Printing and paper industry rocked by huge price hikes

The cost of paper, cardboard, printing supplies and related products has skyrocketed since the end of 2021, driving prices up around 50% in recent months, MaltaToday has learned.

Rising fuel prices, strong demand, supply chain disruption and the Russian invasion of Ukraine all contributed to the price increase.

Local business owners have already had to make staff redundant and now fear that any further significant cost increases could spell disaster for their businesses.

Richard Gatt, owner of RGS Supplies Ltd, said the price of paper and board supplies had risen significantly in recent months. But even more worrying was the increase in transport costs, which were also increased due to the increase in the price of oil.

“At the end of 2021, I was paying €3,800 to bring a container of supplies to Malta,” he said. “In April, I had to pay €8,000.”

Gatt said sourcing materials and products was becoming more difficult. Prices in Italy and the Far East have skyrocketed, so he is currently focusing on buying equipment from Turkey, where the price rise has been slower.

He said the Ukraine crisis and resulting sanctions also played a role. Two major factories in Ukraine had ceased production while sanctions prevented dealing directly with Russian factories and exporters.

“These price increases are happening across the board and are not limited to our industry,” Gatt said. “However, if the price of fuel continues to rise, we could be in serious trouble.”

Alex Pace, owner of a print and copy office and large format printing and signage business, agreed. The price of plain paper has increased by 35-45%, while other paper, paperboard and related supplies have increased by at least 45%.

“The problem is that even though we had to pay an exorbitant price increase literally from one order to another, we cannot pass this increase on to our customers,” he said. “That leaves us to absorb most of the costs ourselves.”

Pace said the pandemic had dealt a severe blow to the industry. However, price increases could very well prove to be insurmountable for many companies.

Indeed, worldwide demand for paper has plummeted during the COVID-19 pandemic, with a rapidly declining paper market already in decline for more than a decade due to falling demand for newsprint. , magazines and office paper.

It was only thanks to the government wage supplement scheme that the print shops, like many others, survived the two years of lockdown and restrictions.

But he still had to lay off some of the staff due to the slowdown in activity and the increase in costs incurred.

And Pace says it’s not just paper products that have been affected.

It sources rubber stamp mechanisms and peripherals from Austria. But where an order in December cost him €1,400 including postage, a similar order last week cost him €2,300, a 64% increase.

“There is no way to pass on such an increase to your customers, so we have to absorb the losses ourselves,” he said. “The situation is now becoming ridiculous.”

He said with the reopening of borders and the suspension of restrictive measures, he now looked forward to a rapid return of the events and conferences industry to revive business in the short term.

Another paper and board importer told MaltaToday that prices are rising minute by minute and it is also becoming almost impossible to source materials globally.

And many large international suppliers now apply allocations and will not fulfill a customer’s order if it exceeds the allocated volume reserved for the region.

The source said the situation was bad in all areas. Prices are increasing every day and deliveries are taking longer.

“We not only have to put up with the excessive price increase, but we now have to wait a minimum of eight weeks for delivery, instead of the two to three weeks we were used to.”

And some suppliers were applying surcharges even after an order was finalized and awaiting delivery.

“You place the order and send full payment in advance. Then, a few weeks later, the supplier informs you of an additional cost increase,” he said. nothing else to do but pay the difference otherwise they will cancel the delivery.”