Wide Format Imaging

No one in the industry has failed to note rising wide-format consumables costs over the past couple years. The surging price of vinyls, films and inks is nothing short of a threat to the continued profitability and even existence of some print shops.

Many of these consumables use petroleum products as key components, and therein lies a big problem. During the May 2000-to-May 2006 time frame, a period that witnessed the Consumer Price Index (CPI) climbing 18 percent, the price of refined petroleum products skyrocketed 146 percent. Rapidly industrializing nations like China and India are vying for oil and natural gas supplies, and for the products resulting from those raw materials. But the oil supply-and-demand picture is only part of the issue.

In this article, Wide-Format Imaging examines the factors behind these alarming raw materials cost increases. More importantly, it examines strategies print providers may utilize to absorb the higher costs without endangering their profitability.

Oil Slick

Most suppliers of wide-format consumables like film, vinyl and ink agree there is one overarching factor behind the price increases, and that factor is oil prices.

"Almost all these products are tied back to the price of oil," said Mark Kramer, president and CEO of Boca Raton, FL-based Laird Plastics. The company sells printable substrates and serves as a middleman. It buys in bulk and adds value by maintaining local inventory, cutting and sizing material to dimensions required by customers and providing multiple products to customers based on their needs.

Kramer notes that when oil goes from the $30 to $35-a-barrel prices of a couple years ago to more than double that cost, materials made from oil are going to be adversely affected. "You have a natural pressure on pricing," Kramer said.

At Neschen Americas, an Elkridge, MD-based manufacturer of overlaminates and mounting adhesives, as well as self-adhesive vinyls, laminating machines, textile media and solvent printers, director of marketing Angie Mohni said price increases are largely based on the fact that the chemical infrastructure behind all adhesives and films, such as PVC, polyester and polypropylene, is based on natural gas. "Natural gas pricing per thousand cubic feet has essentially doubled since the year 2000," Mohni said. "That's what's really driving these increases across the board. It hits everything."