A Major Concern- SHORTAGE OF PAPER SUPPLY IN EUROPE!
With the increased prices of the cardboard and paper tubes products at Just Paper Tubes, many stakeholders and customers have a lot of concerns. We understand that price increases are never easily to deal with and we aren’t doing it out of greed but out of necessity, so we can continue to deliver our high quality product with the great service levels you are used to.
However, we always operate in the interests of transparency and full disclosure. Our main aim is to give a clear overview to our customers and stakeholders about the major reasons for challenges and the price hikes the whole paper industry is facing. Changing trends in the paper industry at the international level are having an affecting the demand and supply equilibrium under which JPT operated so far. Here are the reasons why we sought to increase the prices of our cardboard tubes in 2018.
The rise in Demand for cardboard tubes and waste paper
In the past few years, we have experienced a huge demand increase of paper and cardboard tubes in European Coreboard across the International market such as Africa, Europe, and the Middle East. This demand has been exacerbated by the latest initiatives and policies implemented by China that relies on wastage of quality paper from trusted sources in Europe to accomplish the rising demand for product packaging to support its burgeoning e-commerce industry.
Decrease in Supply
At Just Paper Tubes, we rely on different large-scale manufacturers across Europe for paper supply in order to manufacture our cardboard and paper tubes products. With more than 30 years of experience, we have seen most of the manufacturers have either sold their mills, converted them into containerboard mills (for boxes) or shut down them, hindering our capability to source paper with ease. We have maintained long standing relationships, so we have been able to keep continued supply unlike other manufacturers.
Paper manufacturers increasing prices to offset high demand
Because of the increasing demand for cardboard and paper products, many paper manufacturers are unable to meet the demand of their customers and shareholders. Therefore, to achieve the demand and supply, they have increased their prices. Even in 2017-18, after the significant price hikes the global demand stays steady and strong.
Brexit Impact on the British Pound
This has been a game changer. Due to the huge impact of Brexit on the British Pound that has been underperforming against Euro (due to the referendum of Brexit on the 23rd June 2016), it has not only affected the paper by GBP/EUR exchange rate but also increases the transport costs in the reassessment of the prevailing costs.
Just Paper Tubes and their ways to address the challenges
In today’s current market scenario, the paper sellers are dictating in terms of supply. There has been an immense increase in the prices since 2017, along with a turbulent supply we’ve invested in greater storage facilities so we can buffer ourselves from the supply issues but all of this comes at a price.
After facing losses on many of our cardboard tube product lines due to the latest price increase imposed on us we had to take certain steps to address the challenges. Although, we have enough supply to meet the growing demands of the customers, incidents such as the significant breakdown at our supplier’s mills has meant we’ve had to source paper from other suppliers and hold more stock.
Steps taken by Just Paper Tubes
At Just Paper Tubes, we’ve taken the initiative and always look to support our shareholders and customers. Let’s explore these steps in detail.
• We try our best efforts to negotiate with our prevailing suppliers to keep the price low.
• To get the best paper for our cardboard tubes, we are working very hard with new suppliers as well. Despite tight supply and unprecedented high demand, there are not many suppliers in the market place that have spare volume, however we have been fortunate to forge new relationships.
• With the small price increases that we have passed on to customers we’ve been able to sustain our supply of paper and production capability, and we’ve ensured no interruption to our customers.
• We have continued to communicate with our customers on a regular basis to keep them updated with the current market conditions with the paper industry.
We, at Just Paper Tubes, we hope that this problem may resolve as soon as possible. However, until this comes to fruition our supply lines remain open and we have continued to supply all of our customer as normal.
If you have any queries in your mind, feel free to get in touch with us.