Australia’s ‘big three’ paper merchants – Paperlinx, KW Doggett and BJ Ball – have announced paper prices will rise by as much as 8%.
Printers have been informed of 7% increases at Paperlinx, effective yesterday, while there will be upcoming hikes on some KW Doggett stocks of 7%.
When the 6-8% price rise takes effect at BJ Ball, it will mark the second hike in three months following a 5% price increase in September.
BJ Ball general manager Craig Brown said the price rise was down to a triple economic threat.
“The factors in the increase are three fold: paper prices remain low, the costs of doing business continue to increase and orders of paper volumes continue to contract,” he said.
“The bottom line is that we need to get more margins to maintain our position as a leading low-cost paper merchant.”
KW Doggett national marketing manager Catherine Doggett told ProPrint that the merchant’s price increases would come into effect on 5 December.
“It is about getting back to a sustainable business model,” she said.
“We have continued to absorbs costs into the business such as freight, electricity and occupancy, but it has gotten to the point where the margins don’t sustain these costs so we must pass them onto the customers,” she said.
“Paper prices have been at a historically low level and it has come to a critical point at the busiest time of the year. Despite our best endeavours to keep our price at a low rate, we got to the point where we can’t maintain those prices anymore.”
Doggett added that although customers were never happy to see price increases, they understood the reasons for the hike and had been accepting of it.
A letter sent to Paperlinx customers said the paper merchant could no longer “be insulated from the economic maelstrom” the company found itself in.
“Exacerbated by rising input costs, inflationary pressure and exchange sensitivities our operating companies are ongoing aggressively recalibrating to what can only be described (as we have seen in many other global markets) as a marked and permanent structural shift in print volumes and raw material demand,” said the letter.