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Paper price rises on the way despite strong dollar

Monday, 15 August 2011
By Print 21 Online Article

Australian Paper hikes prices by five per cent across its offset range, which merchants say will have to be passed on to printers.

A quick call around to paper merchants indicates the price movements will follow AP’s price rise in October between five and 10 per cent. How much and how far will depend on the sector and product, of course.

PaperlinX has no other alternative but to pass these increases onto the marketplace, according to group strategic sourcing manager Rohan Dean. “I don’t believe it will just be from Australian Paper. Other manufacturers and suppliers are under similar pressures.

“We understand that our customers operate at the same level as ourselves when impacted by these price increases. We need to give them clear indications what is going on and try to give them at least a month’s notice when things like this come through,” he said.

According to Australian Paper it is currently reviewing all prices within its Printing Papers segment. In a statement it said, While the strength of the Australian Dollar has seen price levels fall over the past six months the ongoing rising labour costs and increase in raw materials has meant the we have no choice but to start to recover these increases.

BJ Ball Papers understands AP’s price position, says Craig Brown, national sales and marketing manager. “We will continue to support them as the local manufacturer. Price adjustments will continue to be a reality under current market conditions.

“We are in discussion with our other suppliers in relation to pricing as currency changes have offset mill price increases over the recent period. The fact of the matter is that increased input costs will drive a number of mill increases. In light of these developments we will be reviewing our market pricing across most of our grades," said Brown.

Paper suppliers have to balance the volatility of price rises passed onto customers against the rising costs of energy and materials. Simon Doggett, managing director at K.W. Doggett Fine Paper, says any increase coming through from suppliers will be pushed through the chain.

“There is no room to absorb currency devaluation and the impact it has on landed costs. However at this point I do not have a clear understanding on what the increase will be.

“We are currently assessing all the costs in the business and working out what we need to do to return to a sustainable business model,” said Doggett.

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