The Print and Paper Industries in The Face of Supply Chain Challenges
The printing segment has always been coping with supply chain pressures. With energy prices now skyrocketing, the industry is facing a new challenge. The shortage of paper in Europe has caused mill shutdowns and curtailments and some businesses are even on the verge of closing. How is the sector grappling with the energy crisis and other industry challenges?
The Supply Chain in a Precarious State
At the height of the pandemic, demand for production decreased. As a result, manufacturers laid off employees and reduced operations. As soon as the world awoke from the pandemic, the global supply chain couldn’t meet the high consumer demand. With limited supply on one hand and skyrocketing demand on the other hand, manufacturers have increased their prices which has led to print companies having to raise their prices as well. In addition, interruptions have occurred in supply, especially key materials like ink, paper, and printing supplies which are scarcer nowadays. Not to forget other socio-economic factors, including inflation, transportation challenges and labour shortage, that pose a threat to the print and paper industries.
In light of the above, now with many businesses back on track, print marketing materials, especially catalogs, brochures and so on, are highly sought-after. With reference to it, materials used during production including cartons, banding materials, pallets and plastic wrap are in short supply, as the manufacturers are struggling to acquire the raw materials to produce these must-have supplies. Adding to the challenges, a shortage of transportation trucks and drivers is taking a toll on the reliability of deliveries since delays are inevitable.
The Impacts of Gas Crisis on The Pulp and Paper Industry
During the current energy crisis, paper is definitely the leader in the supply chain challenges: the price of paper is rising due to its shortage and the increase in transportation costs, for example. Moreover, the pulp and paper industry is competing for raw materials with other wood product industries like construction, for instance. Nevertheless, demand for paper packaging will continue to grow since it can not only substitute plastics but the expansion of e-commerce also accelerates its usage.
Jori Ringman, director general of the European association representing the paper industry (Cepi), confirms the significance of the paper material as well as the paper industry:
“[…] [T]he pulp and paper sector remains in the leading position for its recycling performance, use of renewable energy, energy efficiency and sustainable sourcing.”
As a result of the uncertainty of gas and oil supplies from Russia, Cepi appealed to the government for support for the paper and pulp industry earlier this year. The organization pleaded with the authorities for the paper sector to be acknowledged as an essential supplier for major European value chains, such as the food, pharmaceuticals and essential hygiene industries. In addition, it is widely believed that interventions to supply might obstruct waste management operations as well as the EU-wide transport packaging value chain, which depends heavily on recycled material.
Best Practice: European Recycled Paper Leader Steinbeis Papier
As a pioneer, Steinbeis Papier launched its factory to recycle used telephone books in Germany back in the 1970s and to this day, Steinbeis Papier is a European market leader known for having blended economical sustainability in its manufacturing operations.
Ulrich Middelberg, head of IT at Steinbeis Papier, unveils the success behind the company’s circular production despite the gas crisis:
“We are producing recycled paper economically and sustainably. At our site in Glückstadt, our own power plant provides 100% of the thermal energy and 50% of electrical energy. Now with rising energy costs, it’s a real market differentiator for us.”
The sustainable paper manufacturer uses alternative fuel sources to produce energy for its plant that makes about 300,000 metric tons of printing and copying, offset, digital printing and label papers per year. On top of that, digitalization is equally crucial to lower raw material consumption for resources. Via digitalization and KPIs, Steinbeis Papier can track actual material usage which calls for action when data exceed certain thresholds. To sum up, recycling has become a primary element of the circular economy that will shape a sustainable future.
First, the pandemic aftermath and then the energy crisis: The global print and paper industries must stay on their toes and now have a new challenge on their hands. What is your take on the current situation? Leave us a comment below.