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Paper prices pose a critical challenge: APIA

Wednesday, 21 March 2018
By Print21
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The printing industry’s response to an unprecedented surge in pulp and paper prices will be critical to maintaining profitable print volumes, according to the Australasian Paper Industry Association (APIA).

Local paper merchants have been caught flatfooted by the speed and scale of pulp and paper price rises around the world over the past four years, with some companies now being forced to increase their prices every three months.

‘How the industry responds will be critical’: Kellie Northwood, executive director, APIA.

“Our industry must work in partnership with our customers to assist in the understanding of the price increases, as well as explore opportunities for our customers to innovate their paper usage and cost structures,” says Kellie Northwood, executive director, APIA – whose members include major players Ball & Doggett, Spicers, Direct Paper, Australian Paper, Norske Skog, Sappi, Connect Paper and others. “We are working with retailers and print buyers to provide detail on the increases, the reasons for the increases and also developing for our members a ‘ready reckoner’ of sorts to review grammages, pagination, size and more to develop solutions for their customers. If any printer needs access to our FAQs and Summary of the increases, we offer our every assistance.

“Retailers with large investment in print marketing channels are watching this space closely and how the industry responds will be critical to holding stable, and yes profitable, print volumes.” 

APIA says the paper, print and mail industry employs 241,000 people, mainly made up of small to medium sized Australian businesses.

“The paper sector is a key raw material supplier to the print industry and we need to understand the global issues as well as communicate clearly to our customers,” Northwood says. “Print marketing remains a strong advertising channel for all brands. Retailers, in particular, increased their investment in 2016 with an increased volume recorded across circulation and pagination for catalogue and print advertising. The price increases are being discussed with retailers who are facing their own challenges, however, with one of the highest audience reaches and a strong ROI over other channels, we do not expect the moderate price increases to impact the channel too adversely on volumes if managed with transparency.”

The banning of mixed paper imports and the closure of polluting pulp mills in China, as well as import/export exchange rates and supply/demand ratio shifts are just a few of the factors driving the rise in prices.

The increases have not come as a shock to the paper sector, says John Walker, the chairman of the APIA. “In 2016 to 2017 we saw a significant downsizing of paper production globally. As economics go, when demand outweighs supply, prices go up and vice versa. The industry has enjoyed paper price declines for some years, however the market is now correcting. The pressure from the overseas mills and the industry must pass on the price increases to ensure sustainability of the sector.”

The message is clear, says Northwood: “Paper price increases are going ahead and printers will need to work closer than ever with not only their supply chain but also their customers.”

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