I.T. Strategies Studies UV-cure, Roll-to-Roll Printers

Liz Logue, an I.T. Strategies Inc. (ITS), Hanover, MA, senior consultant, has compiled and written a knife-edged report – “Future of Roll-to-Roll Printers” – that regards the future market of UV-cure, roll-to-roll printers. Even more, her report’s comparative nature forecasts a possible declining use of solvent-based printers and inks. Liz ques¬tions the continuing popularity of solvent inks and printers in light of present-day (heightened), environmental interests and safeguards, even though, she writes, UV-cure inks also have shortcomings.

I.T. Strategies Inc. (ITS) is an established, research and consultancy firm with offices in Boston and Tokyo. It serves the digital-color printing markets by providing research, surveys, data and analysis, plus interpretation, advice and opportunity identification for solu¬tion-seeking companies.

Liz and I.T. Strategies have allowed me to review their report. Because of space limitations, I’ve presented only partial information. You can purchase a full copy from the company (www.it-strategies.com).

Liz graduated from Simmons College, a school that lies southwest of downtown Boston, between Harvard’s Medical School and Back Bay Fens. Both U.S.News & World Report and the Princeton Review have recognized Simmons as a “Best College” choice. Liz’s degree is marketing and finance, an interesting and almost opposing blend. Her marketing- and finance-school insights reveal themselves in the report.

UV-cure inks’ success

Before the introduction of flatbed printers, primary print-machine manufacturers commonly offered roll-to-roll, solvent-ink printers that applied aqueous-, solvent- or eco-solvent-based inks. Flatbed, UV-ink printers have already gained notable success. From their introduction six years ago, the UV-cure flatbed market has grown from zero to almost $1 billion. They’ve affected – or, at least, begun to affect – the direct-to-rigid substrate print market formerly dominated by screenprinters. The flatbed printers have also simplified many signmaking tasks, especially POP.

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I.T. Strategies’ research, Liz reports, indicates UV-cure, roll-to-roll printers could cut into the solvent-ink and printer market over the next five years, although only 11 UV-cure, roll-to-roll printer models currently exist, compared to some 200 solvent-ink printer lines.

Liz says the installed count of UV-cure, roll-to-roll printers (those using polymer-based inks cured by UV light) could increase from a 2006 base of 199 printers to 1,300 by 2011, a 46% compound annual growth rate (CAGR). The accompanying hardware, ink and media CAGR revenue would increase by 36%, ascending from $121 million in 2006 to $560 million in 2011.

Part of this gain could come from market growth, and part could come from solvent-ink and printer-market cannibalization.

In 1999, solvent-ink-based printers’ average hardware price was $340,000. By 2006, it had cascaded to $188,513, even with notable, industry-wide, speed and quality improvements, the report says.

The marketplace

Obviously, the future growth and success of wide-format, UV-cure, roll-to-roll printers relates to the marketplace: the demand of end users (prompted by profitable applications and other influences) and manufacturers’ willingness to create factory and marketing infrastructures.

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Liz says vendors often build prod¬ucts because they believe end users will buy them. Other motivations, her report says, include the ability to sell higher-priced UV-cure inks, once a printer is sold, with limited competition from aftermarket ink makers. It also lists competitive differentiation: the size of the solvent-printer market (projected to exceed $500 million by 2011, in hardware and ink sales) and the ease of leveraging solvent printers’ roll-to roll design.

The last category rings quite true. Print-machine manufacturers can (do) re-use frameworks, components, drives, electrical systems and more, to change over or upgrade a machine. Machine transformation from solvent- to UV-cure inks is relatively easy – only the carriage, lamps and ink systems are dissimilar.

Still, each motivation has a caveat. Although few companies produce UV-cure inks, Liz writes, the accompanying higher ink prices may also dissuade buyers (even though UV-cure printers are said to apply less ink per print than solvent printers).

Also, competitive differentiation, in the form of fewer offered products, can flow two ways, because high-count manufacturing produces lower selling prices. Finally, a large, solvent-ink-based, printer-installation base exists, and firms tend to resist change.

Inks vs. profits

Because UV-cure inks are difficult to design and blend, the UV-cure ink aftermarket selection is limited. This (possibly time-limited) characteristic establishes a competitive barrier for UV-ink producers.

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Liz says machine manufacturers encounter hard-hitting competition from aftermarket solvent-ink sellers. The average solvent-ink price, she reports, has fallen from $70 per liter in 1999 to $30 in 2006. Comparatively, UV flatbed/combo inks run $150-$200 per liter; UV roll-to-roll, $60-$90. Her report says declining consumables revenue may cause manufacturers with existing, solvent-ink installed bases to counterbalance declining ink sales by launching UV-cure printers that compete with their solvent-based printers.

She speculates that an astute printer-manufacturing company could increase profits by trading a portion of its solvent-installed base for UV-cure, roll-to-roll products, thereby gaining revenues through the sale of higher cost/profit inks.

Manufacturers can also reduce competition through differentiation (although marketing a new product is both difficult and costly). A 2006 I.T. Strategies survey counted more than 200, large-format, solvent-based printer products and 20 UV-cure roll-to-roll. Marketing 101 teaches it’s easier to differentiate – set apart – newer, less available, products.

Environmental concerns

The report says end users perceive UV-cure inks as more environmentally and health friendly. On this, Liz writes, “This may not be a true statement, but it is the perception of end users and thus a driver of possible replacement of solvent printers with UV.”

It’s no secret that solvent inks can contain such chemicals as cyclohexanone and benzene, both governed in use by the EPA and various health regulations (benzene may be linked to leukemia and other blood-related diseases). But, Liz’s report says, due to the absence of appropriate education and the digital-print industry’s comparably small size, these offenses pretty well fly under most regulatory agencies’ radar.

This may change, she cautions, because greater environmental concerns appear to be sweeping the United States, Europe and Japan.

She also says UV-cure inks may not provide a better environmental/health solution. UV inks come in two forms: free radical (the most common) or cationic. The former’s used in almost all, available, digital, UV-cure ink. Trouble is, free-radical, UV-cure inks have a photo-initiator that enhances the curing process, but also creates a lingering, unpleasant odor.

Liz acquired other cautions from the University of Stuttgart’s study on UV printing inks. She prefaces this list by saying ink producers can eliminate or reduce some of the listed problems.

• UV-cure ink photo-initiators are carcinogenic and may be linked to other medical issues;

• Acrylate monomers may cause skin irritation and allergies;

• Invisible, ultraviolet radiation is detrimental to the skin and eyes; and

• The UV radiator produces ozone.

Other barriers may be buyers’ preference for combined (flatbed/roll-to-roll) UV-cure printers or increased, solvent-ink printer efficiency. An unexpected reduction in solvent-ink VOCs or rapidly declining solvent machine and ink prices could also affect buying decisions.

Users’ observations

I.T. interviewed more than 100 end users in late 2006. These operators reported some disadvantages in their UV-cure, roll-to-roll systems (when comparing them to solvent and UV-combo systems): less-flexible and higher-cost inks, less ink adhesion and lower gloss levels, for example.

Still, UV-cure printers have distinct advantages. A buyer can expect increased (comparative) productivity, fewer environmental issues, broader media choices, less direct competition (by process type), reduced ink consumption, less ink migration and white-ink application.

Liz’s report says end users can expect increased productivity because UV-cure processes require less overall job time. A solvent print requires time and space for drying; UV-cure prints are ready to package, off the machine. This print-and-ship property also places the UV-cure, digital-print process closer to screenprinting. Which, she suggests, but doesn’t prophesy, may feel the biggest impact, as newer, highly productive, UV-cure, roll-to-roll printers go head-to-head with screenprinting products.