Market: Paper shortage worries the printing industry


The topic of paper shortages, an issue that has been on the agenda since raw material prices on the world market began to rise, continues to preoccupy the industry. Even though, thus far, not all printing houses are facing bottlenecks, there is growing concern that they will no longer be able to meet demand.

Turbulence on the paper market – the Bundesverband Druck und Medien (bvdm – German Printing and Media Industries Federation) is not alone in recognizing that there is a need to talk about the situation. Supply bottlenecks for graphic papers are causing prices to rise in the printing industry. To date, customers are largely not feeling any of this, but the price spiral, which can be traced back to current inflation and the price of pulp, will continue. While the background, such as the Corona crisis and the Ever Given accident in the Suez Canal, is somewhat clear, it remains of interest how the industry is working with the current market situation. So far, the printing industry has responded to rising raw material prices with vigilance rather than with action. Cimpress CEO Robert Keane recently told Ludovic Martin in an interview that his company is feeling the crisis and some pressure but has “proactive plans” to avoid supply bottlenecks.

Augsburger Presse-Druck-und-Verlags-GmbH, one of the leading newspaper printers in southern Germany, is likewise feeling the effects of the crisis, but has not yet been severely affected by it: “We are still receiving our paper at the moment,” says Andreas Ullmann, the company’s head of printing. “There have been outages and shifts in supply, but production has not yet been significantly affected as a result.” For newspaper printing, he says, supplies in Augsburg have so far continued to be secured through long-term agreements with suppliers, but “We are feeling the paper shortage. The supply situation has turned around incredibly quickly within a few months, almost weeks, and has changed from overcapacity to bottlenecks. Orders, commitments, and deliveries are slow and are revoked almost daily. A high level of coordination and ambiguity are the order of the day. In the warehouse, inventories have been stretched more than usual.” According to Ullmann, the reduced output of paper suppliers for various reasons will continue to have an impact, especially on specialty paper. For this reason, Presse-Druck intends to order these paper grades even earlier than before in the future in order to have a buffer in case of need and also to continue to keep warehouse capacities high, which have already been extended to a greater extent across Corona.

The photo printing company Cewe similarly reports “effects of the shortage of raw materials”. According to CEO, Thomas Mehls, the higher prices will have to be “passed on in individual cases”. For which products exactly, is currently being discussed, he said. “Suhrkamp is running out of cardboard,” wrote the Süddeutsche Zeitung recently. Other publishers have reported that contractually agreed deliveries are being completely cancelled with reference to force majeure, Spiegel Wirtschaft reported on September 15, 2021. It is speculated in the article that the impending shortage of paper could cause the business model of publishers and publishing printers to collapse. For the other print market segments, it may not be life-threatening, but it is precarious.

On the sidelines of the “Forum der Grafischen Industrie” event of the Swiss Printing Industry Association (VSD), a sales representative of a traditional commercial printer confided in me that orders for periodicals for 2022 had currently gone out, but no wholesaler had submitted a quotation price, let alone a shipping notification. “We have a situation here that is completely unknown in Switzerland up to now,” he emphasized in the conversation and did not want to be named. Which I can understand, because there is the threat of losing print orders if publishers become concerned that production might be down.

The Austrian Print Media Association sees the onus not on the print shops but primarily on the paper producers. Back in May, stakeholders appealed to the paper industry to increase production. While the paper warehouses of printing companies were empty, the output of the European industry following numerous closures and restructurings had not yet been brought back into line with demand – little has changed in this respect to date. For their part, suppliers are insisting on higher paper prices, as the example of France shows. In view of the tense situation, it is surely only a matter of time before customers and end users also feel the paper crisis in their wallets as well as on their timesheets. The Peschke print shop in Parsdorf near Munich is therefore already advising its customers to submit orders as early as possible and to be flexible in their choice of paper.

My Take: The printing industry has long had to counter rising costs and falling prices for end products. Standardization, digitization, and automation led to the currently achievable optimum through prudent planning. But if there is a shortage of printing stock, production comes to a standstill. Now we are talking about supply bottlenecks and not a total organ failure of the paper producers.

When I think of the post-Corona era, we will have to reckon with further shortages. Basically, any shortage can be met with work, thrift, creativity, openness, solidarity, originality, and cooperation. So, it is not a matter of waiting around like sitting ducks. My impression is that many companies are incapable of acting – although there is a lot that could be done in a meaningful way. In this sense: God bless art!

Market: Paper shortage worries the printing industry
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Market: Paper shortage worries the printing industry
The topic of paper shortages, an issue that has been on the agenda since raw material prices on the world market began to rise, continues to preoccupy the industry. Even though, thus far, not all printing houses are facing bottlenecks, there is growing concern that they will no longer be able to meet demand.
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Founder and CEO of zipcon consulting GmbH, one of the leading consulting companies for the print and media industry in Central Europe. The technology and strategy consultant and his team actively support practical implementation in a wide variety of customer projects. His work involves developing visions, concepts and strategies for the players active in the print production process across a wide range of industries. His areas of expertise include online print, mass customization, strategy and technological assessment for print, and the development of new strategies in the print and media environment. Bernd Zipper is the creator and chairman of Initiative Online Print e.V. and, in addition to his consulting activities, is an author, lecturer and sought-after speaker, orator and moderator. His visionary lectures are regarded worldwide as trend-setting management recommendations for the print and media industry. (Profiles also in Xing, LinkedIn).

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