Paperboard Industry Continues to Suffer from Rising Costs
December 2006
|
“The increase in costs, especially energy, is putting an enormous strain on the cartonboard industry,” states Juha Yrjönen, senior vice president of sales, M-real Consumer Packaging. Since the beginning of 2004, both oil and energy prices have nearly doubled and these increases are also behind the soaring costs of transport and papermaking chemicals. In addition, pulp prices have continued to move upwards. Folding boxboard market prices, however, have now remained practically unchanged for the fourth year even though operating rates of folding boxboard machines have stayed at satisfactory levels during the same period of time.
Market requirements for smaller deliveries with shorter lead times result in increased costs throughout the supply chain. In addition, the need for technical improvements and efficiencies in carton production requires investments in board machine technology. For example, M-real has developed light-weight paperboards which bring cost savings to the whole chain, through to the final consumer. “The investments that we make in order to serve our customers better are not achieved without an increase in costs,” explains Juha Yrjönen.
Some of the cartonboard industry’s less efficient machines have been shut down and paperboard companies have started various efficiency and savings programs. These measures, however, have not markedly improved the profitability of the industry, as input prices have risen significantly during the past few years while folding boxboard market prices have remained stagnant. “Under these circumstances, I think it will be necessary for the industry to make changes. Continuing, for example, to offer extensive ancillary services as part of paperboard sales may need to be reviewed,” Yrjönen concludes.
Market requirements for smaller deliveries with shorter lead times result in increased costs throughout the supply chain. In addition, the need for technical improvements and efficiencies in carton production requires investments in board machine technology. For example, M-real has developed light-weight paperboards which bring cost savings to the whole chain, through to the final consumer. “The investments that we make in order to serve our customers better are not achieved without an increase in costs,” explains Juha Yrjönen.
Some of the cartonboard industry’s less efficient machines have been shut down and paperboard companies have started various efficiency and savings programs. These measures, however, have not markedly improved the profitability of the industry, as input prices have risen significantly during the past few years while folding boxboard market prices have remained stagnant. “Under these circumstances, I think it will be necessary for the industry to make changes. Continuing, for example, to offer extensive ancillary services as part of paperboard sales may need to be reviewed,” Yrjönen concludes.
|
Best Practices for Print Automation
Competing for Print’s Thriving Future