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Rising paper prices: how to reduce costs?

November 16, 2022

In a context of skyrocketing inflation induced by the raging war in Ukraine and an economy that is painfully recovering from two years of pandemic marked by production plant shutdowns, the paper industry has not escaped the recent economic uncertainties.

The paper industry includes all workers and companies involved in the manufacture of pulp, paper and paperboard from wood or other fibers.

In 2017, the global production of this industry was nearly 420 million tons of paper and cardboard. The main producing countries are China, the United States and Japan, while France is only thirteenth, producing over 8 million tons of paper per year. In France, more than half of the production was dedicated to packaging paper and nearly a quarter to graphic papers.

What accounts for the rising cost of paper in recent months? 📈

First, some key figures:

  • 1,300 per ton: that's the cost of pulp today, which represents the first impact on paper prices
  • 45% increase in paper prices in less than 6 months

Example of the real impact: La Voix du Nord (a French local newspaper) consumes 12,000 tons of paper per year. In less than 18 months, i.e. since January 2021, prices have risen by more than €300 per ton. Today we are close to 800 € per ton of newsprint. In one year, this represents 3.6M € more expenses for the newspaper.

Source: France Inter - 14 juin 2022. Prix du papier : vos journaux menacés

Source of the image : https://www.bookletsprint.fr/blog/crise-du-papier-point-sur-la-situation-fin-avril-2022-1-2/

Pourquoi le prix du papier augmente-t-il ?

  • 🦠 A broken supply chain - Covid-19 and containment.

The first reason that often comes to mind when talking about shortages or price increases is obviously the pandemic! The paper industry has not escaped the lockdowns which have had a double impact: on the one hand on the increase in demand for paper due to a sudden rise in online shopping and home deliveries which often come with paper packaging. On the other hand, the industry has been forced to juggle with the confinements involving slowdowns in activity (less manpower, delayed deliveries from China...). With the recovery of consumption after the confinements, the demand for paper increased sharply and suddenly, causing transportation and raw material supply difficulties.

  • 💰 The cost of energy - The war in Ukraine: often blamed for rising prices, what is it really?

The war triggered a halt in Russian gas supplies to Europe, leading to a rise in prices on the continent, for which Russian gas represented 45% of its natural gas imports. This energy cost has an impact on the production of paper, which is very energy-intensive because the paper pulp is 98% water and must be dried.

It is estimated that 300,000 liters of water and the energy equivalent of 2,000 liters of oil are needed to produce approximately 1 ton of paper. And the energy consumption reaches 5,000 kWh to manufacture one ton of paper.

Sources: UFC que choisir et ConsoGlobe

  • 🗞 The return of paper! First perceived as old fashioned paper is back in fashion. What are the causes of this?
  • Following the confinements people read more than before. And with the Culture Pass, certain genres of literature have exploded: manga sales have increased by +124% in 2021.
  • The rise of e-commerce has put a lot of pressure on the sector with a growing need for cardboard and paper (packaging, protection ...). A simple example: since Covid-19 food deliveries have doubled.
  • The competition of cardboard with the progressive replacement of plastic: cardboard is gradually replacing plastic which is banned from packaging (in fast-food for example). But it then enters in direct competition with paper for the use of the paper pulp.

What solutions to reduce paper costs?

  1. Produce less, produce smarter

With the rise of online ordering (whether for consumer goods or meals), less unnecessary packaging is a must. We have all found ourselves with several kraft paper packages for a single hamburger and a few fries, realizing the absurdity of such packaging. This overconsumption of paper is a double cost: environmental and financial.

It is therefore necessary to take a step back on our production habits.

  1. Digitize

If in some industries, such as newspapers, paper is indispensable, many sectors of activity can actually optimize their traditional operations and switch to methods that drastically reduce their paper-related costs.

The best solution: digitization! Faced with rising costs, some newspapers have been forced to reduce the number of printed pages and rely on their online version. But far from being a simple constraint, it is a real opportunity. Indeed, the digital format allows to diversify the content and to enrich it with videos and interactive images.

Digitization can affect all areas: from paper museum guides replaced by QR codes to restaurant menus.

What about the user manual?

It goes without saying that the increase in paper costs will have a direct impact on the production costs of paper instructions. When you know that an instruction manual is on average several dozen pages long, there is reason to worry!

But you can always decide to digitize your manuals! For this, Pimster offers a platform dedicated to the digitization of your manuals, to make them dynamic and accompanied by videos and images.