The past few years have been extremely challenging in terms of supply of key raw materials for inks and their ingredients. Suppliers in China have been closed temporarily or permanently due to tightening environmental regulations. In 2018, the shuttering of a key intermediate for photoinitiators creates a shortage of TPO and TPO-L, leaving ink companies scrambling to find materials for UV inks and coatings, often having to pay much higher prices for what they could find. As a result, many leading ink manufacturers have looked to diversify their supplier base.
 
The tragic explosion at Jiangsu Tianjiayi Chemical in China in March serves as a reminder of the need for tight regulation in China as well as concerns over doing business in the country.
 
On March 21, Jiangsu Tianjiayi Chemical, a pesticide plant in the Xiangshui Chemical Industrial Park in Chenjiagang, had a massive explosion. The pictures that can be found on the Internet show the damage to the plant. The worst of it is the loss of life; at last report, Bloomberg reports that 78 people are dead and 187 were hospitalized as of April 5.
 
This is not an isolated incident, but it certainly is the worst.
 
Understandably, Chinese government officials are taking immediate actions, including closing the business park until further notice. Officials are also ramping up inspections of similar businesses. The government is facing increasing pressure from its citizens; already, there has been a de-emphasis on producing certain products due to pollution. All of this makes sense.
 
For ink companies, these cuts have reduced pigments and intermediates as well as other ingredients, such as materials for photoinitiators. While the Jiangsu Tianjiayi Chemical plant produced pesticides, which is not used for inks, companies in the industrial park produce materials for red and yellow pigments and photoinitiators, and they will be closed for the foreseeable future.
 
On April 5, 2019, Flint Group sent out a press release lamenting the tragedy while discussing how the explosion will impact the industry.
 
“Our hearts go out to the loved ones of those hurt or killed,” Michael Podd, chief procurement officer of Flint Group’s CPS Inks business,  said in the company’s release.
 
In the release, Arno de Groot, VP procurement for Flint Group Packaging, reported that thousands of factories have already been shut down. “Government investigations and safety inspections will impact the total chemical industry in China and will not be limited to the province where the catastrophic accident happened,” de Groot added. In particular, publication and UV inks will be affected by the plant closure.
 
Flint Group’s Podd said that his company will be able to maintain supply due to working closely with its partners, although prices will rise.
 
“Our preferred status with our partner suppliers helps us minimize supply chain disruptions, even during unforeseen crises like this one,” said Podd. “Our customers can rely on us for an uninterrupted supply of inks, though these raw materials will come at a higher cost due to the supply/demand imbalance this event has caused.”
 
I just returned from the annual National Association of Printing Ink Manufacturers (NAPIM) convention and spoke with numerous industry leaders. To a person, all of them emphasized the loss of life and noted that plant closures in recent years have led to their companies diversifying their supply chain.
 
They noted that plant and industrial park closures have become more and more common in recent years. One company I spoke with said that it has increased its inventory dramatically in case raw material supply becomes unstable. Others have qualified vendors outside of China to protect themselves against supply concerns. All of these leaders noted that higher costs for raw materials are a major issue, but supplying customers has to be their first consideration.