Print and paper industry reeling under huge price hikes

The cost of paper, cardboard, printing supplies and related products have skyrocketed since the end of 2021, leading to a price hike of around 50% over the past few months, MaltaToday has learned.

Rising fuel prices, high demand, supply chain disruption and the Russian invasion of Ukraine have all contributed to the price increase.

Local business owners have already had to lay off staff and are now concerned that any further significant increase in costs could be catastrophic to their businesses.

Richard Gatt, owner of RGS Supplies Ltd, said the price of paper and board supplies had risen drastically in the past few months. But even more worrying was the increase in freight charges, which have also been raised because of the rising price of oil.

“At the end of 2021, I was paying €3,800 to get a container of supplies to Malta,” he said. “In April I had to pay €8,000.”

Gatt said sourcing material and products was becoming more difficult. Prices in Italy and the far East have skyrocketed, so he is currently focusing on buying material from Turkey, where the price hike has been slower.

He said that the Ukraine crisis and the resulting sanctions had played a part too. Two large mills in the Ukraine had ceased production while sanctions made it impossible to deal directly with Russian mills and exporters.

“These price hikes are happening across the board and are not restricted to our industry,” Gatt said. “However, if the price of fuel keeps rising, we could be in serious trouble.”

Alex Pace, owner of a printing and copy bureau and a large-format print and signage business, agreed. Plain copy paper had risen in price by between 35% and 45% while other paper, board and related supplies have risen by at least 45%.

“The problem is that although we had to pay an exorbitant increase in price literally from one order to another, we cannot pass this increase on to our customers,” he said. “This leaves us absorbing most of the cost ourselves.”

Pace said that the pandemic had dealt a severe blow to the industry. Now, the price hikes could very well prove insurmountable for many businesses.

Indeed, across the world the demand for paper fell during the COVID-19 pandemic, with a rapidly declining paper market already in decline for more than a decade as a result of falling demand for newsprint, magazines and office paper.

It was only because of the government’s wage supplement scheme that printing businesses, like many others, survived the two years of lockdown and restrictions.

But he still had to let a number of staff go due to the downturn in business and the rising costs incurred.

And Pace says it is not just paper products that have been affected. 

He sources rubberstamp mechanisms and peripherals from Austria. But where an order in December cost him €1,400 including shipping, a similar order last week cost him €2,300, an increase of 64%.

“There’s no way you can pass on such an increase to your customers, so we have to absorb the losses ourselves,” he said. “The situation is now becoming ridiculous.”

He said that, with the reopening of borders and suspension of restrictive measures, he was now looking forward to a swift return of the events and conference industry to drive up business again in the short term.

Another importer of paper and board told MaltaToday that prices were rising by the minute and that it is also becoming near impossible to source material globally.

And many major international suppliers are now applying allocations and will not fulfill a client’s order if it exceeds the allotted volume set aside for the region.

The source said the situation is bad across the board. Prices are rising daily, and deliveries are taking longer.

“We not only have to bear the excessive price hike, but we now have to wait eight weeks minimum for delivery, instead of the two to three weeks we were accustomed to.”

And some suppliers were applying surcharges even after an order was finalised and awaiting delivery.

“You make the order and send the full payment in advance. Then some weeks later the supplier notifies you of an additional rise in the costs,” he said. “There’s nothing else to do but pay the difference because they will otherwise cancel the delivery.”