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Ernesto Flores, Headquarters Plattling
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Unpredictable demand peaks intersect with continually rising prices for materials such as scrap paper and plastic granulates, while raw materials are becoming increasingly scarce and producers face persistent supply problems.
This naturally impacts the market conditions for producers of paper, cardboard and film, along with other mill industry enterprises. At the same time, many of the cross-border traffic regulations have been tightened during the pandemic. Consequently, cargo space is limited and freight costs are increasing. Energy costs are also on the rise (for example due to Germany’s new carbon tax) – with particularly heavy impacts for energy-intensive producers such as paper manufacturers.
The overall result: despite solid order levels, business margins are no longer acceptable. The issue keeping most producers awake at night at present is not the question of whether orders will continue to come in – it's whether they can continue to deliver, and whether production is sustainable when cost trends are not developing in line with the cost estimates. For the mill industry profitability is a key topic nowadays.
For example, the European Core Board Association noted that despite satisfactory volume trends, profits remain unsatisfactory. Members of the German corrugated paper industry association, Verbands der Wellpappen-Industrie e. V. (VDW) are also struggling with margins: although VDW members in 2020 actually generated more turnover than forecast, they were simply not able to compensate for the accumulated cost increases since 2017.
To add to this, the Association of Plastics Processing Industries (GKV) reports that a combination of supply issues, high material costs and unplanned logistics expenditure means that the sales for many products, for example in the electrical and electronics supply sectors, are no longer covering costs.
In order to remain profitable in this challenging climate, producers of paper, card or film need to react quickly. Nur mit Hilfe integrierter, digitalisierter Prozesse können sie diese Herausforderungen meistern.
Read T.CON GmbH & Co. KG’s new white paper to learn more about the challenges faced by producers of paper, film and packaging, and their strategies for responding to them. You’ll learn more about: how integrated digital processes throughout the value chain help companies work more efficiently.
Our new white paper offers a comprehensive insight into the challenges faced by many mill industry enterprises – such as producers of paper, film or cardboard. These enterprises can turn digital applications and processes to their advantage and thus massively increase their competitiveness.
