To Preserve Ink Manufacturing Jobs, Quad Seeks FTZ Designation

From an outsider’s perspective, things seem to be going smoothly for Quad/Graphics, considering it consumes 250 million pounds of ink per year, according to an article recently published by BizTimes.  However, therein lies the problem because “domestic suppliers aren’t able to provide the raw materials needed to meet its demand,” BizTimes reports.

Quad manufactures its own offset and gravure inks and, although there are two domestic suppliers of raw materials still in the U.S., the two companies have informed Quad that they are unable to provide the large amount of pigments the printer needs annually, which are the key raw materials needed for its ink manufacturing, Claire Ho, manager of corporate communications, Quad/Graphics, told Printing Impressions in an email.

Ho explained that because the types and quantities of the pigments needed cannot be obtained in the U.S., the company is compelled to import ink pigments under a foreign trade zone (FTZ) designation for its Hartford and Sussex, Wis., locations — of which Hartford is an ink manufacturing facility. Ho says that the FTZ designation will ensure that it is not “penalized for conducting manufacturing in the U.S.A” and will reduce the cost of raw materials needed to continue to manufacture inks in-house, which Ho said “will provide us with necessary resources to invest in our business and our employees.”

Unfortunately, without the FTZ designation, the current tariff system favors importing finished inks, BizTimes explains. Ho said that Quad would end up paying a 1.8% tariff on finished ink, versus a 6.5% tariff on the raw materials. Therefore, the FTZ designation is crucial because the current tariffs drive up costs to manufacture products in the U.S. if the raw materials aren’t available.
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