Securing raw materials has been increasingly challenging for ink manufacturers. Some key materials, most notably photoinitiators and pigments, have become scarce due to more stringent environmental regulations, and when these ingredients are available, prices are rising.
 
As a result, ink companies are facing a difficult challenge. Due to regulatory concerns in areas such as food packaging, some inks cannot be reformulated. Acquiring the necessary materials is critical, but at what cost is just one of the many questions ink industry executives are facing.
 
Like its competitors, INX International Ink Co. is facing these concerns, and president and COO John Hrdlick and Rick Westrom, the company’s SVP strategic sourcing, recently discussed their concerns with Ink World.
 
“Obviously 2018 has been a very difficult year and we expect the issues related to raw materials to continue into 2019,” Hrdlick said. “Hopefully, the increased tariffs will be resolved, but we are preparing to deal with them and have been discussing the details with our customers. We will continue to do what is needed in purchasing, R&D and operations to ensure we maintain supply to our customers. Our people have been working extremely hard to maintain supply and mitigate as much of the added costs as possible. Anything less than that is simply not an option.”
 
Raw materials have been under a variety of pressures, financially and supply related. Westrom said that INX is managing these challenges through a variety of measures.
 
“Due to our global reach, strong technical expertise and our vast supplier partnerships, we have been able to manage the current supply challenges,” Westrom added.
 
Westrom pointed to a wide range of key ingredients that he is watching over. These include photoinitiators (mostly TPO); silicones used mainly in coatings to control COF and release properties; BIT-based biocides used primarily to inoculate water-based ink systems to prevent biological growth; and aluminum Pigment Blue 79, which is used to produce copper-free inks for water-based ink systems. Unfortunately, every time there is headway being made, something else crops up.
 
“Just when we see improvement, supply tightens up again as environmental plant closures continue to plague the supply chain as well as fire disasters impacting precursor supply,” Westrom noted.
 
Westrom observed that environmental regulatory efforts in China are impacting the supply of pigments and other key ingredients. “Many products are being impacted, especially photoinitiators and pigment intermediates,” he added.
 
To add to this, changing regulatory requirements on the printing side require ink manufacturers to modify their own formulations, sometimes eliminating certain raw materials altogether. REACH is a clear example of this trend.
 
“The global changes in regulatory classifications and reporting is impacting the types of raw materials our customers want to be formulated in their products,” Westrom noted. “REACH is impacting our supply of products into the EU especially as suppliers are not willing to register their products. In addition, this has slowed new product development introduction into the EU.”
 
With increasingly higher prices for key raw materials becoming the norm, ink companies are having to work with their customers on increasing their pricing, which is never easy. Higher tariffs on key chemicals are further adding to the price headaches.
 
“The increased tariff costs are adding salt to an open wound as the industry is already facing large price increases due to extreme shortages,” said Westrom. “As a result, we are doing whatever can be done to avoid increased costs by reviewing our options to source from other countries other than China such as the USA, EU, Mexico, Canada, Korea and India.  However, that does not necessarily mean that the alternative sourced material will be lower priced than the Chinese material with the added tariff.
 
“Customers understand tariff increases are out of our control, but no one likes price increases,” he added. “When we have shortages, controlling costs is not so easily done as you will pay higher prices to acquire the supply of materials needed for your customer base.”
 
Overall, Westrom doesn’t expect raw material pricing and availability to improve in the coming year. “We anticipate these challenges to continue through 2019,” he concluded.