The big three paper merchants will all raise prices between eight and 10 per cent as early as next month, blaming the fall of the Australian dollar driving up the price of raw materials from overseas.
BJ Ball led the way, announcing an eight per cent across the board increase from March 31, the company saying it cannot keep absorbing the increased costs.
Merchanting general manager Luke Wilkinson says: “Over the past six months we have incurred a number of increases from key suppliers, increase in ocean freight and various inflationary costs pressures.”
“To compound this, in recent months we have seen a sustained depreciation in the Australian dollar against the major currencies, affecting landed prices for January and Februry arrival onwards.”
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KW Doggett managing director Simon Doggett confirmed his company will follow suit, hiking prices by up to 10.5 per cent from March 17.
He says prices will rise by an average of eight per cent depending on the type of paper, country of origin and the currency used to buy it, with commodity grade going up the most and locally sourced paper the lowest, with some not rising at all.
He says over the past 12 months the Australian dollar has devalued 16 per cent against the US$ and 18.5 per cent against the Euro.
“The whole supply chain has shifted with the currency,” he says. “There’s nowhere to hide no matter what industry you’re in when it comes to currency.”
“We’re trying to make this as easy as possible for the market.”
Paperlinx company Spicers has also flagged price hikes of 8-10 per cent but is yet to confirm dates or further details.
Paper manufacturer Sappi is also raising its prices for all paper grades, sheets and reels by 8-10 per cent from April 1.
Managing director John Walker says: "It is unavoidable due to rapidly deteriorating product margins resulting from the weakened Australian dollar and ongoing inflationary costs in raw materials and input costs that our paper mills have been unable to recover."
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Printers are responding with dismay and resignation but say they understand the commercial realities and small margins of the paper industry.
Blue Star chief executive Geoff Selig – who buys more sheetfed paper than anyone else in the country – says currency rates are one component that affects paper prices and he accepts the need to increase it as a result.
“You would just hope there’s no attempt to increase the base price beyond that under the guise of the currency, especially given our good relationship with them,” he says.
“It is an unhelpful time for upward pressure on raw materials given the still soft Australian economy, and the behaviour of Australia Post in increasing stamp prices and competing with its own customers, which like many of us I have an issue with.”
Selig says Blue Star is still digesting and assessing the news.
Wayne Davis, owner of Byron Bay printer Artisan Press, says his company will be forced to pass the increased costs on to clients.
“The first one you can absorb but the next you have to pass on,” he says.
“While price rises are reasonable it’s difficult to believe the dollar makes this much of a difference.
“We are concerned, but as a small printer it doesn’t hit us as hard as bigger ones, and it’s not like we have much bargaining power.”
Ian Wolf, managing director of regional NSW printer Tony Wolf & Son, says he will be forced to absorb the costs in fear of losing business.
“Since our work is mainly short run it won’t be quite as bad, but it would be devastating for others,” he says.
He says while overall the price rise is reasonable as ‘paper merchants are doing it tough’, he doesn’t feel printers should have to pay extra for paper stock that has already been brought into the country.
“It’s always the same, isn’t it,” he says.
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