23rd May 2022 – Development on the raw material markets sets the envelope industry under massive cost pressure.
The dramatically increased raw material prices in recent months and a lack of availability of envelope paper put the European envelope industry under increasingly pressure.
In the third quarter of 2021 the Veitsiluoto location of the Stora Enso in Finland had been closed which led to a shortage of envelope papers already last year. Then at the beginning of this year there was a strike of the UPM mills in Finland several months, which continued to tighten the situation and which will continue far beyond the end of the strike due to large delivery residues.
“The prices for envelope papers have more than doubled in our member companies in the past 12 months. In addition, the lack of availability of paper leads to shifting and long delivery times. Our industry is currently faced with problems on the raw material markets that we have not known since World War II.” According to a spokesman for the FEPE that represents the interests of the German and European envelope industry.
In addition to the paper prices, also window films increased at a double-digit size, as well as colors, glues, packaging materials, energy and freight have all become noticeably more expensive. An end to this development is currently not foreseeable.
Since material and freight make up to 75% of the manufacturing costs of envelopes, further significant price adjustments are essential. “Unfortunately, envelopes are becoming more expensive on a broad front, and here we are not taking about cent amounts, we are already in the range of several euros per 1000 envelopes due to the dramatical cost increases,” said the FEPE in a current statement.
As FEPE further emphasizes, it is almost impossible for the manufacturers to engage in contracts with long -term price binding, as has so far been often requested by the OPI industry and wholesalers. The risks of long -term contracts are now so great that some manufacturers prefer to resign than to bind themselves in long term contracts.
