Friday, Apr 19, 2019
Industry & Trade | Asia-Pacific | Japan

The printing industry

In the midst of major turning point


2 years ago

Mr. Kotaro Morita, President of SAKATA INX CORP.
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Mr. Kotaro Morita

President of SAKATA INX CORP.

In this interview for the Worldfolio, Mr. Kotaro Morita, President of Japan-based Sakata Inx, gives his insight into the foundation and history of a century-old firm that expanded worldwide to become a dominant player in the ink business

How has Abenomics impacted Japan, and more particularly, your sector?

I believe that Abenomics has had its pros and cons. On the one hand, it has achieved short-term positive results, such as the stimulation of the stock market, etc. On the other hand, I believe that the true success of Abenomics can only be assessed from a long-term perspective, and it is simply too early to tell what its true impact has been.

We did see an incredible increase in foreign tourists, and it has boosted the demand for ink used from cosmetics to daily commodities.

The ink business is divided into two segments. First, the ink for paper media is used on magazines, newspapers, etc.  This market has been declining for some years now as digital media is taking its place. Second, the ink for packaging is used to print commodities, etc., and this market is experiencing growth. When looking at the overall picture, Abenomics has obviously given a positive effect to the ink business.

 

From a global perspective, the printing ink market is estimated to reach a soaring US$20.4 Billion by 2022. The United States represents the largest market worldwide by value sales, while Asia Pacific dominates it in terms of volume. What are some of the key drivers behind this growth?

As I mentioned before, with the effect of prints moving towards digitalization, we are seeing a decline in the ink market for paper media in Japan and developed countries.

However, if you look at the global ink market, the demand for ink is still growing. The market trend differs from market to market. To give you an example, the demand for newspaper is increasing in India.  Newspapers are cheaper and can contain larger amount of information than digital media.  This is a market that prefers newspaper. 

The packaging market is still growing. In terms of safety and security, we see individual packaging increasing in developed countries.

With the enhancement of living standards, packages are becoming more colorful and unique. The way packages are used is also expanding, which translates into the expansion of the ink market.

 

Your sales in Japan equaled 55 billion yen in 2016. Asia accounted for some 28 billion, North America 42 billion, and Europe over 7 billion yen. To complete your revenue, your company also added some 10 billion yen from its Digital and Specialty segment. What geographical markets have the highest potential for growth?

After Japan, our priority market is North America. We have 8 plants in the U.S. and 2 in Canada since entering the U.S. market in 1988.  We have 1,150 outstanding local employees.  We have integrated a system to develop and sell products locally, and we are supplying products that match the market needs on a timely basis. The U.S. is a large market that we see great potential for growth.

We started our Asian operations in the 70’s, with Indonesia and Taiwan, before expanding to the rest of the continent. We currently deploy business in 8 countries and regions. Inside the Asian region, we expect business to grow especially in countries such as India, Indonesia and Vietnam that are experiencing great economic rise. Our sales in Europe represent around 6% of our sales ratio. Europe is a huge market, but it is scattered with cultural and linguistic differences as local competition is also fierce. We want to further enhance our presence in Europe.

 

Your market is highly competitive, with companies such as Flint Group or Sun Chemical. What are the competitive advantages of SAKATA INX?

Our main competitive advantage is our human capital. We are a corporation of makers, and we have many employees that are technical experts. SAKATA INX operates in 18 countries and regions, and when we have to send human resources to an international base, we do not send a management figure like it is usually done, we send a technical expert that has the knowledge to understand the technicality of the market at hand.  Furthermore, we give a great deal of importance to client care and client support. We work collaboratively with our customers, and we always pay deep attention to their needs.

 

Because of the market’s growing technical demand, your company is known for developing creative technical advancements through its investments in R&D. Can you tell us what the ink of the future will look like?

We will continue to keep the ink business as our core business.  As the market is changing with the digitization of prints, we are making R&D investments in the areas of inkjet ink, new recording and display material, functional coating material, etc. For example, we are also developing pigment dispersions for color filters that are used on liquid crystal panels.  Liquid crystal panels are composed of the three primary colors of light (Red, Green and Blue) by color filters. The coloring composition for color filter is “pigment dispersion.”

 

Your inking solutions are used in the packaging of some of the world’s best-known brands. What makes SAKATA INX a printing partner of choice?

We are committed to always providing optimum technical quality with high customer care.  We are chosen as a printing partner from convertors and printing companies. It is because we have established a relationship of trust with them. Whenever I walk into a store and see a product that uses our ink, I feel very proud of our work and of our fruitful collaborations. For instance, the metal decorating ink that our U.S. subsidiary, INX INTERNATIONAL INK CO., manufactures is being used on the majority of all major beer and beverage brands globally.

 

In the future, will you be looking to attract more international investors to take stakes in your company?

The Public & Investor Relations Division is explaining our business to shareholders, investors, etc. Because we are a B to B company, the end users rarely know us. We want all sorts of people to know SAKATA INX. As our sales ratio is growing more and more international, we want to expand our IR activities to overseas, and not just remain within Japan.

 

As the president of a 120-year-old company, what legacy would you like to leave behind upon your departure?

During these 120 years, the management of SAKATA INX has been passed down from generation to generation.  I am the 13th president of SAKATA INX. Our company was composed of only four employees back in 1896, and today, it has grown into a global company with around 4,000 employees.  Today, the printing industry is in the midst of major turning point.  The ink business must react sensitively to the change in market needs.  I want to keep SAKATA INX at the front of technology that is first to bring products matching the needs of the market.

Last year, we acquired a Brazilian company to enter the South American market.  I want to continue to actively foray into untapped markets, and build the foundation of production and sales structure.


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