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May 1, 2001 12:00 AM
Demand for digital inks, primarily inkjet formulations, is forecast to advance 10.6 percent yearly to $290 million in 2004, driven by rapid growth in the use of computer printers. Increases also reflect a trend toward shorter run lengths in applications ranging from commercial printing of inserts and direct mailings to the printing of specialized designs for the textile industry.
Even faster market penetration will be limited by the cost of adopting the new technology, including the purchase of new equipment and training of personnel, and by challenges posed by color matching and wide-web printing. In addition, runs of digital printing applications tend to be short, and hence, the quantity of ink consumed is small relative to conventional printing inks. Finally, digital inks are currently unable to print on metallic foils, many of which are used in high-quality packaging.
Given the low profit margins and high competition within traditional ink markets, the inkjet ink market translates into a potentially lucrative arena for traditional ink manufacturers. Rapid growth of the market has attracted a growing number of ink manufacturers that are not equipment manufacturers. Entry to the market, however, has been constrained by factors both external and internal to the printing ink industry. In line with early trends in digital printing, printhead and printer manufacturers, such as Epson and Hewlett-Packard, continue to control most of the production of consumables, which often generate more revenue for the company than the original printing equipment.
For ink manufacturers that are not printer and fax equipment manufacturers or outside licensees, success in the market depends heavily on approval of the ink by the printhead supplier for use in the company's printing equipment. Consequently, equipment manufacturers, ink makers and their raw material suppliers are increasingly entering into joint development projects and marketing arrangements. For example, in 2000, Ciba Specialty Chemicals and Digital Printing Systems (DPS) announced the joint development of high-tech inkjet inks for a new line of DPS printers. In July 2000, DuPont formed a strategic alliance with Tekra, a manufacturer and supplier of engineered plastic and hardcoated films, which will sell DuPont inkjet inks used on film products.
Slim profit margins in the printing ink industry have also restrained advances in the number of traditional ink producers willing to invest in the R&D costs necessary to create inks usable in inkjet systems. By 2004, however, more ink manufacturers are expected to have entered the market, and purchase decisions of customers will be based more heavily on price and service.
Major industry players, including DuPont, Flint Ink, Sun Chemical and Van Son Holland, are focusing on development of the next generation of inkjet inks. Such efforts include Van Son Holland's formation of a digital division in 2000 and expansion of its offerings for digital duplicators, wide-format inkjet printers and desktop inkjet printers. Among its products are the Artcolour line of inkjet cartridges and Digi-ink digital duplicating press inks. The company also works with original equipment manufacturers to produce digital ink.
Source: Freedonia Group's “Printing Inks”;