Pigment, resin and small-scale ink manufacturers discuss ink matters

The All India Printing Ink Manufacturers’ Association (AIPIMA) brought together a diverse mix of pigment, resin and small-scale ink manufacturers to examine key issues like escalating costs of raw material, shortages, profitability and trends surrounding the Indian printing ink arena. The panel discussion was hosted on 28 February, 2014 in Mumbai.

26 Jun 2014 | By PrintWeek India

The Panel

Moderator:  D M.Sathaye

Pigments:   Dr Deepak Parikh, Vice Chairman and Managing Director Clariant

                  Rajul Shah, Micas Organics

Resins:       Karle, MD, Gem Synthetics

                  YogeshSolanki, Setco Chemicals

Inks: Rajesh Mahajan, Hitech Inks, manufacturing plant in Vapi, started a South African based company. He has acquired a stake in the company and has  been running it since last seven years Dr Ravi Gandhi Bombay Well Print, dominates the web ink field

DMSathaye (DMS) : Raw Material is the key. Having a good customer is important but having a reliable supplier is very crucial to give consistent product. The important raw materials for ink industry are pigments, resins, oil additives, solvents  etc.

Dr Parikh, I will start with you. What your views on status of Indian printing ink industry, and how can Clariant contribute to improving prospects of the ink maker especially SME sector. There are multinationals representatives here today. We are not averse to their growth. But they do not need as much help as we need or we need more help than they do.

Dr Parikh: First of all I would like to thank my colleagues, Arun Rane and Sambit Roy for giving me a short crash course about ink industry in India. I have a perspective of the chemical industry but bit naïve to the Indian ink industry.  

India is growing at 4-5 %, we expect double the GDP in terms of growth and packaging industry is at the heart of it. We sell a lot of products to plastic industry for Masterbatches and pigments for specialty plastics applications. We see a significant growth from 4%-20%. It is an ambitious number. But as the middle class rises, there is a tremendous opportunity for growth.

The halogen-free and fluorescent-free pigments are the key trends. There’s a strong push for flame retardant-based to halogen-free. Though the metallic inks are banned in Australia and China, there is still a bit of shine and metallic-based inks has a scope to grow.

As a leading manufacturer and supplier of pigments, we are obliged to make the products environment-friendly.

When it comes to printing ink, we definitely want to be working more closely with toluene-free based systems of the ink producers. These are some of the key trends.

Rajul Shah: As far as I know, there are no new pigment manufacturers who have come up in India in the last few years. The industry is growing at 7%-10% pa. The government has stopped issuing licenses for new pigment manufacturers. Even people who are there are struggling to manufacture quality pigments and five years down the line, industry growth will be around 8%-10%. Pigment requirement is going to be another 50% more. The situation is difficult for pigment manufacturers right now. We go through a lot of pollution issue and government is demanding that we reduce pollution, make pigments which are environment-friendly.

Pigment is a key raw material for printing ink. Printing ink manufacturer should work very closely with a pigment manufacturer and make sure you have a reliable and a quality supplier.

We also keep working on supplies, quality and easily dispersible pigment, so that printing ink manufacturers’ grinding time will be saved. Printing ink industry is doing well and I hope they continue to grow 8-10% every year.

DMS: How can you help us become more competitive, more cost-effective especially in the export market since that is where we find it difficult to compete on price?

Dr Parikh: This is a very competitive market. Innovations are not in the fundamental chemistry. Raw materials are not changing; it is still petrochemical-based. As far as manufacturing is concerned, we have to follow lean Sigma, make our processes more efficient, save energy and that is the only way to we can pass on the savings. So it is very important that the cost of making has to go down by controlling our processes more efficiently. Per employee, we try to make more pigments, more metric ton per person. In our company we have increased that to 20 % higher production per individual.

We focus on improving individual productivity and hence control costs which in turn, we can pass on to the customer. As a global supplier our technologies are global. Some of the things we do, for example, in the ink preparation the emulsifier that we use.  Those kind of products we make for water-based have been made more innovation-based rather than doing what we are on a day-to-day basis.

We bring innovative solutions and take it to the customer and try to be much more competitive. Look at the western packaging versus Asian. Japanese packaging is as good as the western packaging. But I see that the demand for Evian has gone up by three times in this quarter. We have to be much more agile. Evian bottle is different from Aqua. Evian sells three times more. This is a simple example of packaging. Packaging sells the product. We have to do creative marketing to get value out of it. Not just commodity mentality like newspaper. If you make packaging better the product itself enhances value.

We should be able to take a fair piece of pie. It not just selling that’s important, but creating value is equally important. Differentiate the industry, to make it appealing to the consumer.

Rajul Shah: As far as pigments are concerned, there is not much of a difference in the prices at which Indian companies are buying and the international prices. Once upon a time, China was almost 30%-40% cheaper than India. Today there is no difference between Indian and Chinese manufacturer. For them also the pollution control cost has gone up. We export pigments and we do not come across much competition compared to China. As far as pigments are concerned, I don’t think Indian ink companies are paying higher prices compared to any international ink manufacturers.

D M Sathaye: Many of the ink makers present here today are from the SME sector. It is not possible to revise the prices every now and then.

Rajesh Mahajan: I have been more of an ink user than a producer. So I am eligible to answer both the questions.

I think the ink industry is fairly happy to just survive. On the other hand, I would like to thrive. This is a very fine difference. From the packaging manufacturers’ side, our customers which comprises the converting industry, are very stressed right now. And we as suppliers can do only as well as our customers. I have been in the ink industry for last 6-7 years and I don’t see the urge and the will to do better. We are happy being pressurised by our customers and suppliers. I don’t find brave enough ink makers here who can take the initiative and pass on the justifiable costs. That does not mean we become inefficient and pass on the costs. We need to be as efficient as the benchmark placed on us.

Association has to see if the members are doing enough to justify passing on the costs.  

I must compliment the pigment makers if they are able to pass the cost to us than we as ink producers do.

Rajul Shah: As far as I remember, today the pigment prices are cheaper than they were ten years ago. The profits of pigment industry have gone down.

DMS: But two years ago, in a presentation you had given showed you make huge profits.

Rajul Shah: It is just 3%-4% profit. The turnover was more that is why profit was more. There is no hike in percentage of profit. Even then it was lower than the ink companies.

R Mahajan: Is he not justified to make profits. We are a fairly consolidated industry.  I am a liquid ink producer. There would not be more than eight to ten liquid ink manufacturers that come to mind. These eight to ten cannot put our minds together and agree that we all need to survive and do well.

DMS: Ravi Gandhi’s ink company is competing with multinationals selling web offset inks. Do you feel the pressure because of pigment pricing?

Ravi Gandhi (RG): I have been badly affected by the rising prices of pigments. I have not been able to understand that in the last one year, prices of pigments have shot up dramatically and there has been a shortage of procuring the pigments. Beta Blue is not supplied in time. They have always been asking for more money for yellow.  

It is difficult for newspaper ink maker to survive. The newspaper people don’t agree to price rise every day. These people give a price rise every month or every second month. We don’t know from where and how to procure Beta blue. Every time we ring him up it is a new price.

It is very difficult for news ink manufactures to manage in this kind of market.

DMS: Have you been able to replace Beta Blue with something else?

R Gandhi: No. we have to use Beta Blue every day.  

Rajul Shah: What he says is right, that he does not find a supplier. There is a shortage of pigments because the market has grown. Pigment manufacturers are same. That is why he is feeling the pinch. Pigment manufacturers ask for price hike because raw material prices have gone up. That is not in our hand. As pigment manufacturer, we make few raw materials but others who don’t, depend on China. Even in China, the raw material prices have gone up drastically by around 25%-30%.

Dr Parikh: In the fourth quarter, the cost of raw material for our pigment business was up by 5% y-o-y. Part of the challenge is: we are not vertically integrated. So when it comes to CPC Blue, those raw materials are beyond our control.

DMS : AIPIMA has laid focus on SME for this interaction. Purchase power is where SMEs have an disadvantage over MNCs. Volumes are less and so is money power. Do you have any separate and differential price for multinationals?

Dr Parikh: It’s a catch 22 situation. The industry obligations are to serve both the spectrum of customers. The big customers and small are equally important. Larger volume customers tend to demand a better advantage in any industry. So there is also some kind of a volume discount that gets tied with larger volume. It’s a strategic partnership, where we work together and look at it more from a sustainable point of view. It’s not like in today out tomorrow.

DMS: As you know resin is part of the ink.   Karle, you dominate the rosin based resins. What is the scenario now?

PP Karle: We are making synthetic resins for inks since 42 years. Resin is not seen, only colour is seen in printing inks. But inks cannot be made without resins. Resin is like a good singer but the actress who dances to the song takes the credit. If anything goes wrong, the ink maker will first complaint to the resin manufacturer.

Fifteen years ago, the speeds of presses were hardly 15,000 impression per hour. Today it is over 70,000. That’s the revolution that has taken place. That time the ink industry was around Rs 300-400 crores. Today, it is Rs 3500 crores per annum with only 10 major ink manufacturers.

The printing industry has grown well and resins has contributed to that.

DMS: What’s the scene with rosins?

PP Karle: There are no local raw materials for rosins in India. About 70% of the resin is gum rosin. One of the main suppliers earlier was HT Forest Corporation. At that time, the world production of gum rosin was about 1-lakh metric ton per annum. At that time, one of the best Indian company production was 15,000 metric ton per annum. Today the world estimated production of gum rosin is 4-lakh metric tons. So gum rosin is 150,000 tons per month.

About 40% of the ink is resin and in that amount of resin, 60 % is gum rosin, which is imported either from China, Indonesia or Vietnam.

DMS: Yogesh you are doing speciality resins like PUs,  what can you say to the audience?

Y Solanki : My  difficulty is that very few people are using my product. Most of them are based on old technology.

DMS: You are an ink manufacturers also. Do you use your own resins?

Y Solanki: We use only our resins.

DMS: Does this help you or do you find it to be a limitation?

YS: We may be better off by 5-10% as far as PUs are concerned. Rest of things we are par with others.

DMS: Do you manufacture rosin based resins, other speciality resins required by liquid inks?

Y Solanki: We do make very specialty based polyamides, acrylics.