The country’s leading paper merchants are flagging a rise in paper costs from October of up to 10 per cent for sheetfed stock, and saying this time they intend to make it stick. A ten per cent rise in paper means cost of production for a printer will rise by about three per cent per job, as paper typically represents about 30 per cent of the cost of production. Fierce competition and a shrinking market has meant previous rises have largely been resisted by Australian printers, however a 15 per cent reduction in the value of the Aussie dollar has merchants saying that the October rises will stick. Spicers, BJ Ball, KW Doggett and Direct Paper have all come out indicating that the price rises are inevitable and necessary. In a letter to its clients outlining the upcoming rises Spicers says that the currency movement and increased mill costs are driving the rise in the cost of paper arriving in Australia. The company says, “Spicers has no option but to recover a portion of these incremental costs to our business and as such will increase all ex stock pricing by 11 per cent effective October 5th 2015. Spicers is fully aware of the sensitivity of price in such a difficult trading environment and apologises for any hardship this increase may cause. Any efficiency gains or enhanced cost control savings will be passed through to the market wherever feasible.”
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BJ Ball has flagged a rise of ten per cent, also citing adverse currency and higher prices from its suppliers, while KW Doggett says that any continued resistance of price rises may lead to supply being switched away from Australia. Doggett has not announced figures, but says they will be in the same ballpark as the other merchants. Sappi concurs with Doggett on the price versus supply correlation, saying that the European mills are pushing for a ten-12 per cent rise and that continued resistance may result in supply pressures as mills look for the optimum returns. Growing independent merchant Direct Paper director Dale O’Neill says they will also be lifting prices by 10 per cent due to the same currency and increased prices reasons.
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