Ink giant warns of 'testing' year ahead

Overcapacity and further price increases will continue to be on the cards during a "testing" 2009, according to ink company Stehlin Hostag.

However, managing director David Ward has said the greatest threat to the print market next year will be bad debt, which will be particularly difficult during the first four months of the year.

He said: "With insurance companies being more and more conservative in their approach to the printing sector, this can only mean more pressure on cash flows."

Ward added he would like the government to set up legislation that gave more accountability to company directors and restrictions to stop directors of failed companies starting up new businesses almost the next day.

"There is still overcapacity in the market and until that changes we will always be under pressure."

Ward also said the exchange rate remains a "huge issue" for the inks market as it imports many of its products from Europe.

He said: "This obviously puts tremendous pressure on pricing levels so price increases are going to remain an issue certainly for the first half of 2009."

However, while 2009 will challenge the traditional supplier-customer relationship, Ward said there are opportunities for those that deliver high quality and tangible added value.

Stehlin Hostag is developing project management software to launch in January, which will focus on identifying where costs can be saved. It claims to have more than 50 case studies showing that savings can be made when it comes to the supply of ink and consumables.

He said: "Instead of just beating each other up for a few pence per kg, we have to look beyond at the bigger picture.

"Anyone can deliver an ink at a price, but really harnessing the potential savings within that ink is a different matter altogether."

Headquartered in Nottingham, Stehlin Hostag has 135 staff and recorded a turnover of £32m in 2008. Its markets include the sheetfed, UV, heatset, water-based flexo, coldset, blankets and consumables.

Founded in 1983, it became part of the Huber Group in 2001.