Everybody's talking about... rising paper costs

Wednesday, January 7, 2009

Printers are facing ever more expensive paper prices. Can companies change their purchasing strategies in order to save on costs?

THE PAPER MANUFACTURER

"Saving money is one of today’s biggest concerns. M-real has been developing lightweight coated papers, which means customers gain more printable space from the amount of paper tonnage they normally buy. For example, switching from a 135gsm standard coated fine paper to 115gsm could result in savings of as much as 15% in paper cost, but it still provides the equivalent feel, bulk and print quality. As the end product is lighter, a finished piece may cost less to post or distribute when charges are based on weight per copy. One of our customers, an international mail order company, switched from a 150gsm to a 135gsm grade to buy more paper with a lower weight and gained a 10% saving. Increasingly, lighter-weight papers are now appreciated for their lower potential impact on the environment as less wood
is needed to produce the same amount of paper."
Marjo Halonen, vice-president of marketing communications, M-real

THE PRINTER
"Recently we quoted for a job but failed to win it. This was not because another firm proved to be more successful but because the customer decided printing was not a viable medium. The problem is there are now credible alternatives to ink on paper. Printing it is certainly no longer essential. By increasing prices, we as an industry will simply accelerate a trend away from print. We cannot buy sheets more cost-effectively – we’ve tried. The customer wants the job size they’ve chosen for a reason. I do think people will be buying less paper as a result of price hikes. I believe that the paper industry as a whole is failing to understand the dynamics of the print industry and its marketplace. The entire media industry is in flux due to new technologies and fresh ways of operating. One thing is certain: print has to remain competitive."
Mick Hart, print and bindery manager, Allsopps

THE PROCUREMENT DIRECTOR
"Increases in paper price will impact on demand. Sterling is sliding fast and most paper is bought from overseas. Mills might be cutting capacity and reducing costs, but the drop in demand will continue to outstrip reductions in production. Real demand will vary between products. For magazines, many publishers are looking at print orders and considering size, pagination and paper quality. Paper costs are up in all sectors and there is a pressure on marketing spends. The return on investment for paper communications gets lower and drives businesses to look more and more at alternatives such as email or online. To sell paper-based products, suppliers need to make systematic changes and introduce smart marketing. But although I don’t generally show sympathy for paper makers, I expect thousands of redundancies will be made in the sector, which is also tragic."
Martin Bloomfield, global procurement director, Reed Business Information

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