Citation
(2010), "Siegwerk NAFTAs Response to On-going Material Disruptions", Pigment & Resin Technology, Vol. 39 No. 6. https://doi.org/10.1108/prt.2010.12939fab.008
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited
Siegwerk NAFTAs Response to On-going Material Disruptions
Article Type: Industry news From: Pigment & Resin Technology, Volume 39, Issue 6
The global availability of raw materials continues to be very tight for all printing ink manufacturers, including Siegwerk. With little or no clear outlook as to the length of shortages, product disruptions are likely to last.
Following the economic downturn in 2008, many raw material suppliers reduced operating capacity and personnel. In some instances, suppliers permanently shut-down plants to accommodate the economic downturn. Inventories were reduced dramatically over 2009. Owing to the increase in demand at the end of 2009 and early 2010, many industries were not positioned to adequately supply and service their customers. In addition, many suppliers were not sufficiently convinced of the sustainability of the increases, and have consequently hesitated in restarting previously idled production capacity.
Compounding the problem, numerous cases of force majeure, closures due to environmental reasons, and labor strikes exacerbated an already tight market which has led to serious reductions in supply and product allocations. The following is a brief summary of the situation for each primary material stream:
- 1.
Pigments:
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A large portion of Siegwerk’s organic pigments are sourced from Asia. A surge in Asian domestic demand has put limitations on material available for export. Several intermediate suppliers are short of raw material feedstocks, while others have curtailed operations or have been shutdown due to environmental reasons.
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Freight costs from China have also doubled since last year. Containers are becoming scarce and ships are “slow-steaming” in order to conserve energy thereby further extending lead times.
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Commodities like TiO2 and carbon blacks are also in very tight supply as a consequence of plant closures and significant increases in demand in other related industries.
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Pigment prices have increased between 10 to 40 per cent depending on availability, and lead times are extended. For these materials, suppliers have issued tight sales controls.
2. Resins:
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Globally, acrylic resins have been particularly hard hit due to acrylic acid force majeure during second quarter 2010. Though improving, the shortages remain for acrylic resin systems.
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Globally, UV monomers are in very short supply for similar reasons as acrylic resins along with the force majeure declared for epoxy resins.
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Many other specialty resins, such as polyurethanes, polyamides, vinyls, etc. are in short supply due to plant capacity constraints and shutdowns, as well as, increases in demand in other related industries.
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Problems with the harvest of gum rosin in Southern China has put major stress on the entire supply chain of refined and derivative hard resin products with material shortages. Prices have increased more than double in some cases.
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Global shortages of cotton linters and wood pulp are being experienced. This affects the manufacturing of nitrocellulose.
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Resin prices have increased between 10 to 150 per cent. Tight sales controls and allocations have been implemented for all resins globally. Extended lead times are being demanded by all resin suppliers.
3. Additives:
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Supply issues with additives have been less dramatic with small disruptions in specialty waxes.
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Prices have increased from 5 to 10 per cent with the threat of further increases likely.
4. Solvents:
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Solvent shortages are a result of producers operating at lower capacity. Force majeure and various mechanical failures have aggravated the situation further.
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Pricing has increased between 15-30 per cent.
As a consequence, of these market and supply developments, all raw material prices are, without exception, under extreme upward price pressure. Most significant increases are to be found in the area of resins, followed by pigments, solvents, and additives.
Siegwerk is well aligned with its global suppliers to minimize supply disruptions and is continuing to focus technical efforts on finding viable, quality products to sustain customer satisfaction.
Siegwerk greatly appreciates its customers’ continued business and patience during these challenging times.
Siegwerk is committed to food packaging safety
In a statement released by Siegwerk, CEO Herbert Forker noted that the company is following principles laid down by the European Printing Ink Association (EuPIA) in regards the food packaging safety.
“Siegwerk fully supports food safety within the areas under its control,” said Mr Forker. This commitment covers all products manufactured or marketed for application to the non-food contact surface of food packaging materials and articles. Siegwerk’s commitment comprises of the following principles laid down by the EuPIA:
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The principle of placing consumer safety first.
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Compliance with relevant legislation currently in force and the resultant legal requirements in order to ensure a high level of consumer safety.
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The principles of transparency and information sharing to enable compliance within the packaging supply chain, whilst preserving appropriate commercial confidentiality and respecting competition law rules.
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The supply of products fit for the intended purpose as mutually defined between each company and its customers.
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The concept of risk and exposure assessment in accordance with internationally recognized scientific principles.
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The principles and implementation of good manufacturing practices, including audit processes.
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The principle of continuous improvement in consumer safety in the light of any new scientific findings.
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Following EuPIA crisis management procedures, or equivalents, in the event of an incident related to a food packaging ink.