You have probably heard that the global paper market is currently very unstable, with no clear indication of when this is likely to improve.
Reasons for instability in paper supply:
- Raw material shortages such as pulp and chemicals – Russia is a large producer of paper and since the start of the conflict, both production and the supply of trees for pulp has ceased. Also, FSC and PEFC have now labelled Russian and Belarusian timber as “conflict timber”, which has had a major knock-on effect.
- Temporary plant closures – A drop in paper demand and workforce challenges caused by COVID.
- Strike Action – Finland is one of a number of countries that are a large paper supplier, and they are currently experiencing a 70 day strike in their paper mills, causing a halt to all production.
- Logistics – Transportation bottlenecks as companies struggle to hire enough truck drivers during the current HGV driver shortage crisis.
- Decrease in imports of international paper stocks due to shipping and transportation costs skyrocketing.
- American & Indonesian markets are struggling to compete in the UK market as shipping costs have increased up to seven times more than they were two years ago.
- Paper production, including the cost of raw materials and manufacture, have increased exponentially, some double or triple what they were. As a result, it is uneconomical for many paper mills to keep producing paper with many of them having to close.
- Permanent plant closures resulting from bankruptcies.
So… while the issues at hand raise many challenges, you can be assured, as ever, that Encompass have been working hard to ensure we can help you in these turbulent industry times.
Our counter measures – we have:
- Increased our stocks of Thermalrite (thermal roll labels) massively.
- Invested in a new in-house machine to manufacture our own labels.
- Broadened our supply chain and bypassed the European mills to enable the supply of raw material from the Far East to convert ourselves.
- Access to a greater range of products. Our existing supply chain within the UK is healthy with existing links and access to many suppliers. This gives Encompass the edge of being able to source a wider range of products other than those who ONLY manufacture.
- In essence, Encompass will do everything we can, to ensure our valued clients are not caught short!