What is the Future of Industrial

Digital Printing?
May 2015 Market Review

This is a review of the status of industrial digital print markets as of May 2015. This review is intended
to define, size, project and provide examples of the development of markets for digital print technology
beyond the office and consumer sectors.

Definition of Industrial Digital Print

Industrial digital print can be defined in two distinct ways:

1. Industrial-Scale Print
Industrial can mean any markets which have scaled up significantly beyond the small-scale
technology we are used to seeing in the office and consumer sector, including
communications print or ‘print media’ as the analog print industry calls it, as well as the true
‘industrial’ markets defined under (2) below.

2. Manufactured Products which are Printed

Industrial more usually means a specific set of markets and applications for print and
patterning of manufactured products like corrugated packaging, folding carton, wide format
display graphics, flexible packaging, 3D objects (print-to-shape), architectural surfaces,
ceramics, textiles, electronic circuits, creation of 3D rapid prototypes & custom parts to name
some of the better known.

Mostly people are interested in the specific industrial markets under (2) above, but it is important at
least at first to consider (1) and its print communication or document printing markets as well because
for one thing the new digital document/communications print markets are creating a new kind of user
and value that is well-insured against the decline of print media, and for another thing, because they
are technology platforms for the development of systems which are already being adapted to true
industrial markets like packaging whose print specifications build on those of the document market.

Digital Print Vendors’ Stake in Industrial Print

The digital print industry is supplied by less than 100 vendors globally, many of which are in Japan,
with total revenues for systems, technology and imaging chemistry of something just north of $110B.
They are very large investors in very costly hi-tech imaging science in basically two core technologies
– Electrophotography (EP) (laser printing) and Inkjet, but by the same token they also make very
handsome profits from the chemistry consumables they mostly quasi-captively sell to their customers
after first selling the print system.

These vendors all have a problem, however, and that is that they are all heavily invested in office and

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consumer markets which, while still very profitable, are mature and in decline. In fact more than 85%
of their revenues fall into this classification. This is driving these mostly public companies to seek new
and scalable markets with great urgency.
In their search for new markets the digital vendors are evolving what they already do very naturally
from ‘office-scale’ to ‘industrial-scale’ communications or document print markets. They are also in
some cases getting into the early development of true industrial print markets for ‘manufactured
products which are printed’ with their own products. Beyond that they are providing technology directly
and indirectly for third parties to develop on their own behalf into true industrial print systems –
printheads, print engines and integration support. Those third parties can be independent system
integrators who re-sell systems to the market based on technology the obtain from digital print
technology vendors or their distributors, or else single companies developing systems for internal use
(‘closed loop’ developers). Integrators sometimes also assist closed loop developers under contract.
This is a schematic and simple quantification of the supply flow:

Digital Print’s Industrial Value Propositions

Digital print in true industrial markets is not called on to do a better job of what analog print already
does. Analog print does a great job in terms of product quality and cost against a huge variety of
specifications. But there are some things only digital can do well, and those are the building blocks of
parallel and new markets in the industrial segment.

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This is a simplified table of what are already today perceived as unique digital print value propositions
in the industrial segment and we have ranked them in descending order of importance according to
our own user research in early industrial implementations:

To give a couple of examples of what this can mean in real life, in the case of cost reduction, this has
meant so much to the ceramics tile printing industry that they have already gone substantially towards
full substitution of analog with digital systems. In their case this has to do with a very expensive and
cumbersome imaging system in analog print, and one which required an integrated kiln line to be
interrupted in its normal production rhythm. That can cause substantial damage to the line if not
closely managed. Digital removed these issues at a stroke.

Fast response in turn is a massive advantage to the fashion printed apparel industry where under
normal conditions analog print can involve a six month lag between design presentation and arrival of
saleable product at the retailer – and that in an industry where fashion is the driver and timely
response is directly measured in higher prices and volumes. Digital production apparel print can bring
that lag down to two weeks.

3D creation of manufactured objects using digital printing in its turn allows customized and small
volume manufacturing of functional objects previously out of economic reach for the new users 3D
printing is drawing in. That is nothing less than a new and potentially very large user group leveraging
what are in effect new products. The same is true of the digital photo album which is unobtainable
except via digital printing and which has in some ways supplanted the old 4x6 photo market, and at
very high consumer pricing values. In a similar way display graphics available to the local retailer in
minimal quantities is also a new product and market among people who did not buy graphics before –
in this case a new market that grew to exceed $45B in retail revenues for print after only 20 years from
scratch.

But perhaps the biggest long-term value proposition for digital industrial printing is in the packaging
sector. The ability over time for digital printing to provide custom content in the brand identity
communications market, which is what packaging really is, is to bring the massive packaging
conversion market into synchronization with increasingly fragmented demand patterns. While the
packaging conversion industry worldwide has spent 30 years perfecting higher and higher integrated
print/manufacturing volumes at lower and lower costs, the pattern of demand has been going in the
opposite fragmenting direction. The meaning of this for consumer goods brand owners is incalculable
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over the long term. That is actually going to take a long time for a variety of fundamental reasons
relating to technology and supply chain bottlenecks, but it is the biggest industrial digital printing target
of all, and will likely be its most profitable field.

Market Size & Projection by Industrial Application

We have split out digital revenues for hardware and chemistry by individual industrial applications, and
we have also included 3 document ‘industrial-scale’ sectors. We have projected these forward to 2020.
Additionally we have estimated revenues for print providers’ who use this digital technology derived
from selling the printed output to final users. These print provider revenues also include revenues for
conversion and manufacturing. Against that we have set our estimates of expenditures by final users
in the same sectors for analog-printed output. That allowed us to compare digital final user revenues
against analog final user revenues and derive a comparative share for digital.

We are in reality understating revenues for digital because we have no way of allocating accurately by
application closed loop companies expenditures ($2.2B est.) and independent integrators’ revenues
($4.5B). True industrial markets are marked in red.

It will be noticed that by enduser revenues digital print already has a 7% ‘penetration rate’ in 2014
rising to 9% by 2020, for an overall growth 2014-2020 of 36%.

If we were to calculate the share digital has of area printed compared to analog the shares would be a
lot lower – quite small in fact. That tells you that the pricing for digital output is high. That is because of
course digital print is more expensive than analog, but above all it is because digital value propositions
bear a high price among users because they offer very significant economic benefit of some kind
beyond the simple print cost. This kind of pricing will inevitably suffer some degree of attrition as
volumes go up and as digital print becomes mainstream next to the low-cost analog world, so
therefore print costs themselves for print providers will have to be reduced. That does not however
mean that digital print should or must follow the commoditization practices of many analog markets.
Digital does offer the opportunity to re-cast the value and pricing model even over the long term.

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Digital Print Technology Development Status
EP
The major available digital print technologies are Inkjet and EP. EP is mostly available in dry toner
format, but HP Indigo is liquid format ‘Electroink’. Liquid EP is said to be and by many believed to be
potentially faster and higher quality due to the technology’s capability to develop an ink film close in its
characteristics to analog ink films.

Inkjet
On the Inkjet side most available Inkjet deploys aqueous inks with very high water content and low
viscosity mostly dictated by head construction and design. There is some UV-curable Inkjet
technology, but it has not been developed to the print quality levels of EP or aqueous Inkjet yet and is
available from few sources. Inkjet in general is perceived correctly to be simpler than EP and more
easily capable of deploying extended widths and attaining higher speeds (with the implications of lower
costs). But given that most industrial markets are very new and capacity utilization of digital systems is
minimal, that speed disadvantage of EP may take a while to assert itself.

Aqueous Inkjet
The most pressing issue for the perceived technology-of-the-future, as aqueous inkjet in particular
might be described, is its ability to print at high speeds at high coverages (40%+) on closed-surface
substrates like film and coated paper if it is to make serious progress in document and industrial
markets. We could be looking at 4-5 years until the issue is behind us. This will not stop aqueous inkjet
for industrial markets, but it will cause a slow level of adoption in any markets not using simple
uncoated paper (which is where it is successful now on an industrial scale in books and transactional
markets).

LANDA
An exciting but hard-to-assess alternative to EP and Inkjet is Nanotechnology from LANDA. Without
getting into too much detail here, this technology is essentially a form of inkjet with highly specialized
integration and chemistry which claims to be capable of mid-range speeds by analog standards and
eliminates the water issues of Inkjet while still using aqueous inks. It is a kind of ‘ink lamination’ system
and it is from Benny Landa, and anyone who wants to underestimate his capabilities to realize
revolutionary change is taking a risk. If this technology works it could be a serious challenge to
aqueous Inkjet.

This is a quick comparison of average median specs for different technologies available today for
industrial markets:

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Digital Acceptance in Industrial Markets
In many industrial markets it will be essential for digital print technology to gain the technical and
economic acceptance of the existing analog-oriented market because where, as in all true industrial
markets, the printed product is also manufactured, with print really being a stage of manufacturing, the
print part will be technically and economically subordinated to the manufacturing part. In many cases –
as in most packaging for example – that will mean the closest possible approach to an in-line system
to fit with existing manufacturing plant. That in itself will be a tough goal to achieve. But it is worse than
that. Experience says that the existing industry will start out by refusing anything that disturbs in any
way the finely balanced mechanism that their present in-line print/manufacturing system represents.
Essentially a refusal to compromise and experiment, let alone invest.

That negative attitude fails to serve the brand owner customer of the packaging conversion industry as
his fragmenting demand patterns get more and more out of sync. with packaging manufacturing
economics. But the brand owner is in most cases not in a position to have any different expectation of
the converting industry due to a lack of perspective on the potential of digital print. This all represents a
Gordian knot of difficulty in getting digital’s foot into the packaging door. Similar situations pertain in
other industrial markets. The situation is capable of remedy as the label market has shown. Basically it

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is a matter of time and resources in the big picture, and that tends to hand advantage to larger
vendors. Again, we cite the label market as an early precursor of this development pattern. It is a
market which has been nearly twenty years in the making and it is only in its early acceleration phase.

This situation of channel block on top of the need for digital print technology to up its technical game
for many industrial markets unavoidably will slow market development in the early years to a large
extent.

This is a graphical representation of the channel issues which we have described:

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Industrial Digital Print Field Reports
We offer some selected analysis of early implementation of industrial digital print in illustration of real
experience in this now established segment.

Corrugated Packaging
Printing of Corrugated
There are three print quality levels deployed in the printing of corrugated board:

• Basic Flexo Quality

1-4 colors for line work with some tone gradation. 'Good Enough' accounting overall for
something like 70%-80% of corrugated board print. This is printed mostly in-line on conversion
presses (slot, slit, diecut, fold, glue). Sometimes there is offline printing. In the case of pre-
print, where the topliner is printed in a roll prior to lamination to the singe face corrugated
construct the print is always offline yielding a two-stage process.

• High Flexo Quality

1-9 colors printed on enhanced flexo presses generating a high print quality standard
somewhere approaching offset standards, but not achieving them fully (nor needing to). This
accounts overall for up to 20% of all printed corrugated. This is printed mostly in-line on
conversion presses (slot, slit, diecut, fold, glue). High flexo quality is driven by the expanding
use of corrugated packaging in the retail environment.

• Highest Litho Quality

For exceptional and specialized cases driven by design or brand image highest quality offset
print is contracted out on white liner paper for subsequent lamination in sheets to corrugated
sheets (litho lam), Part of this is also undertaken in the form of pressure-sensitive labels. Litho
lam yields a two-stage process and accounts for up to 10% of all corrugated printing. For most
high quality retail corrugated flexo high quality is good enough and offset quality is not
required.

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Print Processes used in corrugated are explained diagrammatically below. There are three basic
processes:

• Flexo Pre-Print
pre-printing top sheets with continuous web flexo presses after which the top sheet is
laminated to single wall corrugated construct in reel or sheet format prior to the secondary
conversion process (slit, slot, glue, fold). This process is used to provide high print quality in
larger volume. There is also a small amount of web offset pre-print done, though this is most
common in Asia. Pre-print was the first major initiative to permit high quality corrugated print in
reasonable volumes (ie: at a good economic cost point)

• Flexo Post Print

Post-print (meaning print after (post = latin after) the manufacture of the final corrugated
laminate construct) of the 2 wall corrugated construct is deployed for basic quality printing of
the large part of all corrugated. But it is also deployed for high quality print using specialist
flexo presses optimized to be able to print at specific sustained high quality on the full
construct without crushing it or generating washboard print variations from varied pressure on
underlying flutes and voids. This process is undertaken in sheet format and is a lower cost
system relative to high quality from pre-print, as it cuts out the lamination stage of pre-print. It
is usually done in-line with conversion on a single system.

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 • Litho Lam/Label
Litho Lam/Label has been deployed historically where very high offset-type standards of print
have been required on corrugated packaging. It was not in the past physically possible to print
at such high quality levels inline onto a final 2-wall corrugated construct, and that necessitated
printing a white sheet or label offline, and then laminating the print to final 2-wall corrugated
constructs. Litho Lam refers to the printing of a white sheet laminated over the full area of the
corrugated sheet, and Litho Label refers to the lamination of a printed white label to part of the
area of the corrugated sheet. Litho Lam is often out-sourced to general commercial printers
and is relatively costly beyond short runs. Today Specialist Flexo systems (so-called ‘post-
print’ systems) have managed to achieve near-offset print quality in an inline/near-line format
on final 2-wall corrugated construct, and the share of post-print in the high quality 4c+ sector is
growing.

Digital Opportunity
Existing Systems Printing Corrugated

At this time the only real digital presence in the corrugated market is flatbed UV Inkjet from wide format
graphics vendors. These systems are used largely for packaging sister (and much, much smaller)
market corrugated display at retail. Such systems have become very productive with near-fixed arrays
allowing speeds well over 4,000 square feet per hour at maximum rate and in one case as high as
13,000 square feet per hour. These systems from companies like INCA, EFI-Vutek, HP and Durst and
some others are successful, but they are not yet having a major impact among the mainstream
corrugated packaging converters. They are often to be found in non-corrugated digital print provider
channels with their own access to brand owners and retailers. But there also some systems at
independent sheet plants in particular within the corrugated channels.

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At least 4 systems have been proposed for production digital printing of corrugated at high quality,
which are listed in the table below. They included enhanced super-productive flatbed UV IJ systems
(HP FB15000), aqueous IJ systems for pre-print/litholam substitution of substrates for subsequent
lamination to corrugated (HP T410), aqueous systems for direct print of corrugated (Sun Corrprint),
and a UV IJ flatbed system for rigid materials production print (Barberan Jetmaster). There are also
other systems known to be in the works significantly including a system believed to be a modular
aqueous IJ system from Kodak for integration into a corrugated converting press.

Mainstream Corrugated Packaging

In the mainstream corrugated packaging industry there is a sense among brand owners as well as
manufacturers of all kinds that digital has a future as a means of providing fast response and
responding to fragmenting demand in shorter runs. But having said that, this sense clearly does not
translate in all our researches to an understanding of the pathway to ROI. That is to say, no one is yet
prepared to contemplate any system, which is not at parity with analog print in costs. This is
problematic in many cases as the definition of costs is often narrowly stated without taking account of
true overall process costs benefits from a digital system (the real and often disputatious ROI).

This translates to a large and diverse community of market participants who cannot contemplate
introducing any system to their workflow which could not instantly synchronize to their manufacturing
processes and economics - a lack of willingness to believe that digital could scale to their industry.
This is a true but shortsighted perception. The concrete expression of this concern is the very
commonly stated fear that any new digital system is not going to sync to what is for the most part a
synchronized analog print/conversion process. Any print process which could slow a conversion
process down by being even a little out of sync with it generates an automatic pre-refusal. This is hard
for digital to answer and not an illusory fear in mainstream production unless someone can modularize
digital to existing conversion plant and unfailingly keep up with production.

Some forward thinkers see the need and potential to initiate digital into the industry by setting up
separate and parallel digital operations, but this is exceptional thinking. At the same time Georgia
Pacific themselves are an example of an early pioneer in doing this, though they hold their cards close
their chest. Only the independent sheet plants have a really open attitude at this time to digital and
want to move forward, but they command relatively little volume.

Digital may quite possibly also have major issues with corrugated which may only exhibit themselves
as systems come to market - issues with the suitability of UV IJ inks for different corrugated surfaces,
issues with UV ink recycling, issues with head strikes from the uneven corrugated substrate, and
issues in aqueous IJ systems of being able to dry the ink at conversion process speeds in higher
coverages.

The takeaway here about opportunity is that despite the underlying and growing logic of digital, the
mainstream corrugated packaging industry needs education and intensive ROI training to help them
understand the necessity of initiative in digital. The problem is aggravated by the sense and actuality
of only about 20% of the whole industry being in a high quality (digital-qualifying) market quadrant, and
the sense also that that is pretty well taken care of in most cases by flexo high quality post-print. And
then there is that issue of synchronization to punishing conversion economics......

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Digital Offerings

A number of digital vendors have proposed systems for the corrugated market in recent months. This
is a summary of offerings which are public and which are dedicated specifically to the corrugated
packaging market. None of these systems has created a commercial presence in corrugated
packaging to date. Their target in general is to be able to provide very high quality levels on finished
corrugated construct and thus bring enhanced quality to a simplified workflow not requiring lamination
while able to address market fragmentation and versioning at the touch of a button with minimal waste.
But the challenge is to persuade converters to adopt, as it would in their eyes disrupt their existing
workflows and economies. That would not justify their not becoming involved in digital, but it may act to
do so:

HP Scitex Barberan HP Web Press Sun Automation

15000 Jetmaster 1260 T410 Corrpress
Linear Speed N/A N/A 200M/m 70M/m

Throughput 120 full sheets 4100 M2/h 12,000 M2/h. 4,500M2/h

(63” x 126”)/hr;
600 M2/h
Width 1.6m (63”) 1.2m (49”) 1m (42”) 1.6M

Resolution HDR (High 360 dpi, with 1200 DPI 600DPI

Dynamic three grey
Range) scales- 1200
technology 450 optical resolution
to 750 dpi
Technology Fixed Array Fixed Array Fixed Array Fixed Array
UV Inkjet UV Inkjet Aqueous Inkjet Aqueous Inkjet
Feed type Flatbed Flatbed Web Sheet
Target Direct-to-board Partially Preprint, All box plants with
Market mainstream dedicated Postprint and 2+ color work
Application applications, corrugated litholam/label regularly going
Focus also smaller offering, but also supplement/repla through their plant in
runs, test offers a complete cement, focusing batch sizes of less
marketing and printing & on short runs, than 4,000 sheets
displays. finishing solution versioning, etc. (Sun statement)
Preprint and for a variety of Media range 40
Postprint substrates to 200gsm, with
replacement including plastic, option up to
wood, glass, etc. 350gsm.

There are other flatbed UV Inkjet systems from Durst and INCA and EFI-Vutek which are active in
corrugated display print and which would propose themselves for corrugated packaging, but which are
not presented as dedicated to that market. There are also cooperations underway for modular systems
with Kodak in Inkjet.

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Analog Specifications

The following chart illustrates diagrammatically roughly where digital production systems proposed for
the corrugated market fit against UV Inkjet flatbed systems and analog system used in the market:

It should be remembered in reviewing this comparison that the attractiveness of a digital system is only
partially related to its fit in this matrix. It is just as important to be able to fit a digital system seamlessly
into the overall manufacturing flow and tempo. In some ways existing converters, right or wrong, have
a vested interest in their volume-orientation and are not necessarily friends of technology, which
addresses market fragmentation.

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Glass Printing
Total Glass Industry
The Glass Industry worldwide has a value in enduser revenues for suppliers of finished products of
about $264B according to our best estimates sourced from within the glass industry. Only a small part
relates to a print opportunity. This is our estimate of the structure of enduser revenues across the
glass industry against the broadest possible definition:

While specialty decoration with some potential for a modern digital component takes place in specialty,
tableware and containers (jars and bottles), our focus for digital printing in this analysis is flat glass as
it is used principally in the construction industry and the automotive industry, usually for windows.

Flat Glass Industry

The flat glass industry has a value as sold in its final converted format of around $72B globally. This is
how flat glass can itself be analyzed into tonnages and meters squared, including an estimate of how
much is decorated in some way (related to print, though not exclusively). The major opportunity for
decoration now and in the future is in the construction industry quantitatively and functionally, with the
automotive industry offering fewer functional opportunities within an extremely-cost-driven semi-
captive supply environment. Having said that, where digital printing offers a very small scale
customization capability, ranking markets in that context by size and growth/flexibility parameters is not
necessary the best way of looking for early digital customers. Thus a given vendor of dedicated glass
digital printers might see custom printing of publicity-functioning automotive windows on a fleet of
buses as just as good an opportunity as a strategic plan to get involved with a flat construction glass
leader over the longer term.

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It will be seen that in M2 terms the industry is relatively small compared to other print sectors at about
6.9B M2, of which only about 114 M M2 is decorated. It should also be remembered that something
less than half of all constructional glass is double glaze (see below), so that the real surface area even
available for decoration is actually about 25% less than the 6.9B M2 figure would indicate at about
5.2B M2.

Just for interest’s sake, not all flat glass is equal either. Float glass is the highest quality and highest
value type of glass with a significant proportion of world production being however of a secondary
quality out of China as illustrated here:

This is a brief review of a functionality categorization of flat glass within the construction industry:

There is not an obvious correlation between these categorizations and any print/decoration function.
Low-E is an important categorization referring to Low-Emission or insulating/environmentally-functional

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glass. Such glass is increasingly important in growth markets and as a high value-yield product for
suppliers (40%+ value pricing). Coatings are applied to glass to create a Low-E functionality, and
these are capable of being done (most economically) in-line during glass production or during
lamination in some cases, so Low-E does not by any means correlate to decoration processes: in fact
it generally does not do so. Nevertheless we color the Low-E cell light green indicating digital
opportunity. There are important cases right now of digitally-printed Low-E glass and it may be that
digital economics and functionality are suitable against in-line manufacturing techniques for a market
whose demand may be more fragmented and better-managed on the basis of custom offerings than
has been assumed.

Decoration is usually a post-manufacture extra process, though it often does involve re-firing glass to
fix decorative ‘frit’ (ceramic-based) chemistries. But decorating glass involves much more than just
using inks. You can sand-blast, etch, back-coat (which is not printing) and tint during manufacture. You
can also laminate/transfer digitally imaged film & vinyl wrap allowing a translucent/transparent
functionality, and many WFG PSPs do just that. This is our best estimate of processes used today for
direct print of flat glass:

Decoration is said by the industry to be growing well, but concrete statistics are hard to find, and the
aggregate volumes are small indeed compared to other print markets. Additionally the construction
industry is very cost-driven and cyclical, and the room for printed glass to add its value is
circumscribed. There are even unusual threats. For example, digital glass printing used to be widely
used in the casino industry for frequently changed slots panels. Go into a casino today and all you will
see however is LCD panels. Despite all this digital has found its early small way through flatbed
offerings to UV-cured decoration as well as to frit-chemistry applications for post-firing. Most digital
systems are non-dedicated glass systems, but companies like DipTech (Israel) and maybe Wifag
(Switzerland) do offer such dedicated systems.

Dedicated Digital Glass Printing Systems

The best-known company offering dedicated glass digital printing systems is Dip-tech of Israel. Dip
tech stands for Digital Ceramic In-Glass Printing. They produce 3 scaled heavyweight systems which
are essentially flatbed graphics printers using serial piezo printheads to image glass plates at up to
2.8x4M at up to 18mm thick. The printers use ‘frit’ ceramic inks which are oil-based. ‘Frit’ means they
need to be post-print fired in a kiln to fix them permanently through a ceramic bond of the ceramic
pigments themselves to the surface of the glass. This is an illustration of DipTech’s imaging and curing
process courtesy of Dip Tech company:

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This is what DipTech’s largest AR system looks like:

DipTech claim to have an installed base worldwide of 100 dedicated glass frit printers. If so, and if they
accounted for all the glass frit print we estimate that is done globally, then that would say each system
would print about 425 M2 per month. In reality there are a few other specialized glass printing frit
systems, some of which are in China, as well as DipTech, though the numbers are small and hard to
corroborate.

There is a range of other vendors who constitute the family of high end UV flatbed systems vendors
(HP, EFI, Durst, INCA) in the WFG market who also produce some heavyweight systems capable of
handling the enormous weight of glass (only 125M2 weigh one Tonne!!) but mostly only able to print
standard non-frit UV-curable pigment inks. Such systems would not find a large enough market if
dedicated alone to glass today, but some of them – perhaps 200+ such systems - print glass
occasionally.

Conclusion
The flat glass printing market is a true niche, and one which already has a major supplier in the form of
DipTech. The technical learning curve is significant and there is much competition from existing
methods of decorating transparent glass and from digital methods (printed vinyl wrap) in creating a
semi-transparent overlay. The price of entry will be very high and the rewards not obviously
impressive.

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Flooring Market

Which Flooring Products Are Printed Today?

If flooring is printed today, it is likely printed using Rotogravure however, inkjet technology is relatively
new to this market and has been well received by major flooring manufacturers. Although today, inkjet
is used in very small volumes or may still be working out challenges in R&D, some manufacturers do
see digital printing as a means for customization, smaller volume/specialty applications like limited
edition designer prints that could sell at a much larger cost per sq. ft.

However, the biggest driver for inkjet may be the ability to test the market before a larger run and the
ability to produce product closer to market demand—digital printing allows manufacturers to shorten
the supply chain and lead times of traditional practices. Traditionally, it may take months for a
manufacturer to produce product (planning design, securing large volumes of material/substrate,
reserving manufacturer space given for large volume, logistics, etc). Digital printing allows a
manufacturer to first test the market with smaller volume and then produce on-demand as the market
responds to product; eliminating over-production/waste.

Product Type, Average Cost Uninstalled, Print Process

Ave $, Uninstalled, Est. % that is

Product Type Per Sq Ft. How is it printed? printed?

Carpet & Area Rugs $1.-$5. Inkjet 5%

Hardwood $4.-$12. Not Printed NA

Ceramic Tile $3.-$8. Rotogravure & Inkjet 75%

Stone $15.-$30. Not Printed NA

Laminate $2.-$4. Rotogravure & Inkjet 100%

Vinyl Sheet $1.-$5. Rotogravure & Inkjet 95%

Rotogravure &
LVP/LVT $2.-$6. embossed

Other: Linoleum $4.-$7. Not Printed NA

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2014 Global Flooring Market, Estimated Printed Flooring Output

*Assuming same printed % splits as US

2014 US Flooring Market, Estimated Printed Flooring Output

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US Flooring Market
Size: US Flooring Market
The 2014 US flooring market is valued at $20 Billion dollars (wholesale sales dollars: shipments minus
exports plus imports) and it is divided by product type. The US industry leader is today and has
historically been carpet, however other product types are gaining market share. Consumers’ behavior
and growing preference along with innovation in technology, which has improved the product
performance and appearance of products like vinyl, are reasons we expect market share to continue to
decline from the carpet category.

2014 Total US Flooring Market by Product Category, Revenue Share,

Total= $20B

Other, 1%

Vinyl Sheet
Laminate, 5% & LVP/LVT,
12%

Stone, 6%

Carpet & Area

Ceramic Tile, Rugs, 51%
13%

Hardwood,
12%

US Flooring Market, By Product, By Square Footage Sold

An estimated 19.4 Billion square foot of flooring was sold in 2014. The two largest manufacturers in
the US are Mohawk and Shaw (owned by Berkshire Hathaway). These two control 45% of the total US
Flooring Market and also sell into global markets. The remaining 55% of the market consists of small
manufacturers and imports—none represents more than 5% market share.

Carpet and area rugs account for more than 50% of the total US flooring market (80% of which is
controlled by Mohawk and Shaw). In the past, carpet has had a large replacement market, as its
lifespan is less than tile or wood and for new builds (which is slowly starting to resume after the

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recession stall). Carpet is trying to hold market share by offering new options like eco-friendly and
square tiles; which have become a popular choice for commercial applications.

Total Sq ft Sold 2014 US Flooring Market

Total= 19.4B sq. ft.

Other, 1%

Vinyl Sheet &

LVP/LVT, 16%

Laminate, 5%

Stone, 2%

Ceramic Tile, Carpet & Area

13% Rugs, 57%

Hardwood, 6%

Conclusion
The flooring market is experiencing steady growth and expected to continue to grow at 4-5% over the
next five years. Innovations in product aesthetic and performance will continue to be drivers in this
market.

The consumers’ behavior will be an important factor in the growth of products. The consumer will
continue to demand beautiful, affordable products that are easy to install and maintain. For these
reasons, Luxury Vinyl is expected to see the highest growth rates. LVP/LVT is easy to install and
maintain, has many high performance attributes like scratch and water resistant, it is affordable,
maintains a premium look and is warmer, softer and reduces noise compared to tile.

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Residential carpet installation could be in decline over the next few years as a result of a weak housing
market and chances in consumer behavior. However, modular carpet and carpet tile installation will
still remain a popular choice for commercial applications and will see growth.

Although today, digital printing occurs in a very small percentage of the global flooring market, it has
been accepted by many major brands already (although at small volumes, test situations and/or still in
the R&D stages). Manufacturers do see advantages in customization; appreciate the print detail and
ability to produce advanced designs (random designs with no repeats). Similar to what digital printing
has accomplished in the books market, digital printing would allow flooring manufacturers to reduce
inventory and processing time, eliminate waste/set-up, allow shorter print run lengths, ability to print
trial products and premium-limited edition designer runs—and most important: react to the customer’s
demands and get to market faster.

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