biggest issue was last year, with regards to ink production and distribution?

SS: In 2007, we saw the continuation of significant price increases in raw material costs, much of which was driven by skyrocketing crude oil costs. Additionally, the cost and availability of seed-derived oils such as linseed was dramatically impacted by the biodiesel movement, where farmers are shifting their crop selection toward corn, soybean, and other more profitable bioethanol feedstocks.

JB: For Van Son, one of the biggest issues and concerns was the non-stop price increases from our raw materials suppliers. Although we announced a price increase for 2008 in an attempt to offset these increases, we have received several subsequent adjustments that we are now absorbing. It appears that the outlook shows signs that this trend may continue during 2008, putting additional pressure on ink manufacturers.

DL: In 2007, raw material price increases continued to have an impact on the cost of ink production. A new challenge in 2007 was an unexpected policy change in China, which substantially increased the price of raw materials purchased from that nation. Distribution costs continued to be affected by freight surcharges, which we first began to see after Hurricane Katrina, and has continued with record-high oil prices.

PN: What do you believe the biggest issue will be for the ink industry in 2008?

SS: By far, the most important issue we see going into 2008 is the subject of sustainability. Many of our customers are realizing that so-called "green printing" is moving from a buzzword to a business strategy, and printing ink is one part of the sustainability equation. Fortunately, our traditional sheetfed product lines are well-positioned to support these initiatives, since they are formulated with vegetable derived oils such as linseed and soybean, as well as resins derived from renewable resources like tall oil and gum rosin.

JB: As stated above, price pressure will continue to be the main concern as we move through 2008. The question will be how much of these increases ink manufacturers can continue to absorb without being forced to pass them along to the printer.

DL: As more and more industries worldwide vie for limited raw materials, costs will continue to increase. Ink manufacturers and their customers can work together to limit the impact these changes have on our businesses.

Sustainability is becoming more and more important to the printing industry as well. Manufacturers can be proactive in developing products and processes that minimize our impact on the environment.

PN: How will this affect the print industry as a whole? What about individual printers?

SS: The challenge to our customers in the area of sustainability is that there are no hard and fast rules. Initiatives like the Sustainable Green Printing Partnership will be critical sources of information and policy development as customers continue to strive toward the so-called "greening of the pressroom."

JB: The trickle-down effect of cost and price increases will ultimately reach the printer's customer, who will be faced with more expensive printing costs. He will have the option of including these new costs in his own products, absorbing them, or encourage them to "shop" their printed materials to offshore suppliers. The latter choice will ultimately reduce the volume produced by domestic printers.

DL: The effect of the raw material situation will be seen primarily in cost. Accessibility will be an issue for ink manufacturers that do not have the relationships and resources to secure a steady supply. Sustainability demands will require ink manufacturers and printers make responsible decisions, offer eco-friendly products, and engage in environmentally sound processes throughout their supply chain.

PN: Are there any new trends or technologies in ink that you're excited about? Why or why not?

SS: We see major opportunities for customers to meet these challenges with UV-curable offset inks, which have exceeded some of our highest expectations in terms of commercial success. Not only are these products free from volatile organic compounds, but they offer other benefits such as reduced makeready, which leads to less printed waste. In addition, Superior will soon be formally announcing a new 100-percent solids sheetfed ink system that eliminates VOCs from the pressroom while reducing time to bindery to as little as 30 minutes, even when printed on both sides.

JB: Lately, there have not been a significant number of new trends or technologies in the manufacture of printing inks. Currently, our primary objective is to continuously strive to upgrade our existing products in areas of most concern to printers. These include faster drying time, improved setting speed, reduced dot gain, longer mileage, and increased stay-open time among others. All of these while trying to control costs.

DL: Energy curable printing continues to be an exciting sector, with double-digit growth estimated for 2008. You'll also hear more about sustainable products that limit negative impact on the environment.

PN: If you could give one piece of advice to printers regarding ink, what would it be?

SS: Customers who are going to thrive in the midst of all these changes will need an ink supplier who is well positioned to offer a full portfolio of both conventional and new technology. In addition, it will be more crucial than ever before to select an ink supplier who has a strong technical service network staffed by industry experts. This will ensure that when customers are ready to embrace these new technologies, they will have the best and brightest minds to help them succeed.

JB: Remember that the printing ink only accounts for 2 to 3 percent of the total cost of producing the printed sheet. If too much emphasis and importance is placed on the price of a pound of ink, the cost implications will be far greater than any perceived savings.

DL: [Printing companies should} work in partnership with ink suppliers to plan ahead. This may help control costs where possible—based on ink needs, maximize the print processes, and help navigate the continual changes in our industry.