INDUSTRY
BIG ASK
Papering over the cracks The international paper shortage has been created by a variety of factors, but it seems set to have a long-term impact on the sector. The age of cheap paper could be over – and dealers will have to educate customers on the need to reassess their expectations Steve Carter, Advantia
in September/October, but then it might even out after that
The problems in the paper market
point. However, if you want paper, you have to pay whatever
are myriad. The decision of some
the going rate is – that is the reality.
mills in Central Europe to focus on
What this does mean is that the era of cheap paper is
higher margin products – such as
over – as an industry we have been selling it at too low a price
pressboard and packaging – rather
for years. This means dealers will have no choice but to pass
than paper has added to these
the increases in paper costs onto customers and, as with most
problems, as the product cannot be readily sourced from
paper products, there is little margin in it – indeed, some
elsewhere. It is too expensive to ship paper from Asian mills,
dealers have used it as a loss leader as new customers often
and those in South America have enough work with demand
judge dealers on the price of their paper. That won’t happen
from North America to look to ship to Europe. While the
anymore as dealers will not be able to afford to do it.
Finnish paper mill strike is over, we won’t see the benefits of
Going forward, for dealers, it will be about educating
that in terms of physical products for another six months, but
the end-user about what has gone on in the sector, and will
it does take the pressure off the other mills in the short-term.
happen in the coming months. Many businesses in other
From speaking to people in the sector, we are now
sectors will not know about what has happened in the paper
starting to see a slight recovery. From June onwards I think
sector, so it is up to dealers to explain this and why paper
we will see more paper come back into the market and,
prices have to rise. As costs have risen in many other sectors
hopefully, at that point there will be more continuity of
this year, they are likely to understand, and be accepting of it,
supply. We are likely to see more increases in price, maybe
if they are given the right information.
[12] JUNE 2022
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