WELCOME TO THE CUTTING EDGE - SEPT 2022
Eugene Healy, Managing Director
As we all know, the situation surrounding the supply chain for the paper industry in our region improved somewhat when the long running Finnish UPM mills strike finally ended. However the price outlook continues to be very uncertain, and a number of our suppliers have informed us of upcoming price increases and energy surcharges. In principle, these increases are due to volatility in raw materials supply and rising costs for both energy and transportation. As a manufacturer of long standing, we are doing everything we can to minimise the impact of these price increases under very difficult circumstances. We appreciate your continued support, and will keep you appraised of price increases at all times.
Paper Supply Update
The Covid pandemic, ongoing supply chain issues, the war in Ukraine and other factors are impacting the availability of raw materials across all industries, including the paper market. These disruptions bring added costs that translates to higher costs for all grades of paper with no end in sight in the short to medium term. Wood pulp supply has been reduced, and as a consequence costs are rising across the industry and as papermakers can’t absorb these costs they are forced to pass them along to their customers and prices are skyrocketing across the industry and in all regions. These paper companies are raising their prices continually and passing those unavoidable price increases onto their customers, including paper convertors like Trimfold Envelopes. Like many others in our industry, we are experiencing enormous challenges in raw material logistics’ costs and availability, as well as the increasing disruption in costs for energy markets as global events continue to impact all industries. As a manufacturer, Trimfold Envelopes are doing everything we can to mitigate the impact these constant price increases and fuel surcharges are having on our operating costs so as to keep the impact on our customer prices to an absolute minimum. However, the level and frequency of the price increases and surcharges we are facing from our suppliers mean that we have to review and increase our pricing on a continuous basis. Please note that at this time, all quotations are valid for 30 days only from date of quotation and note that this is liable to change. Thank you for your understanding and be assured the team here at Trimfold Envelopes will do everything in its power to keep supplies of product flowing and to do our best to keep pricing as low as we can.
"Raw material & freight account for up to 75% of the manufacturing costs of envelopes..."
Many components are influencing rising paper costs including: • Supply chain uncertainty • Pricing volatility • Mill closures & strikes some short-term during lockdowns and others permanently • Rising energy and fuel costs • Increased demands for other paper products, which has shifted production priorities in some mills • Pulp is also going up as a consequence of the war in Ukraine, Russian timber cannot be used in the EU • Paper mills are suspending production due to high energy costs, and in some cases it is cheaper to close the mill than continue to make paper at this time • There was already a stressed supply chain in Eastern Europe due to a shortage of truck drivers, this is now being exacerbated by young Ukrainian drivers returning home to join the Ukrainian army & Many of the remaining trucks are now engaged in humanitarian efforts rather than commercial traffic. • As gas and oil are cut off from Russia the price of gas and oil has also taken an upward turn and again has added another cost factor to paper production