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The Price of Pigments.

The increasing cost of raw materials has been among the most serious concerns of printing ink manufacturers in recent years. As the cost of resins, varnishes and other additives have gone up due to increases in the price of crude oil and other ingredients, ink makers have had to further tighten their belts, or come out with price increases of their own.

Increases in areas such as transportation, shipping, wages, insurance and other costs of doing business have further eroded profits, but one thing I always heard from leading ink executives was this: As long as the price of pigments held steady, ink prices might remain stable. That sentiment should be of little surprise. After all, pigments are the most costly ingredients in most ink systems.

However, in interviewing the major pigment companies, it is clear that they, too, could no longer hold the line on prices due to their own rising costs. The vast majority of domestic pigment manufacturers have raised prices this year in the neighborhood of 3 to 6 percent, depending upon the specific pigment.

It is clear that pigment manufacturers face many of the same pressures as their ink customers. Ink manufacturers have a difficult time securing price increases from their customers, which is similar to the challenge facing pigment producers. Pigment makers lament the fact that they haven't been able to raise prices for more than five years, and have absorbed the increases from their own suppliers at the cost of making a reasonable return on investment. Ink company executives tell a similar tale.

Consolidation is also a source for similarities, as a number of smaller pigment companies were acquired. Aarbor (acquired by Lansco Colors), Allegheny Color (acquired by Apollo Colors), Alper Dispersions (acquired by Flint Ink/CDR Pigments & Dispersions), PCL Group (consolidated into Sun Chemical) and Uhlich Color (acquired by Magruder Color) have been absorbed this year.

There is one major difference, though: there are a variety of inexpensive pigments being imported into the U.S. from the Asia Pacific region, which is forcing domestic pigment manufacturers to keep their prices artificially low.

For many pigment manufacturers, the health of the pigment industry is directly tied to the state of the ink industry. For the sake of both industries, it is a necessity for prices to rise, in order to allow these companies to further their own capabilities.

David Savastano

Ink World Editor

dave@rodpub.com
COPYRIGHT 2001 Rodman Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Publication:Ink World
Date:Mar 1, 2001
Words:402
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