Raw materials drive up cost of envelopes
Developments in the raw material markets are putting the envelope industry under massive cost pressure.
Düsseldorf, May 2022 (FEPE Office Germany)
Translated from German press release
The dramatically increased raw material prices in recent months and a lack of availability of envelope paper is putting the European envelope industry under increasing pressure.
In the third quarter of 2021, the Veitsiluoto location of Stora Enso in Finland was closed, which led to a shortage of envelope papers already last year. Then at the beginning of this year, there was a strike at the UPM mills in Finland lasting several months, which continued to tighten the situation and which will continue far beyond the end of the strike due to large delivery backlogs.
“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,” said a spokesman for FEPE, representing the interests of the German and European envelope industry.
In addition to the paper prices, window film prices also increased by double digits, while inks, glues, packaging materials, energy and freight have all become noticeably more expensive. An end to this development is currently not foreseeable.
Since materials and freight make up to 75% of the manufacturing costs of envelopes, further significant price adjustments are essential. “Unfortunately, envelopes are becoming more expensive overall, and here we are not taking about cent amounts, we are already in the range of several euros per 1000 envelopes due to the dramatic cost increases,” said FEPE in a recent statement.
As FEPE further emphasises, it is almost impossible for the manufacturers to commit to long-term price contracts, 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 stop production rather than to bind themselves to such contracts.
Dipl.oec. Udo Karpowitz (FEPE Germany)
About FEPE (Federation for envelopes and for light and ecommerce packaging in Europe)
FEPE is an international association representing more than 100 companies directly or indirectly linked to the envelope industry in Europe. These are envelope manufacturers envelope printers and suppliers to the envelope industry. Most of the members are located in Europe. However, FEPE has a number of international members who have an interest in European envelope manufacturing.
FEPE was founded in 1957 with the aim of supporting the industry and its members. In 2007, its office moved from Zurich to Brussels in order to be able to promote the industry in Europe in an even more targeted manner.