Initial Opinion of the Printing (Offset, Gravure, Screenprinting) and Flexible Packaging Industries on the EU new "Chemicals Strategy" and REACH system

the issues of concern

The White Paper on the new Chemicals Strategy prepared by DG Environment and DG Enterprise has been considered with great attention by INTERGRAF in co-operation with sister organisations representing some specific market segments of the printing industry, ie European Rotogravure Association (ERA), Fespa (Screen Printing Association) and Euroflex representing the printing activity in the flexible packaging sector.

The joint analysis made by these associations on the expected impact - as it can be identified on the basis of the White Paper - on the assumption that the final legislation will confirm the planned provisions - leads to the following initial conclusions :

1. CONCLUSIONS RESULTING DIRECTLY FROM THE LEGISLATION

· The above mentioned sectors will be affected as downstream end users of chemicals, and will have to supply information on conditions of use and possible modification of chemicals made by companies of these sectors. The precise scope of the information to be supplied can so far not be clearly identified.

· The scope of the obligations with regard to the supply of information is a key factor in assessing the real burden on companies and the trade associations representing them at national and European level. Such an identification is indispensable to assess the expected administrative and scientific involvement and resulting burden.

2. CONCLUSIONS RESULTING FROM EXPECTED MEASURES BY UPSTREAM SECTORS AND MANUFACTURERS

These conclusions are based on the CEFIC (Chemical Industry) and CEPE (Ink and paint makers) forecasts of the socio-economic impact of REACH.

As a result of their initial assessment, CEFIC and CEPE indicate that they expect unaffordable administrative and scientific costs from complying with the new legislation on the complete range of chemicals which they place currently on the market. They expect that these costs will be particularly unaffordable for small volume speciality chemicals.

In order to reduce costs, it is expected that the chemical manufacturing industry will either not register these chemicals, or withdraw them from the market. If the production of these small volume speciality chemicals is judged indispensable, and all necessary measures are taken to continue their production, it is expected that the engendered costs will be reflected in their sales price.

CEFIC indicated that according to their assessments the product groups expected to be most affected by Reach are products used by the Printing and Flexible Packaging sectors, ie : dyes/ pigments, adhesives, electronic chemicals, essential oils, photographic materials, basic pharma products, inks.

CEPE, representing the second downstream manufacturing sector supplying chemicals to our sectors, mentioned that one of their early conclusions was that 50% of the exceeding 10,000 different chemicals used in inks and paints may not be registered or no longer be put on the market by upstream chemicals manufacturers. These substances would than either have to be registered by the ink or paint manufacturer, or need to be replaced.

Considering the fact that most inks are de facto low volume products, it is to be expected that substitution will be intensively used, and that the composition of a very large proportion of the inks will have to be changed. The consequences will be economic and technologic. This will probably also apply to many special adhesives and varnishes, used on a large scale in the printing and flexible packaging industry.

3. ASSESSMENT OF SPECIFIC IMPACT ON INDIVIDUAL SECTORS in the printing and flexible packaging sectors

Within the printing and flexible packaging industry some sectors will be more affected than others.

The nature of the printing work carried out in some segments requires the use of inks consisting of many different inks, or of varnishes and adhesives will appear to be the most vulnerable segments of the industry. This will certainly apply to screen printing, security printing, and the flexible packaging industry.

It is exactly in these sectors that after each change in the composition of the ink, varnish, or adhesive, the "quality" and "performance" of the new product has to be tested extensively.

The testing has to investigate on the one hand whether the new product offers acceptable technical properties and runs well on the machines. Equally, or even more importantly is, however, the need to check whether the product still answers to all the customer requirements and the commercial specifications, even those requirements that have never been put in writing in a commercial contract, but are part of the normal customer satisfaction features.

In case of non-satisfaction, additional measures and many cross-checks, new prototypes and further modifications to the new ink, varnish or adhesive, or possibly a completely different product may be needed.

In flexible packaging alone some 120 different possible customer requirements, 24 different groups op substrates and 11 different printing techniques can be distinguished; and that only after serious simplification of the subject.

This task is certainly enormous, very costly, and may have serious market implications for printers at a time when their products are jeopardised by other market developments.

It appears to INTERGRAF, ERA, FESPA and EUROFLEX that there are at present insufficient data available to make an accurate estimate of the expected impact. The industry has however experience of other situations which involved substitution.

The case can best be illustrated by the substitution of solvent based ink products by water based ink products in some industry segments. Based on a few real and well documented cases taken in flexible packaging sector, the substitution of one single varnish can cost between € 25 and 50.000 in laboratory time, production tests, customer tests etc. These requirements come in addition to the cost that will be incurred by the manufacturer of the changed product. A medium sized flexible packaging printer, employing some 200 persons is likely to use as many as 40 different varnishes, adhesives and ink-types.

As a general rule the typical SME structure of the printing and flexible packaging industries has no limiting effect on the number of chemical substances used, maybe on the contrary since they are often involved in niche markets.

A medium sized screen printing company will employ less than 10 persons. Especially the many small non-specialised screen printers will use as many different inks as any large flexible packaging company.

The variety of products used and the number of different customer requirements in security printing cannot be described at this stage. Apart from the cost and time involved, there are also other relevant issues. In the security printers business, secrecy will be an issue. It does not seem wise to create a public database in which a number of substances are labelled to have ‘printing of banknotes’ as one of their intended uses.

In the flexible packaging industry, food contact legislation is important. Not only EU directives, such as for plastics apply, but also Council of Europe Resolutions and EU Member State and US FDA legislation. All this legislation and regulation will impose severe restrictions when components of inks, varnishes or adhesives need to be substituted because of a lack of registration.

In both security printing and flexible packaging, very special inks, varnishes or adhesives are sometimes manufactured in house. In these cases these companies will, just as the large manufacturers of similar products, need protection of their intellectual property.

It is clear that the impact of Reach on certain parts of the printing and flexible packaging industry will be very significant. In order to estimate the impact with some accuracy and perhaps propose methods or tools with which the impact can be reduced, a thorough study would be needed.

For Intergraf, Euroflex and ERA

November 2002