The 2016 European Ink Review: printers see new opportunities, and are optimistic about the future of the industry.
Yet despite this gloomy picture, printers are surprisingly hopeful, particularly about the longer term outlook for print as it continues to confront the competition from electronic media.
There are signs that the decline of print in some key sectors may even be leveling out, as people increasingly show a preference for retaining print within the mix of communications and visual impact systems they experience in their daily lives.
Printers have become more optimistic about the future as new growth markets for print begin to emerge. For ink makers, the challenge is to respond to the expanding demand in these sectors before their competitors.
SURVEYS SHOW CONFIDENCE IN PRINTING'S FUTURE
Surveys commissioned by the international print exhibition drupa of the opinions of a representative sample of 750 printers demonstrate that confidence in the future is a global phenomenon. It is not just confined to the developed markets of Europe and North America.
The latest survey, the final one of three before the drupa show in Dusseldorf, Germany, from late May to early June, 2016, displays an even greater level of optimism than in the previous year. Every region is more hopeful about 2016 than 2015, with 50% worldwide expecting their economic conditions to improve this year while only 6% think it will deteriorate.
In Europe, the extra confidence is more surprising because its print industry has been suffering some of the steepest declines in print demand. But on the other hand, it has begun to find ways of responding effectively to the electronic revolution often by working with it rather than against it. In the UK, printing output rose to its highest level for two years at the end of 2015.
"The prices and margins climate doesn't appear to be clearing in the near future but firms are backing themselves with investment in innovation, training and--as one might expect in drupa year--plant and machinery," said Charles Jarrold, chief executive of the British Printing Industries Federation (BPIF).
Among some of the growing existing print sectors are those which complement consumer or business information originating on the internet. One of these is direct mail in the form of letters, flyers, brochures and postcards, which are used to strengthen the impact of internet promotions.
Direct mail has shown itself to be an efficient means of prompting consumers to make both online and retail purchases, according to a study last year by InfoTrends' Consulting Group, which carries out marketing surveys in Europe and North America.
There has been a resurgence in the use of print catalogs, often triggered by the rise of online shopping. InfoTrends found that in Western Europe, print catalogs, usually smaller and more carefully targeted than the traditional large catalogs, have been becoming popular with younger people.
"Sixty two percent of consumers receiving catalogs who made a purchase within the last three months were influenced by the catalog," said Barb Pellow, InfoTrends' group director. In fact two-thirds of all direct mail is looked at, with more than 40% of consumers making a purchase in the last three months because of a piece of direct mail they have received.
In the UK, which has one of Europe's largest internet advertising markets, the country's Advertising Association was predicting that final figures for last year will show growth in direct mail expenditure--although by only a few percentage points--which would reverse a trend of decline.
In a separate study published last year on the impact of mobile devices on printing in Europe, InfoTrends concluded that printing originating from mobile equipment has "a strong potential to add to total print volume."
However, a major barrier in Europe to realizing this potential has been lack of access, in homes and workplaces, to printers that are compatible to mobile devices.
"Public transit locations--such as airports, bus stations, and train terminals--are particularly important print locations for mobile device users," said John Shane, director of InfoTrends' communications supplies consulting service. "These places could potentially charge a premium for printing services."
PACKAGING, INKJET ON THE RISE IN EUROPE
Packaging continues to be the largest growth sector in print in Europe in value and volume terms.
Demand for packaging has been boosted by the falling price of raw materials--paper and board, metals and in particular plastics, whose prices have decreased by well over a third since the dramatic decline in crude oil prices started in mid-2014.
Sections of the packaging market, particularly for higher-end products, have been expanding much faster than GDP growth rates. The demand for some types of paper packaging has been so strong, paper makers have been converting mills producing newsprint and magazine papers to packaging grades.
Probably the fastest growing print sector in Europe is that for functional or industrial printing. A report commissioned by InPrint, which held its second industrial print exhibition in Munich last year, has forecast a 36% cumulative average increase of industrial digital and inkjet between 2014 and 2020.
"The report also shows that there are significant challenges which digital and inkjet must overcome within various manufacturing sectors in order to become accepted as future technologies," noted Frazer Chesterman, InPrint's co-founder.
The biggest difficulties could be dealing with a shift from large-scale production to the making of highly customized products with the emphasis on printing as a manufacturing process.
Last year's InPrint show in November attracted a third more visitors and exhibitors than the previous year's.
"(This year's) show was of a higher quality and more complete with new people looking at new industrial solutions from the manufacturing world," said Friedrich Goldner, director new business development at Marabu, a German screen, digital and pad ink maker.
A growing number of European printers are moving into industrial niches involving printing with screen, digital and inkjet processes on metal, plastics, foil, glass, ceramics, wood and other substrates. In addition, they are investigating the potential of three-dimensional decorative and 3D additive printing.
In the textile printing segment, one of the largest in industrial printing, an imminent battle between dye sublimation and pigment inks will provide openings for smaller printers.
"Sublimation and pigment inks allow for new printers to enter the market with a low initial capital expenditure," said Simon Daplyn, product manager for textile inks at Sensient Imaging Technologies, which last year took over UK digital specialist Xennia.
The amounts of fabric printed digitally via dye sublimation is forecast to grow at a compound annual growth rate (CAGR) of 18% over the next five years, according to a report by the UK consultancy Smithers Pira. Garments will account for 75% of the applications, with the remainder being divided between household products, signage and displays and technical textiles.
"What is driving the market in very basic terms is the increasing demand for rapid customization to create beautiful, unique clothing or household products," said J.D. Hayward, author of the report.
Currently, annual revenues from dye sublimation inks are 259 million [euro] ($280 million), said the report.
The introduction of pigment inks into the market will further highlight the importance of differences in quality and performance between inks, particularly in the high-end and fast-moving fashion markets.
"Certainly the fashion industry is pushing for highly complex and vibrant prints to be delivered against very short lead times," said Daplyn.
The fast expansion of the industrial print sector has been yet another impetus behind the continued increase in the use of digital printing processes. Digital presses have the capacity to adjust to different substrates and to the need for customization--two key characteristics of the industrial print market.
The requirements for short runs and more effective targeting of specific demographic groups is also helping digital processes make even deeper inroads into the packaging printing sector.
At the same time, the performance of digital printing technologies have improved to such an extent that they are able to compete on the basis of speed, volumes and color quality with conventional processes in packaging.
A big leap into the digital segment was taken by Flint Group, when it announced late last year the acquisition of a majority shareholding in Xeikon, the Netherland-based manufacturer of electrophotographic presses mainly for labels and packaging applications, but also for document and commercial printing. For the first time it will become a printing press manufacturer.
The company is already a manufacturer of both plates and, in the flexographic segment, plate-making machinery, while it is also involved in pigment manufacturing.
Flint Group also for the first time becomes a maker of toner, since Xeikon produces its own toners. Xeikon is also itself a manufacturer of both plates and plate-making equipment.
For more information, please see the 2016 European Ink Review at www.inkworldmagazine.com,
European Editor Sean Milmo is an Essex, UK-based writer specializing in coverage of the chemical industry.
BY SEAN MILMO, EUROPEAN EDITOR
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|Date:||Mar 1, 2016|
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