The Latin and South American printing ink industry is a sizable market, with Ink World estimating its sales at more than $2 billion. The market is led by Brazil and Mexico, which have very different printing industries.
 
Fernando Tavara, president of Sun Chemical Latin America, noted these differences.
 
“Latin America is a vast region with big differences between countries and economies,” said Tavara. “Brazil, which is the main market in the region, has experienced difficulties, which are expected to continue. Mexico, the second biggest market, continues to grow at a solid pace, driven by the US economy. Thanks to recent government changes, imports have been opened in Argentina. Because of this change, Argentina is a country where we expect heavy local and international investments.”
 
Tavara added that in general, Latin America has had positive growth, although not at the same level of previous years “Packaging grew close to the GDP level of each country, while the publications market has experienced moderate growth,” Tavara noted.
 
Pablo Paduani, VP and head of LATAM region at Siegwerk, said that all in all, 2015 was a decent year for the ink and printing industry in Latin America (LATAM).
 
“Despite the challenging economic environment, we still could see some growth in the areas of flexible packaging, labels, tobacco and aluminum packaging,” Paduani said. “However, compared to past years, the growth rate in the area of packaging has slowed down in 2015. Some market segments like corrugated boxes were especially driven by seasonality of agro-based products like fruits and vegetables, which resulted in strong quarterly performances. For Siegwerk, the LATAM region is one of the company’s growth regions in which it is investing continuously to expand its local capacities and offerings.”
 
Sergio Pera, director of Toyo Ink Brasil Ltda., said that while Latin American countries are diverse and show uneven performance, the printing industry overall has been experiencing moderate growth.
 
“The key drivers of growth have been packaging and labels and functional print,” Pera reported. “The publication and commercial markets are in decline as electronic media continues to replace printed media. Ad spending has demonstrating steady growth, driven in part by investment in the Rio Olympic Games.
 
“In 2015, Brazil was hit hard with its worst recession in decades, though recent signs indicate that the slowdown has bottomed out,” Pera added. “Packaging growth remains strong, especially in the flexible packaging sector, as demand for functional packaging solutions, including retort, continue to rise. The Brazilian printing industry has been undergoing a period of consolidation, where smaller-capacity or weaker firms are being weeded out or bought out. Consolidation is expected to continue in 2016. Boosted by a recovering US economy and lower oil costs, the printing markets in Mexico and Central America continue to show moderate growth.”
 
Richard Möller, director, hubergroup Brasil, noted that official numbers from Abitim (Brazil) report that in 2015 the total ink market decreased by 5.85% in comparison to 2014 figures.
 
“In the offset segment, the decrease was even 13.4%,” Möller reported. “This market decrease was very much impacted by political and overall economical causes. Lately there is light at the end of the tunnel and hopefully the small signs do turn out to be proof for a positive trend.”
 
Headquartered in Mexico City, Sanchez SA de CV is the largest ink manufacturer in Mexico and Central America, with subsidiaries in Colombia, Costa Rica, El Salvador and Guatemala. Ernesto J. Sanchez, managing director of Sanchez SA de CV, said that the region is experiencing a slow economy, with most of the countries growing less than expected.
 
“Most of the currencies in the area have suffered against the strong US dollar, resulting in an increase of the raw materials we buy which in many cases come from abroad,” Sanchez said. “The consolidation of our customers has also changed the way we do business in the region.”
 
“The past year resulted in a decline due to the strength of the US dollar compared to the Latin and South American currencies,” said Rob Callif, president/COO, BCM Inks. “The strength of the US dollar and unstable governments/economies are the most serious challenges in Latin America. Since the US dollar is so strong, not only is it difficult to export ink but most Latin American countries are purchasing their paper domestically.  This is an issue because the domestic production, especially in Mexico, will eventually run out because the paper mills cannot keep up with demand.”
 
Consolidation and Expansion
 
There have been major moves by leading converters in the region. The most notable came in Mexico in October 2015, when Grupo Gondi and WestRock formed a joint venture, combining their operations. Grupo Gondi holds 10 production sites  for paper production, corrugated and folding cartons, while WestRock has three corrugated packaging operations.
 
In April 2016, Amcor acquired Alusa, the largest flexible packaging company in South America with sales of $375 million in 2015. Alusa’s operatons include includes Alusa (Chile), Peruplast (Peru), Aluflex (Argentina) and Flexa (Colombia).
 
This leads ink manufacturers to also expand their operations in the region.

“Many multinational converters are acquiring local companies in Latin America and need global suppliers that can offer the same printing solutions everywhere else in the globe,” Tavara said. ““We will see more consolidation of the customer base and also significant investments by our multinational customers in the region.
 
“Sun Chemical has built a new lab for lamination adhesives in Colombia in the past year,” Tavara added. “We’ve continued to reinforce our commitment to customers in Latin America with the opening of six color centers located throughout the region including: San Salvador, El Salvador; Mexico City, Mexico; Cali, Colombia; Lima, Peru; São Paulo, Brazil and Santiago, Chile. A seventh color center is also currently being developed in Buenos Aires, Argentina. 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.”
 
“As one of our growth regions, we continue to look into options including strategic acquisitions to support our growth strategy and expand our local presence in LATAM,” Paduani said. “Getting closer to customers and offering our solutions at the same high quality worldwide is one of our strategic goals. Going forward, we will especially continue investing in resources to support all different segments of the packaging market.
 
“Following our growth strategy we plan on continuing to invest in the emerging markets like Latin America and Asia,” Paduani noted. “For us it is always important to build up best-trained staff to grow with the market and meet our customers’ requirements with regards to proximity, service quality and know-how. In LATAM we have lately strengthened our footprint by opening operations in Peru. We will further continue investing in infrastructure and the local development of competences in our facilities in Mexico, Brazil and the whole southern cone. Going forward, new investments are foreseen for the Pacific Alliance trade bloc from 2018 onwards.”
 
Pera noted that Toyo Ink Brasil completed construction of a liquid inks plant at its Jundiai location, last May.
 
“This increased capacity will be used to develop functional materials for the flexible packaging market,” said Pera. “In line with this expanded capacity, we worked to expand our business in Brazil and step up marketing efforts to other South American countries, as outlined in our regional strategy.”
 
“hubergroup made important restructuring in South America,” said Möller. “In Brazil there was some investments in quality control equipment to all labs, in a new dosing system to increase special color production capacity and some new mixing stations to the liquid inks production. In Colombia, hubergroup started direct operations and invested in a new plant for offset and liquid inks.”