News
M-real puts up prices to boost profitability
Paper manufacturer M-real has said it will further increase the price of its coated fine and magazine papers by 8% in order to improve profitability.
The company said that despite already having increased prices in 2008, "the amounts yet achieved are insufficient".
In a statement, it stressed the need for price increases in all main product areas.
Individual customer negotiations have already started in the various markets and all further increases will take effect as of early 2009.
However, Freddie Kienzler, managing director of Essex-based commercial printer Formara, said: "Clearly any price increase to printers at this time makes life even more difficult than it already is.
"However, just as we can't continue to operate year after year without passing on some of our cost increases, then logically we can't expect mills and merchants to do the same."
He said it is a fine balancing act between cutting overheads, increasing productivity and trying to keep a lid on all supply costs as best one can.
M-real warned about the need for the increase in its third-quarter results.
It recorded sales for July to September of €826m (£650m), down 0.4% from €870m the same time a year earlier.
Its total sales for January to September were €2.51bn, down 3.9% from the same period the previous year.
Coated fine and magazine paper prices will rise by 8%
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Comments
Mick Hart - 27 November 2008
I hope customers have the guts to vote with their corporate feet! Further increases cannot be justified by anything other than greed, as pulp prices and power costs have plummetted since the previous increases this year, and markets will not/cannot/should not support the paper industry's over capacity any longer. This is one band waggon that needs to stop now - or paper suppliers will not have any customers left to supply!
Charlie Minnot - 27 November 2008
[EDITED] Where one leads the others will follow, each with their own story of how tough it is for them, as though it's blissfully easy for printers and their customers. Printers who can walk will, but only to wherever they can scavenge credit.
peter smith - 28 November 2008
Well is it not strange, how you printers all complain when the paper merchant or paper mill end a finanancial year with a2% pretax profit it is a rip off,you say "we should walk away",why should the paper industry not make a profit, the sad thing is no paper no print, i said it 25 years ago it would happen [edited] almost the same as our banks, in hindsite if only you guys looked after your friendly paper merchant instead of a) not paying them for 90-120 days, and B) not playing one off against another you might well have had more choice of mills and distibutor, one thing the paper merchant did very well was to look after his supplierie dine and wine his paper mills,
because no paper no beer money, and the printing industry overall has been to narrow in the thinking foryour supplier,a merry xmas to all who put ink on paper because 2010 you may only have 4-5 groups of mills to choose from and a dozen paper merchants,oh what a sad day for the printing industry
Mick Hart - 01 December 2008
Unfortunately, what really happenned is that hindsight came to fruition, [edited]
Just as unfortunately, paper is not like petrol - there are other media out there that customers can and are turning to, media which are nothing to do with paper! Paper suppliers should remember that print (and thus paper) is no longer an essential commodity (as is fuel) and the current attitude of some in our industry will merely guarantee the long term demise of print and paper as a viable means of communication.
PS - if you managed to eke out a meagre 2% profit last year you did very well, whole hearted congratulations from all in the print trade.
Gerry Anderson - 01 December 2008
Anyone in their right mind will take their business elsewhere just so long as the other paper barons don't follow suit with a procession of neatly choreographed, independently determined price hikes. Amazing how essential it was to include the word coincidence in our dictionary!
Julie Cook - 01 December 2008
I for one don't see a demise in print, but the price increases over the last twelve months have been somewhat hard to swallow. Yet strange somehow, shop around with a Debit Card and don't ask for credit, prices come back down to 2006 rates.
Mick Hart - 03 December 2008
I would be interested to know why 'posters' on this site are not informed when posts are edited retrospectively. I assume it is because someone disagrees with the posting. It is coming to something when freedom of the press rules, but freedom of the public to air an opinion is not allowed, even if that opinion is widely held, and written in a perfectly polite manner, well within forum rules. I refer to my comment which reads;
'Unfortunately, what really happenned is that hindsight came to fruition, mills do run as a cartel, and merchants looked after their supplier line so well they (metaphorically at least) got into and stayed in bed with them.'
I assume this quotation will also be removed, but if we are not to be allowed to air responsibly held views, what is the point of this page on the PW site? Please encourage objective criticism and comment - and get any objections posted here in writing so that we can all share, surely that is the point of debate!
Mark Snee - 03 December 2008
The Euro is currently down to 1.1660 as I write.
From a high of 1.48 last year, I make that a fall of over 20%. This is bound to be reflected in prices of materials - and not just paper - since the vast majority is now imported.
Still, that's not as bad as anyone wanting to buy a Japanese printing press. If it cost £1 million in August 2007 when the exchange rate was around 250 Yen to the pound, it will now cost getting on for £2 million, as the Yen has this morning dropped to below 137 to the pound.
Probably a good time to become a printing machine engineer, as we'll have to run our presses 'round the clock' for the next couple of years.
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