~ Taking a look back at China's Ink Industry in 2008 and its market outlook for 2009 ~

SINGAPORE, Feb. 10 /PRNewswire/ -- The Chinese ink industry has witnessed advancement with the prompt growth of the packaging industry due to entry into WTO, urbanization trend, and development of media industry. It has experienced an average growth rate of over 10 percent in the past decade. The total output reached 433.9 thousand tonnes in 2008, with a growth rate of 11.9 percent from 2007.

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According to Frost & Sullivan's China Industry Research Manager for Environmental Practice Vivian Chen, in recent years, the appeal for 'Green Packaging' is pushing the Chinese ink industry forward towards an environmental-friendly orientation. Printing ink, one of the most pollutive materials used in packaging, will likely become less polluting with technology advances.

The major three types of 'Green Ink' include water-based ink, UV ink, and alcohol-soluble ink. "Water-based ink is currently widely used in flexographic printing for food, pharmaceuticals, and tobacco packaging in China. It is forecasted as a substitute for solvent-based ink gradually if its applicable techniques are further improved. Soy ink or vegetable ink, which is already popular in U.S. and Japan nowadays, is predicted to be introduced into China in the next few years. Petroleum-based inks contain 30-35% volatile organic compounds (VOCs), while soy inks typically range from only 0-5% VOCs. Soy and vegetable products are used in ink for their oils, which act as the vehicle for the ink pigments," she said.

Chen adds that the first regulation on environmental-friendly ink was issued in late 2007 and came into effect on February 3, 2008. Though not compulsive, these standards have brought China in line with international practice and the Chinese regulatory system on green ink is foreseen to improve.

"However, faced with the current economic climate, most medium to small sized local competitors are facing great challenges as they do not possess strong R&D capabilities and compete through price wars. The global economic recession as well as regulation releases and revisions such as EU's REACH is likely to add costs to exporters," she continues.

Frost & Sullivan predicts these new regulations to accelerate R&D of green ink and finally eliminate ink manufacturers that are not environmental friendly. "Thus as a whole, these factors are driving the sustainable development of the Chinese ink industry in the long run. This not only benefits the printing ink industry itself, but also has profound influence on relevant business such as pressroom chemicals and recycled paper. We can see that China is now stepping into the 'Green Printing Era'," says Chen.

She continues, "We should be aware that emphasis of relevant regulations is a major driving force for the development of green ink. The regulations in this area in China are currently insufficient, whereas a series of compulsory rules are in effect in developed countries."

"In these developed regions, aromatic based ink is strictly forbidden in food packaging. In UK, solvent-based ink has been illegal in printing food packaging films since June 2000. In the US, the EPA is extremely against solvent-based ink, and flexo water-based ink is the only qualified ink for food and pharma packaging," she adds.

The 1994 Vegetable Ink Printing Act mandated that printers with government contracts give preference to vegetable oil-based inks over volatile petroleum-based inks whenever possible. This was an effort to reduce emissions from VOCs and hazardous air pollutants (HAPs). "Following these steps, China is likely to release more rules and regulations relevant to printing ink. The industry is likely to be pushed by intensive innovation of green ink driven by the perfection of its regulatory system," Chen says.

She adds that supervision power is forecasted to be reinforced in China. "After a series of incidents in 2007 and 2008, such as the Chinese milk contamination, Chinese residents are showing rising concerns for food safety. The Chinese government who oversees agricultural production and manufacturing of food packaging, chemical additives, drug production, and business regulation has attempted to consolidate food regulation with the creation of the State Food and Drug Administration of China in 2003. Officials have also been under increasing public and international pressure to solve food safety problems," she continues.

The world economy is predicted to gradually recover in latter half of 2009. With moderate anticipation, Frost & Sullivan forecasts the Chinese ink industry to continue growing at around 10 percent annually from 2009 to 2011. Also, according to Chen, the percentage of solvent-based ink is likely to shrink while green inks increase in proportion.

"Big events in the next few years such as the 2010 Shanghai World Expo will raise higher requirements for printing ink especially the use of environmentally-friendly products. With the introduction of new technologies, water-based, UV ink, and alcohol-soluble ink foresees diversification. China will also able to produce soy and vegetable ink which at present relies on import. In addition, soy and vegetable inks are easier to de-ink, which is especially important for recycling paper. New processes also have to be developed to make the de-inking and recycling of paper easier, and soy-based inks perform better in conjunction with modern de-inking procedures," she says.

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SOURCE Frost & Sullivan