As we noted in part 1 of Ink World’s annual Latin American ink report, the national economies in the Latin and South America region are growing, and so are the printing and ink industries. This is leading to new investments in the region.
 
The Latin and South American packaging field has been active in terms of mergers and acquisitions, with Brazil headlining a trio of recent acquisitions. With a population of 209 million, Brazil is the most populous country in the region, with Sao Paulo the country’s largest city at more than 12 million.  
 
Interestingly, São Paulo has witnessed three packaging ink acquisitions since December 2016, when INX International Ink Co. added Creative Industria e Comercio Ltda., a leading flexo and gravure ink manufacturer. In December 2017, Wikoff Color purchased Verti Produtos Químicos, a packaging and label specialist, while Siegwerk acquired Tupahue Tintas.
 
Tupahue Tintas is one of the Brazilian market leaders for flexo and gravure printing inks and varnishes for flexible packaging applications, and Andrea Serturini, president and head of LATAM region at Siegwerk, reported that the addition has proved beneficial for both companies.
   
“With the completed acquisition of Tupahue Tintas, we particularly strengthened our market coverage and successfully expanded our packaging business in Brazil,” said Serturini. “The integration process is well proceeding. The market has reacted highly interested and we were already able to generate some great new opportunities.
 
“In LATAM, Siegwerk is watching with interest the modern packaging technologies on the horizon,” Serturini added. “Here we see significant investments in printing presses in a move to gain process optimization and efficiency. We also expect digitalization to further increase. Ultimately, market consolidation will boost competitive pressure for more innovation, better service and competitive costs. We expect some important consolidations among our customers in Brazil, which could be slowed down for the moment due to current economic uncertainties in the country.”
 
Converters are also making moves on the M&A front. In the largest deal, Coveris Holdings S.A. is selling its Americas packaging business to Transcontinental Inc. for $1.32 billion.
   
“While we’re seeing some consolidation among local converters in the Latin America region, there are also many multinational converters acquiring local companies in Latin America,” Fernando Tavara, president, Sun Chemical Latin America, observed. “Many of these companies are using European and North American technologies, so there is pressure to standardize operations so that the same printing solutions can be offered everywhere else in the globe. Additionally, while the Latin American market is still catching up to the regulatory standards set by Europe and the United States, there is a lot of exporting to those countries that requires printers to already be compliant with the most stringent global regulatory standards.”
   
“We have seen consolidation and we expect this to continue or even a growing trend in M&A, very much dependent on the single regions or countries,” Richard Moller, managing director of hubergroup Brazil, noted.
   
“Consolidation continues in the flexible packaging field although on a much smaller scale compared to two years ago when small firms were being acquired or merged with major players from Europe and US,” Sergio Pera, director at Toyo Ink Brasil, said.
 
Capital Improvements
 
With an eye on growth in the region, ink manufacturers are investing in their facilities.
   
“Our key investment this year was in a new site in Monterrey, Mexico,” noted Tavara. “We also continue to focus on the improvement of our capabilities and increasing our assets in all of our facilities across the region. We have invested in the latest generation of equipment that standardizes our production and lab equipment across the region to provide best-in-class technical support to our customers.
   
“We also continue to expand our facilities for lamination adhesives and have recently opened seven color centers located throughout the region, located in San Salvador, El Salvador; Mexico City, Mexico; Cali, Colombia; Lima, Peru; São Paulo, Brazil and Santiago, Chile,” Tavara continued. “Our color centers and color management tools provide printers with production efficiency, cost savings on press make-ready time and on raw materials, and consistency of color reproduction.”
   
Moller said that hubergroup made some important investments in last few years in South America, including new productions plants in Chile, Colombia and Brazil.
   
“All new facilities were accompanied by investments in new equipment and technologies, in addition to strong training of our professionals,” added Moller. “As a result, we have increased capacity, but we were also able to even improve production accuracy and quality control aspects. These ongoing investments are preparing hubergroup for the growth challenges of the coming years. We are also strengthening our cooperation with our agents and dealers, who are increasingly structuring themselves.”

A Growing Market
   
Overall, ink manufacturers see some excellent opportunities for growth in the region.
 
“Sun Chemical expects the Latin America market to continue to grow despite the uncertainty in the region, and as a company we’re well prepared to support the growing plans of our customers with local operations in each and every country of Latin America,” Tavara noted.
   
“Siegwerk’s vision is to become the world’s leading manufacturer of packaging inks,” said Serturini. “We want to further shape the future of packaging by supporting packaging printers and converters with tailor-made innovations to address upcoming packaging approaches and trends. To achieve this goal, we are doing our utmost every day and continuously look for new growth opportunities and possible improvements to further strengthen our leading position at the packaging market worldwide.
           
“In order to ensure sustained success for the company, we at Siegwerk see a clear need to devote our resources to serving the markets of tomorrow,” he added. “That’s why we will continue looking into all kind of opportunities with potential for growth – organic and non-organic – also in the LATAM region as it is still one of our growth regions.”
 
Pera noted that Latin America is a key segment for rigid and flexible packaging, and Toyo Ink is looking to boost its presence in this market.
 
“Demand continues to grow for packaging solutions that offer greater convenience features, stronger barriers, and lighter weight materials, and for shorter print runs,” Pera reported. “For this reason, we have been working closely with our customers to improve our range of polyurethane resin-based inks to meet their requirements for greater versatility and performance. At Fispal Tecnologia in June, we introduced a new range of high-performance polyurethane-based surface and lamination inks for flexo and gravure printing. We offer a broad range of systems, from general-purpose snack structures to high-end retort and hot-fill packaging applications.
 
“Toyo Ink Brasil is also working to expand its local presence in Andean states with plans to open up branch offices in the region,” Pera continued. “We are targeting increased business from this region and are focusing on its most stable packaging markets, such as Chile. We had a successful showing at the first ever LatinPack, which attracted roughly 5,000 visitors at its inaugural show in Santiago this past June. We are also looking to expand our operations in Argentina, where recession is also coming to an end. Relaxed import restrictions have led to a rise in press installations, making the country an attractive market for us.”

Siegwerk’s facilities in Toluca, Mexico. (Source: Siegwerk)