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Exploding Costs for Energy & Raw Materials Seriously Affect the Printing Ink Industry

Brussels, 8 August 2008

The dramatic increase in the cost of raw materials, energy and transportation, seriously impairs the prosperity of the printing ink industry: The costs of raw materials used in the production of inks and varnishes have risen by more than 30% worldwide while oil and natural gas as the most important energy sources are experiencing the fastest inflation in decades. As a result, the ink industry is forced to react to this situation says the European Printing Ink Association (EuPIA).

The serious situation regarding Printing Ink raw materials and intermediates is in part caused by a combination of two major problems: A greater demand for these materials, especially in emerging markets, and the high crude oil price that drives the cost of most of these materials up.

In addition this twin effect coincides with shortfalls in production following environmental restrictions imposed by the Chinese government ahead of the Olympic Games in Beijing.

Based both on these restrictions, and those that the Chinese government applied to chemical manufacturers last year in order to generally control environmental impacts, experts believe that this situation will not be reversed after the Olympic Games, but will remain a major impact factor for the future.

As a consequence major worldwide chemical corporations and producers of pigments and intermediates have already put into action, or announced, price increases of 10 to 30% for their products with immediate effect.

Emerging markets, including India and China, whilst also affected by the slowdown of the US economy, still have an extremely strong domestic demand for materials and goods.

As in the past, ink producers will continue and reinforce their efforts of absorbing higher costs through internal rationalisation measures, improving recipes and increasing efficiency.

However, it must be realised that now costs are escalating faster and in greater numbers than ever, without any short-term relief in sight.

 

Contact:

Dr. Martin Kanert

Executive Manager of EuPIA

Tel.: +32 (0)2 676 74 84

Fax: +32 (0)2 676 74 90

E-Mail: m.kanert@cepe.org

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