Cartonboard Costs Put Pressure On Needed Changes

Edited by the Printingtalk editorial team Dec 22, 2006

Increases in costs, especially energy, are putting an enormous strain on the cartonboard industry, according to Juha Yrjonen, the senior Vvce president of sales at M-real Consumer Packaging.

Increases in costs, especially energy, are putting an enormous strain on the cartonboard industry, according to Juha Yrjonen, the senior Vvce president of sales at M-real Consumer Packaging.

Juha Yrjonen concluded: "Under these circumstances, I think it will be necessary for the industry to make changes.

Continuing to offer extensive ancillary services as part of paperboard sales, for example, may need to be reviewed." He commented: "Since the beginning of 2004, both oil and energy prices have nearly doubled and these increases are also behind the soaring costs of transport and papermaking chemicals.

In addition, pulp prices have continued to move upwards.

Folding boxboard market prices, however, have now remained practically unchanged for the fourth year running, even though operating rates of folding boxboard machines have stayed at satisfactory levels during the same period." Yrjonen explained: "Market requirements for smaller deliveries, combined with shorter lead times, result in increased costs throughout the supply chain.

In addition, the need for technical improvements and efficiencies in carton production requires investment in board machine technology.

For example, M-real has developed lightweight paperboards, which bring cost savings to the whole chain, through to the final consumer." And he continued: "The investments we make to provide our customers with better service will not be achieved without an increase in cost." Some of the cartonboard industry's less efficient machines have been shut down and paperboard companies have started various efficiency and savings programmes, said M-real.

Those measures, however, have not markedly improved the profitability of the industry, as input prices have risen significantly during the past few years, whilst folding boxboard market prices have remained stagnant.