Battle lines drawn for high-speed inkjet press ink wars

Andy Tribute
Tuesday, November 1, 2011

With the arrival of high-speed inkjet presses that are capable of challenging offset printing in many areas, one of the comments I regularly hear concerns the cost of inkjet inks and the limited range of suppliers.

This may be about to change, after the issue was highlighted by a lawsuit that Kodak is bringing against ink manufacturer Collins Ink Corporation, alleging breach of contract.

Although some offset ink manufacturers, including INX and Sun Chemical, also make inkjet inks, few offset printers will have heard of Collins as, like many inkjet ink manufacturers, it only makes inkjet inks. In most cases these third-party ink suppliers work with the inkjet press and printer suppliers, co-developing and supplying ink to be sold by both. In the desktop market many of these ink manufacturers provide lower-cost ink cartridges, which are sold as an alternative to the OEM manufacturer’s more expensive cartridges.

In the wide- and super-wide format printer market there has been a major change in the market where companies such as Collins, Sun Chemical, INX Digital, Bordeaux Digital Printink, Nazdar and others are supplying ink directly to end-users as a lower cost alternative to those sold by the press manufacturers such as EFI Vutek, Fujifilm and HP Scitex. We are also seeing a range of very low cost inks coming into this market from Chinese manufacturers.

Collins Ink has had a long-term third-party arrangement to supply ink for the Kodak Versamark D-Series continuous inkjet printheads and presses. This contract dates back to a time before Scitex Digital Printing, which manufactured and supplied these printheads, was acquired by Kodak in 2004. Kodak also manufactures ink for these printheads, but Collins is the sole manufacturer of special spot-colour formulations. The contract allowed for Collins to sell its own branded inks to customers as well as supplying them to Kodak as exclusive seller of these branded inks.

However, this deal is about to end as Collins recently announced that it was terminating its contract to produce inks for the Versamark D-Series heads for Kodak and would only be supplying customers directly in future, in competition with Kodak. This prompted Kodak to bring a lawsuit against Collins, stating breach of contract as Collins failed to give Kodak the required 180 days’ notice of contract termination, thereby threatening Kodak’s ability to keep its Versamark customers adequately supplied.

Financial concerns
The reason behind Collins decision was stated to be to protect itself against Kodak’s deteriorating financial condition. Lawrence Gamblin, president and founder of Collins Ink, is reported to have said the following: "We can’t ship out inks not knowing if we’ll get paid. It appears very likely that we won’t get paid for production shipped to [Kodak]. If we lose $2m-$3m of receivables because Kodak declares bankruptcy, that’s a real impact for us."

Phil Faraci, Kodak’s president and chief operating officer, last week reassured that Kodak has no need of, nor does it have any intention of seeking, bankruptcy protection. Something he has also publicly stated to the world’s financial community.

Michael Marsh, a Kodak vice-president and general manager of digital imaging systems, indicated that there was no background for Collins’ decision and argues that Collins was unhappy at being excluded from supplying ink for the new Kodak Prosper press and S10 printhead business. Marsh stated that without Kodak’s technical support Collins would be incapable of developing inks for the Prosper system on its own.

Ink manufacturers create inks based upon specifications from the printhead manufacturer. These are then submitted for validation by the printhead supplier. This is what has happened in the wide-format inkjet market where printheads are predominantly supplied by manufacturers like Dimatix, Toshiba Tec, Xaar and others.

The wide-format printer manufacturers, with the exception of Epson and HP, do not make printheads themselves and the printhead manufacturers are keen to get as many inks as possible validated for their heads. For this they provide major assistance to the ink manufacturers in creating these inks.

My belief, having spent a great amount of time looking at the potential of a third-party market for high-quality inks for high-speed inkjet presses, is that it would be incredibly difficult for this to happen without significant support from the printhead suppliers. The suppliers of those presses that use third-party printheads, in this case from Epson, Kyocera and Panasonic, may see rival third-party inks being offered, but without the press manufacturer’s support in terms of providing print testing it would be very difficult for a third-party ink manufacturer to develop those inks. In the case of companies such as HP and Kodak, which make their own printheads, it is a near impossibility to create inks of the standard of the current inks from the press supplier.

Difficult formulations
Gamblin says Collins Ink has been working on ink formulations for Prosper for six months and intends to bring Prosper fluids to market. Since Kodak, with its huge R&D resources, has been working on inks for Prosper for around five years and has only just got them working well, this statement appears to be wishful thinking. Prosper inks are perhaps the most complex of all the high-speed inkjet inks, with pigment particle sizes less than half that of all the other suppliers’ inks, and with requirements for interaction with the substrates and drying at higher speeds than other press suppliers’ inks.

I believe Collins sees the potential market for inks for high-speed inkjet is huge and vastly greater than its diminishing market for Versamark inks. I estimate that a heavily used high-speed inkjet press could possibly generate around $3m of ink revenue for the press supplier per year. And with Kodak experiencing financial difficulties, Collins may think that now is the time to strike to try to force Kodak to release the R&D support to produce Prosper inks.
For Kodak’s future profitability and major revenue growth ‘ink is the new film’. As Kodak has all the ink manufacturing capacity needed for manufacturing all the Prosper ink requirements for the future, why would it give this market away?

I believe Collins is looking at the opportunity of starting a lower cost third-party ink business for high-speed inkjet presses as it sees its ongoing Kodak business diminish. I note it already has ink formulations for the Kyocera KJ4 printheads used by Océ and a number of other suppliers. It will be interesting to see if other ink suppliers also look at trying to enter this market.

This is not, however, the same situation as the offset market, where the only damage a low-quality ink will do is ruin a print job. A low-quality inkjet ink, as well as not producing a very good job, can also damage expensive printheads and possibly a press’s warranty.


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