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U.S. Ink Ingredients Market Study
Frost & Sullivan, Oct 2004
Economic Pressures Force Ink Ingredients Industry Participants to Desist from Hiking Prices
Despite rampant price hikes in the last two years across most raw materials sectors, ink manufacturers avoided transferring the price rise to customers by absorbing the margins themselves. This bid to retain market share, regardless of increasing energy and manufacturing costs, has placed a great deal of strain on most manufacturers, and is proving to be a major challenge for the industry. Moreover, the U.S. economy, on a downswing, discouraged consumer spending reducing demand for ink due to a decline in package printing, consequently causing a dip in the demand for ink ingredients. The resulting overcapacity for ingredients is suppressing prices. The competition from offshore manufacturers also forces local producers to cut prices to stay afloat but participants anticipate some respite by early 2005.
This Frost & Sullivan research analyzes conventional and digital ink technologies in the U.S. region and contains growth forecasts for various ink systems such as aqueous-, solvent-, oil-, and radiation cure-based with in-depth analysis of colorants, vehicles, and additives for each category. It also includes comprehensive strategies to aid market penetration and to address each challenge.
Demand for Quality Ink Sustains Growth in the U.S. Ink Ingredients Market
Ink ingredients manufacturers in the highly competitive United States market, offer several products that work in specific applications, and quality is a key concern while purchasing them, says the analyst. With the commoditization of certain basic colorants and other ingredients used for conventional printing, there is a greater emphasis on the quality of product. Ink ingredients from Far Eastern countries, are available at lower prices, especially, on aqueous-based colorants. However, the quality of inks using some of these materials is considered sub-standard and demand persists for indigenous products.
Striking a Balance between Supply-Demand Critical for Market Success
Meager consumer spending during the economic decline witnessed in 2001 and 2002 has gradually picked up and the print industry anticipates increase in demand across the board, notes the analyst. A recovering U.S. economy bodes well for the industry, and to leverage this opportunity, ink ingredients manufacturers, apart from satisfying customer needs, have to identify the right balance between supply and demand.
Retaining a minimum inventory and reducing overhead costs will assist most ingredients manufacturers’ to strike this critical balance. Since this might lead to an inability to meet sudden demands for large consignments, maintaining close working relationships with other smaller manufacturers, who may be able to supply materials at short notice, can help tide over the crisis.
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