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  • 16 Feb 2021

Siegwerk’s raw materials supply chain under pressure

Siegwerk’s raw materials supply chain under pressure

Packaging ink suppliers are facing increased prices on pigment raw materials, petrochemical price increases, supply constraints, and higher freight cost due to the reduced availability of containers. This has resulted in significant pressure across the entire packaging ink industry; Siegwerk, a global provider of printing inks for packaging applications and labels, is not immune to the supply difficulty these issues have caused.

‘Already in 2021 we are seeing a combination of several factors which are interlinked with the Covid-19 crisis which has severely impacted the overall raw material supply chain,’ said Dr. Arash Babai, director of global purchasing for Siegwerk. ‘Our team is working hand-in-hand with our global supply chain to leverage its buying power and minimize risks to our customers.’

Prices around the globe have seen sharp increases in the first quarter for pigment raw materials, including titanium dioxide (TiO2). While the actual costs vary widely from region to region, higher than average per ton costs have been aggravated by significantly higher freight costs.

'Beyond these developments, we continue to see broader market momentum in other pigment categories, such as carbon blacks, metallics and colored pigments. In fact, we have received price increase notifications from multiple strategic suppliers,' added Dr. Babai.

Similar to pigments, petrochemical raw materials, which include UV resins, polyurethane resins, solvents and acrylic resins, have recently experienced higher prices beginning in Q2 2020. This is as a result of shortages of epoxy resins, higher demand for polypropylene glycol in flexible foams and acrylic acids, among other things.

According to Siegwerk, to ensure customers receive an uninterrupted supply of its inks and varnishes, Siegwerk’s global purchasing and procurement teams are monitoring raw material inventory levels and supplies. Both are in communication with local teams around the globe to manage any risk of a disruption of supply from Siegwerk to the market. ‘While the overall situation is constantly changing, Siegwerk Is devoting all available resources to ensure our supply to customers is uninterrupted,’ concluded Dr. Babai.

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