Even as the printing industry faces declining volumes, Sussex-based Quad/Graphics Inc. consumes 250 million pounds of ink annually and the company says domestic suppliers aren’t able to provide the raw materials needed to meet its demand.
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Quad/Graphics' Sussex headquarters.[/caption]
To make it easier to continue manufacturing its own ink, Quad is seeking a foreign trade zone designation for its Hartford and Sussex facilities that would allow the company to pay a lower import duty on color pigments used in ink manufacturing.
The designation is similar to one a subsidiary of Foxconn Technology Group is seeking
for television assembly operations in Mount Pleasant. The Foreign-Trade Zones Board has opened a public comment period on the application by Quad and its subsidiary, Chemical Research\Technology, that runs through Feb. 20. Other area manufacturers, including CNH Industiral, Generac and Broan-NuTone, have also used the foreign-trade zone designation in recent years.
In its application, Quad says the U.S. has gone from a dozen suppliers of raw materials for ink in the 1970s to just two today. While the company has a “strong preference” to buy from domestic suppliers, those companies have told Quad they cannot meet the company’s demand of upwards of 10 million pounds of figment annually.
“The end result is clear, the domestic publication pigment/flush marketplace does not have the capacity to handle the full demand of the publication printing industry nor the willingness to increase production even when there is a willing buyer,” the Quad application says.
The company says it has no choice but to look to foreign suppliers for raw materials, but the current import duties favor importing finished ink. The raw materials face a 6.5 percent duty while ink faces 1.8 percent.
Starting in the 1980s, Quad brought its ink manufacturing in-house and expanded those capabilities in the 2000s. CR\T, the subsidiary responsible for manufacturing Quad’s ink, employs 165 people at five locations around the country, including 87 in Hartford.
CR\T supplies Quad’s network of 57 printing plants in the U.S. and has the capabilities to supply the company’s foreign plants as well. The subsidiary only supplies to Quad facilities and doesn’t compete with other ink manufacturers.
Quad says approving the foreign-trade zone would enable the company to keep ink manufacturing operations in the U.S., but if the current incentive structures remain in place “domestic ink manufacturing operations could be in jeopardy.”