November 22, 2016
The ink industry in Latin America has been estimated at more than $2 billion (€1.8 billion) and is led by Mexico and Brazil.
Inkworld Magazine reported on the market, and spoke to companies in business there like Sun Chemical Latin America, whose President, Fernando Tavara commented on the differences in the countries involved. He said that the area is “a vast region with big differences between countries and economies. Brazil, which is the main market in the region, has experienced difficulties, which are expected to continue.
“Mexico, the second biggest market, continues to grow at a solid pace, driven by the US economy. Thanks to recent government changes, imports have been opened in Argentina. Because of this change, Argentina is a country where we expect heavy local and international investments […] in general Latin America has had positive growth”. He also noted that “packaging grew close to the GDP level of each country, while the publications market has experienced moderate growth”.
Globally printing has been showing moderate growth, said Sergio Pera, Director of Toyo Ink Brasil Ltda, who added that “key drivers of growth have been packaging and labels and functional print. The publication and commercial markets are in decline as electronic media continues to replace printed media. Ad spending is demonstrating steady growth, driven in part by investment in the Rio Olympic Games.
“The Brazilian printing industry has been undergoing a period of consolidation, where smaller capacity or weaker firms are being weeded out or bought out. Consolidation is expected to continue in 2016. Boosted by a recovering US economy and lower oil costs, the printing markets in Mexico and Central America continue to show moderate growth”.
The report added that in 2015 the ink market decreased by 5.85 percent compared to 2014, and in the offset segment the decrease was 13.4 percent, caused by political and economical factors. The largest ink manufacturer in Mexico and Central America, Sanchez SA de CV, noted that “the region is experiencing [a] slow economy” and that currencies have suffered against the strong US dollar“, resulting in an increase of raw materials [bought] which come from abroad” and business practices have changed due to the “consolidation of […] customers”.
Because of the strength of the dollar it has been difficult to “export ink”, but there is also a problem with paper, as the majority of countries buy their paper from their own market, and “paper mills cannot keep up with the demand”, especially in Mexico. Other industries are consolidating, which has led to ink manufacturers “expanding their operations”, and Tavara noted that “many multinational converters are acquiring local companies in Latin America and need global suppliers that can offer the same printing solutions everywhere else in the globe.
“We will see more consolidation of the customer base and also significant investments by our multinational customers in the region”. Pera commented that Toyo Ink Brasil had finished a new liquid inks plant last May in Jundiai, and its “increased capacity will be used to develop functional materials for the flexible packaging market. In line with this expanded capacity, we worked to expand our business in Brazil and step up marketing efforts to other South American countries”.
Other ink companies are investing in production plants, and ink manufacturers anticipate growth in the Latin American market in the years to come. Tavara noted that “we expect that the market will continue to grow. We will see more consolidation of the customer base and also significant investments by our multinational customers in the region.
Pera noted: “The growth outlook for the region remains positive, showing moderate growth led by Mexico and countries in Central America. Although Brazil was plagued in 2015 by one of its worst recessions in decades, it has started to show signs of improvement. We remain hopeful of a recovery by the end of 2016.”
With many South American countries going through political and economical changes there is still a general positivity for local industries, and both the printing and ink markets are expected to “increase with a small growth rate”.
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