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Ink industry leaders discuss potential impact of REACH.

The European political world is rapidly changing and the business community is being forced to confront those changes. Clearly, the most dramatic potential impact is from REACH, the European Union's (EU) proposed new chemicals policy.

REACH stands for Registration of all substances greater than one ton per year, Evaluation of substances and Authorisation of CHemicals. The goal of REACH is to protect health and environment, which is, of course, laudable. REACH would create a single system for new and existing substances, and would shift the burden of ensuring safe use to industry, including downstream users. The goal is to replace substances deemed hazardous.

The problem is that REACH goes to what some critics call extremes on testing that could potentially hamper the European chemical industry's ability to compete.

It was the result of a EU White Paper, "A Strategy for a Future Chemicals Policy" published May 7, 2003. The EU Commission adopted a revised REACH on Oct. 29. If approved by the EU Parliament in 2005, the regulations would go into effect in 2006.

Under REACH, all substances, excluding pesticides, biocides, pharmaceuticals, food additives, polymers and non-isolated intermediates would have to be registered. According to ETAD, 30,000 existing substances would have to be registered by industry. Testing cost estimates provided by ETAD suggest that 30,000 [euro] to 50,000 [euro] would have to be spent to test substances between one and 10 tons annually, and 170,000 [euro] to 190,000 [euro] for substances produced in volumes of 10 tons to 100 tons. These are heavy costs for manufacturers of small batches to handle, and companies may choose to phase out small volume raw materials rather than pay for testing.

"The big problem for ink with REACH is that the costs could be up to one-third of our revenue if REACH is approved as it is now," said Peter Koivula, president and CEO of ANI Printing Inks and chairman of EuPIA. "It will shake out some small volume raw materials, which will require more reformulations. Business will go to imported inks, which are not playing on the same level."

In addition, there is deep concern that all formulas would have to be published, eliminating confidentiality.

"There is no protection for formulas," said Herbert Forker, Siegwerk Druckfarben's president and CEO. "We won't have to meet the same standards. We would have to specify each raw material, which could cost up to $500,000 per raw material. Even different usage would have to be specified. We think that REACH will be a cost disadvantage for the industry and we will lose jobs."

Aside from cost concerns, a bureaucratic system would have to be set up that also has industry leaders concerned, and intensive lobbying efforts are underway to further modify REACH.

Ink industry executives are joining that effort, and REACH has been a driving force in the formation of EuPIA.

"We have to be united with respect to REACH," said Felipe Mellado, EuPIA's vice chairman and corporate vice president of marketing and technology for Sun Chemical Europe. "Our" concern is bureaucracy and the unnecessary costs, plus the loss of low volume, low margin raw materials and concern over confidentiality. Our competitive position may be eroded, as imported materials will get a free ride."

"REACH is an enormous threat to the ink and printing industries, adding huge additional costs and even more bureaucracy," said Dr. Helmut Schmidt, president and CEO of Flint-Schmidt. "There are a lot of question marks."

"REACH would increase bureaucracy and increase our costs, and raw material additives would disappear at the end of the day," said Dr. Michael Stumpp, BASF Drucksysteme's group vice president, GBU performance chemicals for printing industry. "It would weaken the European ink industry and increase imports from countries that don't work under the same legislation. There would be no control over finished products. We are in open dialogue with politicians and are evaluating the economic benefits vs. environmental."

Smaller specialty ink companies would face additional pressure from REACH as well, as they require a wide range of materials.

"The cost of REACH on mid-sized companies that are doing niche products will be more, since we need a variety of materials," said Heinz Walter Menke, managing director of Ruco Druckfarben.

"I'm absolutely terrified about REACH," said Alex Stevenson, Zeller+Gmelin's head of ink division. "I can't believe this is happening to an enlightened society. We recognize the importance of the environment, but because of political correctness, we're about to be pushed beyond viability. It's a matter of credibility. Do they believe us when we say it will kill us?"

European ink industry leaders see the importance of creating a saint environment, and they hope that a reasonable compromise can be found.

"The basic principles are excellent," said Heiner Ringer, managing director of Huber Group. "The danger to the printing industry is that it may be outsource to Asia. We need to find the right level."

"We agree with the idea of human and environmental protection," said Dr. Schmidt. "We are totally committed to the idea, but REACH is not the right answer."
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Author:Savastano, David
Publication:Ink World
Date:Oct 1, 2004
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