High Performance
Pigments Update
How are suppliers of HPPs dealing with record
feedstock and fuel price increases?
BY KERRY PIANOFORTE
ASSOCIATE EDITOR
Suppliers of high performance pigments (HPP) for
the coatings market must continue to deal with the
onslaught of record feedstock and fuel costs. As it
seems there is no immediate end in sight to these
increases, high performance pigment suppliers must prepare to weather another rocky year.
“Oil has an affect on almost everything that we do from
freight and packaging costs, to raw material and energy
costs,” said Andrew Edwards, director of global ink marketing, Silberline. “Just consider the inflation of prices
everyone is seeing at the filling stations for their cars
and at the supermarket for their groceries—the special
effect pigment market is experiencing the same pressures. With analysts disagreeing on which direction the
price of oil will head over the next 12 months and the
global community already having to deal with prices double those from September 2007 there is a significant level
of uncertainty of what the future holds.”
“A number of issues are affecting pricing and supply
issues in the market,” said Mehran Yazdani, vice president,
marketing, performance pigments, Sun Chemical. “First,
the price of raw materials continues to increase at an
unprecedented rapid pace since it is driven by energy and
the availability of raw materials. Second, the cost of pigments and raw materials from China has risen significantly due to the elimination of the refund of the value added
tax for exported pigments. Third, environmental constraints on manufacturing in China are being exacerbated
by the upcoming Summer Olympics in Beijing. As an example, there has been a 100% increase in export duty for phosphorus, the feed stock for manufacturing quinacridones.”
“We believe that the many challenges facing high performance pigment producers are well known, such as rising intermediates and basic chemicals, all sources of energy and increasing regulatory matters with REACH,” said
Don McBride, COO Heucotech. “But what has become a
very key issue is the supply of critical raw materials to
keep our facilities supplying quality pigments to our customers. The change in perspective with respect to environmental and regulatory issues has affected the main
source of basic raw material and key intermediates from
Asia. There exists a tightness of specific ingredients that
has not been felt in our industry and that is giving way to
a general uncertainty about supply.”
Heubach is active with committees in Europe with
respect to REACH and its affect on various industries.
“This initiative is very time consuming as well as expensive, but is necessary to supply products to the European
Union and part of being global in nature with manufacturing sites in three continents as well as customers,”
said McBride. “The downstream focus of our supply bases
continues to be of more importance today.”
Another challenge is to secure a steady and consistent
supply of intermediates for production of high performance pigments.
“With the rising requirements in environmental laws, not
only the cost of major raw materials drastically increases
but in some cases the capabilities dwindle,” said Falko
Orlowski, business manager for coatings, Clariant. “This
creates irrational demands in the marketplace which are
difficult to mange. Further increasing fuel and transportation costs, in addition to a weak U.S. dollar, are creating
urgent needs for price increases in the marketplace.”
“Our biggest challenge has been dealing with extreme
competitive pressure from all sides to reduce product
costs,” said Kiyotaka Kido, specialty pigments and dispersion division, color materials business, Toyo Ink. “We
emphasize competition based on quality and performance
differentiation, not just a price-based one. Sales of high
performance pigments continue to rise as they deliver
outstanding value without compromising on product performance. It all comes down to performance for value.”
In order to survive during these challenging times high
performance pigment companies not only need to effectively raise prices, but they also must balance out these price
increases with innovative technologies and services that
will help their customers reduce a company’s overall costs.
“The unprecedented raw material and energy increase
force market leaders and their competitors to aggressively
move pricing to ensure financial viability,” said Michael
