Last Friday’s 8.9 Richter earthquake and tsunami has disrupted the paper supply chain coming out of Japan. It is believed that web stocks will be particularly affected.
Nippon Paper is a major supplier to the local paper market, with Australian Paper telling ProPrint the Australian market receives roughly 100,000 tonnes per year from the Japanese paper maker.
Nippon confirmed that four of its seven sites, including its flagship Ishinomaki mill, ceased production. Damage includes collapsed ceilings, influx of soil and sand sediment and damaged stock.
“Almost all stock in the [Ishinomaki] mill seems to be damaged,” the company said in a statement.
The mills that had ceased operation on 12 March were Ishinomaki, Iwanuma, Nakoso and Akita mill, with “a few machines” also stopped at its Fuji mill.
Australian Paper general manager of sales and marketing Wayne Stanistreet said his staff had been working around the clock since the disaster.
Stanistreet said his expectation was that damage to surrounding infrastructure in the region, such as shipping and power, would also have serious implications on the supply chain.
“There is quite a deal of uncertainty at the moment because communication with some parts of Japan is very difficult,” he said.
“We would expect to see an impact, because our customers buy their paper months in advance, so this break in the supply chain will have implications.”
Stanistreet said that Australian Paper’s customers, which include some of the major magazine and catalogue printers in the country, had been highly supportive and were working through contingency plans with the supplier.
“The customers have voiced concerns, but these concerns were more toward safety of staff in Japan,” he said.
Paperlinx said it also expected to feel impacts from the disaster but it was too early to estimate the extent.
Group strategic sourcing manager Rohan Dean said the company is looking into which products may be affected.
“The first indication is that most of the suppliers that we deal with are in similar situations, not a lot of damage but there are concerns about the disruptions to power at sites in Japan.”
“We have had a couple of mills that have been affected, but we import paper from around the world so we shouldn’t suffer shortages.”
Dean said it was too early to say if paper prices in Australia would be directly affected by the disaster.
CPI director David Bull was on his way to Japan when the earthquake struck. He said: “It will put some pressure on supply and demand in the short term. Whether that means shortage of supply or rising prices is yet to be determined.”
Bull added that mills’ input costs could increase if problems at nuclear power plants meant they had to switch to other power sources, which could also have knock-on effects on prices.
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