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Getting the right stocks for success

Whoever said variety was the spice of life did not purchase paper for a living. Buying paper is a complicated matter, no longer just about looking at value for money and high-quality products, the selection of the right grade now needs considerable thought. Over the past 10 years, there have been many developments in paper quality, for example in brightness and more opaqueness at lighter weights, but there remain many questions concerning quality, coated or uncoated, the shade and weight.
The same questions apply to recycled papers, with a huge choice of grades and numerous environmental standards, such as FSC, PEFC, ISO 14001, EMAS or carbon neutrality, available.
 Purchasing paper is a serious business and
tends to be the largest single part of a publication’s production costs, representing around 50%
of the total value of the job. Recently,
there have been increases in the price of many stocks as raw material costs soar, while overcapacity has forced mills and merchants to close or consolidate leaving certain grades of paper unavailable.

Communication is key
David Turnbull, UK sales director of Scottish-based paper manufacturer Curtis Fine Papers, believes communication along the supply chain is vital. He says capability information needs to be shared so that a firm is front of mind when it comes to selecting speciality uncoated papers, either branded or custom-made.
 Paper buyers also need to consider what printing, conversion and finishing processes the paper will go through as well as its intended end use. Turnbull suggests buyers consider what these processes are
and to take advantage of the technical information
out there. David Mears, purchasing director at Southernprint, also believes that getting paper selection wrong “can mean an unhappy customer and/or increased costs for the printer”. He says that careful evaluation of the job and the type of paper that would best suit the product at the most economical cost is the first stage, and adds: “a proven product is an advantage, but a new product should always be considered”.
As most large publishers purchase their own paper, which is then managed for them by a mill or merchant, one industry insider suggests that excess stock must be taken into account. “VAT implications are vital, and the outcome depends somewhat on the clout of the end user,” he says. Dominic Blakey, sales director at P3 Salehurst, which specialises in the supply of paper and management services to publishers, agrees that the focus should be on the usage of paper and the wastage involved in the printing process. He says that in the event of considerable over usage, the publisher can invoice the printer for excess waste. P3 Salehurst now negotiates with the mills using the combined tonnage of its customer base to achieve the best market prices.

Waste reduction
With the environment at the forefront of people’s minds, Blakey adds that the minimisation of waste is ever more relevant. The Confederation of Paper Industries (CEPI), for example, has recently developed a Carbon Footprint Framework for paper and board products in response to demand from paper buyers for less confusion. Curtis’ Turnbull admits that environmental labelling schemes such as FSC have added an extra degree of complexity into paper selection, “yet, as the advantages of these types of papers are generally
well communicated, the paper purchaser can be assured that by using them they are making a genuine eco-paper choice”. He believes these schemes also present a clear message to customers about environmental commitment.
However, purchasers must check all environmental accreditations and not rely on mills having just FSC Chain of Custody but those that use FSC pulp in all their papers. One publisher believes some merchants and mills still view the environment as an opportunity to make more money out of these “green products”.
Publisher Egmont became FSC accredited in August. All the publisher’s fiction titles, which total more than
300, will use certified pulp. Egmont production director Alison Kennedy
says that environmentally, it is becoming easier to find FSC-certified paper now than it was a year or two ago. She says: “While this is excellent news at the top end of the spectrum, I continue to be concerned at the bottom end and find
that the grading system gives me a
useful tool for taking out the bad
(illegal and unknown) from the bottom
of the pyramid.”

Publishers’ resource
Egmont developed the publishers’ database for Responsible Environmental Paper Sourcing (PREPS) in September 2006, which is designed to allow publishing houses to share information on the environment credentials of papers used to make books. The website (www.preps-uk.com) provides its members with grade information so that they can make decisions with an environmental and ethical bias. It also provides details on technical attributes, as well as mills and mill groups.
Egmont specifies paper by brand name and if necessary, by mill on all components. Kennedy has not found any problems with printers around the world being open to sourcing the paper on their behalf, “but this is very much in the context of the necessity if you do business with Egmont of being able to understand the pulp sources and the only way to effectively do this is to specify by name/mill.”
In terms of supplying paper to a printer rather than buying an inclusive paper, print and bind price, Kennedy has found it more effective to use the printer to buy on her behalf. “As a specifier, I still feel that I have control but recognise it is also important to keep an open dialogue with paper suppliers. Of course, others may see a potential upside of price in supplying the paper, but I would be cautious on this as price can be easily eroded if problems arise on press and it becomes difficult to identify the cause.”
Paper merchant Premier Paper’s chief executive Martyn Eustace adds that printers can offer paper competitively by using their buying power to pass on good deals for their clients, but says they will expect a margin on this to cover financing and stocking. Whether or not this is cheaper depends on the quantities and the level of complexity involved, he says.

Merchant market
After a great deal of consolidation and change over recent months, there are two main merchant groups that dominate the UK market. The first is PaperlinX, comprising PaperCo, Robert Horne, Howard Smith Paper and Donald Murray. The second is under Antalis-Map, which includes James McNaughton and, currently, Premier Paper, which will be sold off. The independents include
Elliott Baxter, Denmaur Paper and Independent Paper.
Ultimately, it’s important not to put all your eggs in one basket. All the merchants within the bigger groups currently compete. However, the way the market is going at the moment, it is generally believed this competition will lose its edge in the near future.


TOP 10 PAPER BUYING TIPS
• Keep up to date with market changes and who owns who. Don’t put all your eggs in one basket
• Consider trading with an independent merchant
• You can’t beat the market. Supply and demand are intrinsically linked with paper prices
• Paper merchants have never been more risk adverse and they will closely monitor everything you do
• Equally, risk-free trading is very valuable for any merchant.
• Be honest. If you file negative figures, tell them in advance and show willing on improvements
• What country is it from?
• Don’t be caught up in the design, just focus on the end use and paper’s likely shelf life
• Avoid niche choices if it’s the only one of its type or from a limited family of products you will pay more
THE VIEW FROM WITHIN: INDUSTRY INSIDER IN THE PUBLISHING MARKET
One firm emphasises that paper selection is a balance between getting the best quality based on the job in hand and a good price. For a very prestigious journal, you need to go for a heavier weight and probably a gloss paper, and a lightweight matt paper for a simple job. She says: “If someone can’t tell the difference between a 100gsm gloss paper and a 90gsm gloss paper, encourage the use of the 90gsm and save on transport costs.”

With mills closing, the firm is having particular problems in finding an uncoated stock that matches its old papers. It is trying to encourage the use of coated papers for journals, but is finding it difficult to get people to move away from what they are used to.

To further complicate matters, the firm predominantly prints in Asia, but cannot source all its papers from Asia and some European mills will not sell their paper for printing in Asia. “Sourcing paper from Asia is fraught with environmental issues, so we have to be careful at what we look at.”

It has always bought paper themselves through paper merchants, and placed the paper at the printers.
Many publishers do get the printers to supply the paper and specify what stocks they want. She says: “But if you are not specific, the printers could change stocks which was never an acceptable option for us.”

Comments

Gary Butler - 02 January 2008

Why add more complexity to paper buying? UK merchants have served the printing and publishing communities well with a continual investment in the range of papers and environmental standards available. There can be only one reason for printing books in Asia and that is '£ cost saving'.

Does it make environmental sense to ship product back to the UK and promote the feel good factor that the book is printed on FSC Paper? Supporting UK and European printers will be a far better investment for all concerned.

colin gillman www.ukdp.org - 22 February 2008

 I quite agree. UK merchants have had it rough for some years and we should be doing more to be supporting our own industry.

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