Globalization makes the world of ink industry smaller and smaller

Editor's note: In 2005, there were many unforgettable events in the ink industry. For today's ink industry, the geographical and position of customers have undergone earth-shaking changes. So what impact will these changes have on us? Let's look at the essence through the phenomenon and go into today's international consultation - "Globalization makes the world of the ink industry smaller and smaller".

For the ink manufacturing industry, 2005 can be counted as the largest "merger year" in history. Under the sponsorship of European corporate CVC Capital Partners, Flint Ink Company merged with XSYS Printing Solutions to form the new Flint Group; German amber company acquired Micro Inks The majority of the company's shares; Siegwerk (Siegwerk) acquired SICPA's packaging ink division and integrated it with previously purchased Color Converting Industries to form the new Wolters Kluwer Group packaging company. The merger of these companies is very large, both in terms of scale and scope. But more importantly, they reflect the global development trend of the ink industry. These ink manufacturers have sought suitable partners to ensure that they are able to compete in increasingly fierce market competition, as well as excess capacity and rising raw material prices. Under market conditions, the chance of survival and development.

In a mature market like ink manufacturing, acquisition is the only way for companies to gain market share. On the surface, it seems that European ink manufacturers want to enter the North American market through acquisitions. Although this is certainly one of the reasons for the increasing trend of merger, North America has occupied a very important position in the world ink market, and its development prospects - regardless of other factors - are also much better than the European market. However, behind every acquisition plan, there are many other reasons hidden, and from the current point of view, the regional differences in the ink industry are still common.

New Markets; Reverse Integration

Judging from the above several cases of merger, the most likely regional transfer may be the merger of Huber Group's Mikoto ink company. Amber has a leading market position in the European and North American markets. It supplies printing inks for sheetfed and web presses, including UV inks and flexible inks for the packaging and printing industry. In spite of this, amber's strength in the emerging Asian market is still very weak. As the leader of the Indian market, Meigao ink has rightly become the preferred partner of Amber, and they have multiple channels to enter other Asian print markets.

On the other hand, Meigao Ink lacks global distribution capabilities and the ability to make a difference in the European market. Their cooperation with Amber also brings many benefits to them. After the merger was completed, the company’s sales reached US$900 million and became the fourth largest ink manufacturer in the world. In an industry, having the ability to provide services to all customers in various markets is a very important advantage for a company, which is more competitive than other capabilities.

Interestingly, although the amber group's production capacity and market share can be improved through acquisitions, these are not people's first thoughts. Instead, the main purpose of reverse integration (backward integration) is to ensure sufficient supply of essential raw materials such as pigments and resins (at lower prices). As the price of crude oil continues to rise, ensuring the integrity of the ink supply chain has become an important factor in the success of ink manufacturers in the global market.

Packaging focus

The main starting point of the implementation of the M&A strategy of the German Siegwerk Group companies is to strengthen their strength in the field of printing applications, rather than to pursue geographical advantages. As early as a few years ago, the Siegwerk Group began to reorganize itself and cut down businesses that they believe are unlikely to grow in the future. The company believes that packaging is the ideal expansion area for companies, and they have taken various measures to strengthen their strength in this area. Their first step into the North American market was the acquisition of Color Converting Industries, a company that not only had a strong foundation in the North American market, but also had the ability to produce flexo inks that could make up for the fact that the company was in this position. Blank in the field. The goal of the German Siegwerk Group is to become the second largest ink manufacturing company in the packaging market, after Sun Chemical Group. Prior to this, Flint and SICPA occupied the second and third positions in this market respectively, but after the Shengweike Group acquired SICPA's packaging ink branch, their sales reached 161,300. Thousands of dollars to realize their dreams. But just a few months after the Siegwerk Group completed the acquisition of SICPA, the Flint Ink Group has merged with XSYS Printing Solutions. Together, the packaging ink business totaled 960 million. Ten thousand U.S. dollars.

Geographical expansion

The integration of Flint Group and XSYS printing solutions (formation of the new Flint Group) is perhaps the largest merger case in the history of the ink industry. In addition, it clearly reflects the globalization of the ink industry. Although the acquisition has allowed Flint to expand into Europe or other foreign markets in recent years, it is still the most privately owned company and still has many restrictions. At the turn of the century, the infusion of private capital in the ink industry made people see a brighter future. Flint Ink and XSYS have a certain degree of complementarity, both from the product portfolio and from their respective global markets. Their combination can significantly enhance each other's strength in the world market.

Changes in customer status

As more and more ink companies carry out mergers and acquisitions and integration, what will happen to the status of customers? What does the globalization of the ink industry mean for print shops?

The ink industry has been affected by the globalization of the printing industry. More and more large-scale printing factories, especially packaging and printing plants, have made changes along with their customers (that is, buyers of printing services). In many cases, this combination will provide customers with a single source, because large ink companies can now supply a full range of ink products for the global market. But from another perspective, this also radically reduces the number of sources, because small companies have become increasingly difficult to compete with these large companies. Moreover, they will eventually disappear in sight. The ink manufacturing industry may be a global industry, but from a sales and service perspective, it has and will continue to develop on a regional basis.

Source: Bison