West Asia Conflict Pushes Up Printing Costs

The ongoing conflict in West Asia has begun to impact the printing and packaging industry, with crude oil-linked raw materials witnessing sharp price increases. As per estimate there are about 375 printers at micro level operating in Ludhiana, with about 2800 printers in Punjab. Most of the 2.8 lakh printers in India are micro level printers.The surge in input costs including inks, chemicals, laminates, paper and duplex board is pushing production expenses up by as much as 30-40%, making operations increasingly unsustainable for small and medium units, Kamal Mohan Chopra, General Secretary of the Offset Printers Association (OPA) said.Several key inputs used in printing and packaging are directly or indirectly derived from crude oil, printers said.With geopolitical tensions disrupting supply chains and pushing up global oil prices, the cost of crude-based ingredients has climbed steeply in recent weeks. This has pushed the cost on inks, coatings, adhesives and other chemicals essential for printing processes."Most printing inks and chemicals are petroleum-based. With the West Asia conflict impacting crude-linked supply chains, the cost of inks, coatings and other consumables has shot up," he said.Apart from inks and chemicals, laminate, tapes widely used in packaging, labels, cartons and premium print jobs has also become costlier. Industry members said laminate films, which are largely polymer-based and linked to petrochemical derivatives, have seen steady price increases following the escalation in West Asia. The higher laminate cost has further pushed up the overall cost of packaging and finishing.He said that the paper and board prices have also moved upward in the last few weeks. The cost of finished paper prices have risen by Rs 2-6 per kg, while kraft paper and duplex board, key materials for corrugated boxes and cartons have increased by Rs 3-4 per kg. These increases have directly impacted packaging jobs, which operate on tight margins and depend heavily on board prices.Printers said they had been absorbing cost increases for months in order to maintain client relationships, but the cumulative impact has now reached a breaking point. Rising costs of imported wastepaper, coal, freight and energy have added further pressure, compounding the effect of crude-linked materials.The OPA recently announced a unanimous increase in the prices of printing and packaging services in the wake of the cost of the increase in the raw material prices. "We have repeatedly absorbed the cost shocks, but the current 30-40 percent cumulative rise in raw material cost has made it impossible to continue. It is not about profit but survival of the industry," Parveen Aggarwal, President, OPA stated.