More Reasons For Paper Shortages

prwhite

Administrator
Staff member
According to “The Target Report”, paper-based Industries are in flux as a result of changes occurring in the paper industry: printing & packaging companies are struggling to procure the paper they need, the grades required, when its needed and in sufficient quantity to fulfill customer orders. This has resulted in an abrupt turnabout for many companies; at least for the foreseeable future, days of paper plenty are over. Printing & packaging company owners report they are spending considerable time just procuring needed paper stock.

Distributors are also enforcing paper allocation schemes, based on prior years usage, that’s hindering their growth. Credit terms have also tightened, with slow payers cut off or required to adhere to self-liquidating payment policies. Price increases have become routine and printing companies have been buying whatever paper they can get, whenever it becomes available, and stocking up.

Exacerbating the problem, paper manufacturing is consolidating. In a transaction announced in May 2021, and closed late last year, 175-year-old publicly listed Domtar was acquired in an all-cash deal for $3 billion by the relative newcomer privately-owned Paper Excellence Group. Domtar is currently on its way to complete converting a printing & writing paper mill in Kingsport, Tennessee, into a containerboard mill. The conversion will be complete in late 2022, and the mill re‑configured to supply regional corrugators with products made from 100% recycled fiber. As a result, there will not be any more printing grade papers emanating from this mill.

Likely to be the most significant transaction impacting the printing industry is the sale of what’s left of Verso to Swedish paper company BillerudKorsnäs. The impact of this transaction will be keenly felt by the printing industry over the next 7-years, as BillerudKorsnäs executes its plan to convert approximately three-quarters of the acquired paper making capacity to paperboard grades designed for packaging applications. Escanaba, Michigan—the largest in the Verso portfolio—is scheduled to be completely converted over to packaging grades.

The resultant loss of capacity to produce printing grade papers will further tighten supplies to the commercial, book, direct mail, catalog, label and publication segments. See more detail about the transactions that have impacted the conversion to brown paper, as well as the move to specialty niches within the larger paper industry.
 

jwheeler

Well-known member
Maybe this will encourage someone in the USA to start new paper companies as demand increases for paper product. (I can dream).
I was thinking the same thing after I read this. I can't even begin to imagine the investment and undertaking it would be to start manufacturing paper...but yes, hopefully some big investors realize the potential and start something soon! (Or maybe start up some old mills that are sitting idle).
 

scotts

Well-known member
Well, we all have machines that can print white ink now. So no problem. Use packaging paper and lay down a flood of white and it looks just like the old paper. Problem solved. ;) And hopefully with the paper cost savings, it will make up for the extra ink costs.
 

DYP

Well-known member
I was thinking the same thing after I read this. I can't even begin to imagine the investment and undertaking it would be to start manufacturing paper...but yes, hopefully some big investors realize the potential and start something soon! (Or maybe start up some old mills that are sitting idle).
As we move away from free markets into heavily regulated socialism the chance of that happening will probably be pretty low. With the Chinese behind the owners of most of our paper mills that doesn't help either.

It is really scary that Verso is about the only paper we can get right now.

My biggest worry is the distributors being able to stay in business, and now getting a new distributor to take you on a new customer is nearly impossible.
 

Shawnd

Well-known member
As I am reading this my paper distributor calls and says my standing backorder has been canceled for Gloss Cover since the Mill won't let them know when it will be delivered 🤬
 

TJPrinter

Well-known member
I was told that rolls take priority at the mills. No sheeting and packaging, just load and out the door. My sales rep said there are printers that are using their Didde presses just to do sheeting now. I’d like to remain positive but what I’m reading tells me things are going to continue to get more challenging in this business.

I have 3 time the paper in stock that I normally have, I’m not a hoarder it’s just the new reality. Don’t expect the mill or your distributor to be your warehouse any longer. What was once a simple next day paper delivery is now 4-5 days, if you can find what you need.
 

warlegs

Active member
I was running business cards on 13x19 cover stock for years... Now after switching to multiple different sizes, I have found myself only being able to get 8.5x11 stock lol Thankfully we only do them for one client every so often. Sheesh.
 

Dmiller35

Active member
I have 3 time the paper in stock that I normally have, I’m not a hoarder it’s just the new reality. Don’t expect the mill or your distributor to be your warehouse any longer. What was once a simple next day paper delivery is now 4-5 days, if you can find what you need.
Same. I'm not hoarding, just trying to make sure we have what we need on hand. We saw a little increase for the primaries but I'm really dreading election season later in the year. Cover stock is already hard to get a hold of.
 

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