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Weekly Updates1 DIC CORPORATION (INCLUDING SUN CHEMICAL CORPORATION)
7-20 NIHONBASHI 3-CHOME
CHUO-KU, TOKYO, JAPAN 103-8233
PHONE: +81 3-3272-4511
FAX: +81 3-3278-8558
INTERNET: DIC: WWW.DIC.CO.JP; SUN CHEMICAL: WWW.SUNCHEMICAL.COM
SALES: DIC: $5.91 BILLION (574.6 BILLION YEN) IN GRAPHIC ARTS, INCLUDING SUN CHEMICAL, WHICH IS APPROACHING $4 BILLION IN SALES. TOTAL SALES: $9.59 BILLION (932,334 BILLION YEN).
MAJOR PRODUCTS: Broad product portfolio with capabilities in web heatset and sheetfed offset; publication and packaging gravure; news ink and publication coldset; flexographic packaging inks; corrugated packaging inks; energy curable inks and coatings; screen inks, toner, inkjet materials, adhesives for packaging, overprint varnishes, specialty coatings, effect inks, security inks and coatings, printing consumables and organic pigments for inks, plastics, paints, coatings and cosmetics.
KEY PERSONNEL: Koji Oe, chairman; Kazuo Sugie, president and CEO; Toshihiro Sugai, managing executive officer and general manager, Osaka district and Osaka branch; Yasufumi Miyazaki, managing executive officer and chairman, DIC (China) Co., Ltd. and DIC (Shanghai) Co., Ltd.; Yoshihisa Zawamura, managing executive officer and president, graphic arts business operation; Shizuhiko Abe, managing executive officer, CSR department, internal auditing department; Kazuya Shimoizumi, managing executive officer and president, high performance and applied products business operation; Kaiji Yamaki, managing executive officer and president, industrial materials business operation; Kanji Oki, managing executive officer and vice president, graphic arts business operation and office head for the new ink company establishment.
NUMBER OF EMPLOYEES: 23,613 worldwide.
COMMENTS: DIC Corporation suffered a difficult year in fiscal year 2008, which ended March 31, 2009. Sales were 932.3 billion yen, down 13.5 percent from 2007. Margins suffered as well, as operating income declined more than 47 percent.
According to DIC Corporation's annual report, "In the fiscal year ended March 31, 2009, the DIC Group continued to operate in a harsh environment. The first half of the period was dominated by persistently high prices for crude oil and naphtha, which drove up raw materials-related costs. In the second half, signs of a global recession became increasingly evident as the impact of the financial crisis that originated in the U.S. spread to the real economy, prompting a steep decline in demand in key customer industries."
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Graphic arts, one of DIC's core businesses, suffered as well. Sales of graphic arts materials, including Sun Chemical's sales, declined 11.1 percent from the previous year.
In the domestic graphic arts market, DIC's sales declined 3.4 percent to 108.2 billion yen.
On the positive side, gravure inks for flexible packaging, particularly beverage containers and food packaging, were strong, but sales of offset inks were down, reflecting weak sales for publishing and advertising leaflets, among others. Sales of news inks were affected by shrinking print runs and page counts for newspapers.
Operating income dipped sharply by 78.3 percent, owing to sales results, as well as to the fact that sales price revisions implemented in the first half in response to rising raw materials prices fell short, primarily for offset and news inks.
Net sales for graphic arts materials in North America and Europe fell to $4.25 billion, a decline of 13.5 percent. In North America and Europe, sales of packaging inks fell, reflecting the impact of recessionary conditions, while sales of news inks and publication inks declined, a result of shrinking print runs for newspapers and magazines. In Central and South America, full-term sales of most products were up, although sales of inks for publishing slowed in the second half.
The best news for DIC came in Asia and Oceania, where net sales were 69 billion yen, a decline of 3.1 percent. In India, sales were particularly strong, most notably for news and gravure inks.
In the People's Republic of China (PRC), sales of offset and gravure inks to exporters slowed in the second half of the period, while in Oceania, sales of news inks struggled in the second half.
Hampered largely by the failure of efforts to revise sales prices to counter rising raw materials prices, notably in the PRC and Oceania, operating income declined by more than 31 percent.
2 FLINT GROUP S.A.
26B, BOULEVARD ROYAL
L-2449 LUXEMBOURG, LUXEMBOURG
PHONE: +49 711 9816 230
FAX: +49 711 9816 99230
WWW.FLINTGRP.COM
INFO@FLINTGRP.COM
SALES: $3.38 BILLION (2.4 BILLION [euro]).
MAJOR PRODUCTS: Cold and heatset web offset, sheetfed offset, flexographic, gravure and UV/EB inks; coatings for publication, news, package and commercial applications. A wide range of inks for narrow web tag and label applications. Photopolymer plates and sleeve systems for flexographic applications; highly engineered printing blankets and sleeves for offset applications, press room chemicals and supplies. Dry, flushed and press cake pigments, chips and resins for ink and other applications, aqueous dispersions, hyper-dispersants and additives for the colorant market.
KEY PERSONNEL: Charles Knott, chairman and CEO; Michael J. Bissell, executive VP and CFO; Dr. Dirk Aulbert, president, Packaging and Narrow Web; Dermot Healy, president, Print Media Europe; William B. Miller, president, Print Media Americas; Brent Stephan, president, Print Media Asia Pacific; Dr. Thomas Telser, president, Flint Group Flexographic Products; Craig Foster, president, Flint Group Pigments; Jan Paul van der Velde, senior VP, procurement.
NUMBER OF EMPLOYEES: Approximately 7,200 worldwide.
COMMENTS: For the ink industry as a whole, 2008 was a difficult year, and Flint Group proved to be no exception, although its sales did increase and profits held steady.
"2008 was a challenging year for everybody involved in the industry," said Charles Knott, CEO, Flint Group. "Flint Group performed well, increasing net sales compared to the prior year. Profits remained at similar levels to 2007 due to robust cost controls offsetting an inability to fully recover raw material cost increases."
"The printing industry was challenged even before the economy started to weaken. Print demand is down across the board, which hurts everyone in the supply chain," added Bill Miller, president, Print Media North America. "Even as a larger company, Flint Group has remained nimble, which helps us address such challenges. We are focusing on selective growth opportunities, technology developments and delivering real value to our customers by producing high quality products and providing expert service to our customers."
Flint Group has placed significant emphasis on leveraging the capabilities within the organization in order to create added value for its customers. Taking further costs out of our processes as well as working together with customers in order to help them become more cost efficient has been critical.
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"During the first quarter of 2008, Flint Group took the decision to professionalize the procurement function through improving capabilities, and moving it from a regional to a global organization to enable us to better leverage our purchasing power to secure supply and achieve lowest possible cost," said Jan Paul van der Velde, senior vice president procurement. "As a result of this, we were able to mitigate part of the huge increases witnessed in 2008, due to crude oil related pressure driven by challenges around pigments and pigment intermediates and other key raw material drivers.
"While the crude oil price, as one of the many cost drivers, has relaxed significantly in the latter part of 2008, we see that a number of crude derivatives have been resilient in their pricing," Mr. van der Velde continued. "The key challenge for the ink industry will be to be able to secure their materials going forward. We expect raw material prices to remain extremely volatile in 2009, and we therefore believe that by managing purchasing activities well we can dampen the effect of sudden changes for our customers."
"We remain committed to improving our manufacturing processes while increasing the cost efficiency of our ink formulations through material sourcing and re-formulation," explained Mr. Knott. "Over the recent months we established well-defined, short communication lines between our purchasing organization and the technical teams, ensuring that we can quickly pick up opportunities in the raw material markets without compromising quality, consistency or performance of our products."
Flint Group continues to strengthen its market position, delivering innovative market-leading solutions to drive growth and meet customer expectations. The recent move to align the organization closer to the markets Flint Group customers operate in has provided an even greater customer orientated focus, simplifying the way the company does business. Single point of contact ensures each customer now has access to the entire Flint Group extensive product portfolio, supported with in-depth technical support.
Flint Group has continued to actively drive its capital investment projects in 2008. Investment around the globe ensures maximum operational efficiency and supports its guiding principle of continuous improvement.
First quarter 2008 witnessed completion of a 10 million [euro] investment project in its publication inks production facility at s'Gravenzande in The Netherlands. This investment increased capacity and also improved the stability and flexibility of Flint Group's manufacturing processes.
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