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Gapen on UV

Gapen on UV

By Darren Gapen

About Darren

Darren has worked in the printing industry for 30 years and spent more than 12 years at two of the nation's leading high-end commercial printers: Bradley Printing in Des Plaines, IL, and Williamson Printing Corp. in Dallas, TX. During that time, he operated conventional and UV 40˝ sheetfed presses and also successfully managed a $15-million pressroom equipment transition. Darren also was Lead Press Instructor for Heidelberg, where he directed specialty equipment startups and was involved in all aspects of the printing process by teaching both instructor and pressroom employees.

In addition, he served as a troubleshooter for various printing companies in the U.S., Canada and Mexico. As operations manager for a start-up specialty folding carton company, he played a key role in achieving more than $6 million in sales within two years. Currently Darren is president of D.G. Print Solutions, a consulting firm that supports printing companies of all sizes. He specializes in growth development planning, pressroom color management and pressroom training through specialty print applications.

 

Raw Material Shortage – Is Anyone Paying Attention?

 
I flew into MDW airport this week and stopped for a coffee at a very familiar establishment on my way to a customer site. I went inside and ordered my usual and realized the price had gone up 22 cents. I asked the young woman behind the counter if she realized our country was in financial turmoil and asked how prices could increase. Obviously the 19 year old didn’t have a clue, an answer or a care in the world. (Oh, to be young again.)

Have you noticed the increase in your supplies prices lately? After making a few phone calls to some old friends throughout our industry, I found out that all manufacturers are having a very hard time with their raw material suppliers. It seems this has been an issue for some time now. Both water-based and UV materials have been hit harder this year with either allocations or sales controls than at any other time I can think of.

On the UV side, there are 3 major domestic material suppliers—Sartomer, Cytec and Cognis. Cognis has been fading from the scene for several years and has lost its larger presence. The UV portion of its business was recently sold (announced March 2010) to IGM, is an Asian company. Its specialty surfactant division was sold to BASF.

From a market perspective, Monomer and Oligomer has been in tight supply. Acquiring acrylic acid and epoxy has been the issue with UV materials since the spring of 2010 and is continuing through summer, although some supplies are opening. I suspect this is due to the significant price increases everyone has seen in the last couple of months.

Inventories of acrylic acid (used in every product you buy), TPG, HD and TMP are all extremely tight. It looks like they will continue to be in short supply through 2010.

Most of the supply issues are a combination of several factors.

1) There was a fire at Arkema's acrylic acid plant. This, combined with a planned Dow shutdown, killed the U.S. supply of acrylic acid. This put companies like Sartomer and Cytec on allocation. Normally, the Asian suppliers would take advantage of the domestic shortage but there has been a larger trickledown effect. There is no such thing as non-global issues with chemical supply. The Asian market rebounded faster than the U.S. market, pushing the supply demands higher than available material capacity that fueled the shortages and opened the door for substantial price increases.

2) Sartomer's plant in China went down in February and just recently is scheduled to come back on line. This affected not only Asia but also U.S. finished goods.

The reason everything is tight in general is that the Asian and North American demand has come back with a vengeance. Even the EU is better than it was. All raw material feedstock capacity was cut in 2009 since the demand was so light. Plants were mothballed and employees let go and that manufacturing capacity all takes time to get back on-line. In fact, many vendors are not even doing anything until they are sure that the recovery is real.

The bottom line here is that printers really need to manage their consumables better and project what their usage will be. In today’s economy, no one wants to carry inventory, but in tight material situations a plant's sourcing strategy needs to be managed with more focus.

(Thanks go out to Joe C. for sharing his insight on this topic.)

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