Northwood: manage paper rises with clients

Paper industry group Two Sides is calling for print shops to work closer with clients to effectively communicate the global paper price rises that the industry is facing.

 

Kellie Northwood, executive director, Two Sides Australia says, “A global rise in the price of pulp means that prices across all grades of paper are affected. It is not one mill, merchant, country, or region, it is a global issue that we need to address.

 

“As an industry we have to communicate to our customers that this is due to global pulp price increases, and we must pass them on.

 

“The data shows that people were paying more for paper four years ago up, and that prior to the price increases, it had fallen by 28 per cent in that period. The latest increases have only been 3-5 per cent. End users, retailers and customers are still in front.

 

“If your customer has budgetary concerns, you can say let’s look at paper innovation. That could include working on grammages, going to a lighter grammage, looking at the size, potentially switching from A4 to American Quattro, or something like that. You can also look at fitting the grade for purpose – Australia enjoys high quality paper, and typically uses better stocks than needed. Magazines in America for example are printed on much lower grades of paper.

 

“All of that information we are providing to our members, but even non-members, let us know and we are happy to share this. We will put it online too. At the moment we are sharing this with our members, but I am happy to share this more broadly with the industry.”

 

Two Sides says pulp and paper price increases are due to a range of levers being pulled, including the banning of mixed paper imports and the closure of polluting pulp mills (small and old) in China, as well as import/export exchange rates and supply/demand ratio shifts.

 

Tim Woods, for paper bible Industry Edge, says, “The price increases are a direct result of input and operating costs, combined with relatively tight markets and improving capacity utilisation rates. Paper prices are on an upward cycle for the first time in more than a decade.”

 

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.”

 

John Walker, chairman, Australasian Paper Industry Association says, “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 paper, print and mail industry employs 241,000 mainly made up of small to medium sized Australian businesses. Two Sides says any shifts from the major raw material supplier – paper – could have ripples.

 

Northwood says, “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.”

 

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