Press

Price Movements in The Packaging Industry – April/May 2022 Further to our announcements last month, as we expected price increases on all paper and plastic related products have been rife throughout Europe, largely as a result of the European energy crisis. We unfortunately have no option but to pass these on and have delayed these as long as we possibly could. Full explanations are as below along with a table demonstrating increase levels for the range of product that has been affected, along with the expected implementation dates for these increases. Paper & Corrugated – The Impact of Energy Costs on Paper Mills In the past month we have seen the paper/corrugated industry move like we have never seen before. The situation in Ukraine/Russia has created a major energy crisis throughout Europe, which is considerably worse than even expected (the main cost of production of corrugated products and paper is gas, other than the component raw material). There have been 8 major paper mills in Europe who have temporarily shut down in the past few weeks, as they cannot sustain energy costs at current levels, and several more have closed permanently, which may inevitably lead to a lack of availability again very soon (although currently there is plenty of supply).

Two of the ‘largest’ global producers of paper/board are DS Smith and Smurfit Kappa, both announced immediate increases of EUR 150 per tonne on paper throughout Europe, including the UK, with further surcharges to follow. This has translated to a market increase from most carton manufacturers of c.14%. We expect market pricing to rise by up to 35% in total in the market in coming months, and expect this to be very sharp sudden increases, unlike last year which was spread throughout the year. Plastics – PPT (Plastic Tax) & Rising Energy Costs The cost of LDPE has risen by £350 per tonne, hence we would expect further increases in the coming weeks from most manufacturers of plastic products, especially those containing virgin. The plastic packaging tax (PPT) is a further £200 per tonne but does not apply on product that contains more than 30% recycled content. This has affected products such as tape, foam etc. Whilst we naturally do our best to minimise turbulence in pricing, we do expect the following products to move in price in the next few weeks. We do not have finalised numbers on some of these products but have indicated below as best as we can the ranges which we believe may be affected. Please do take this opportunity to stock up as much as you can accordingly in the coming days/weeks – we are stocking up all we can at our three depots as well as at 3PL’s to delay these upcoming increases as much as possible: