The Federal Antimonopoly Service (FAS) will check the validity of a sharp rise in prices by paper and cardboard producers. Book publishers have complained to the service, warning that the rise in paper prices will force them to raise prices for their products. Paper producers attribute the rise in value to a deficit of waste paper, which began amid the coronavirus pandemic, as well as the fall of the ruble.
“Kommersant” got acquainted with the letter of the Russian Book Union (RKS) to the head of the FAS, Maxim Shaskolsky, with a request to check the validity of the increase in paper prices by its producers. The letter was sent on May 24th. The FAS “Kommersant” said that they would conduct an audit and have already sent the corresponding requests to the said paper producers.
22 thousand rubles
reached the cost of one ton of waste paper, according to the League of Waste Paper Converters
RKS claims that the cost of cardboard produced by OOO Proletary SPb increased by 50% in 2021, and the cost of offset paper by OOO Pulp and Paper Mill (CDB) Kama – by 33.9%. Production director of the publishing house “Alpina Publisher” (purchases materials from the “Proletary” plant) Konstantin Lun specified that the price increase was in April-May.
The Union notes that the cost of a paper book depends on the price of paper and cardboard, and the rise in prices for them “inevitably entails a rise in the cost of book production.” Raising paper prices in the context of inflation is a common practice, but earlier the growth did not exceed 7% per year, but now it “turned out to be egregious,” says Oleg Novikov, president of the Eksmo-AST publishing group. If the situation does not change, the cost of paper produced in Russia will equal “with imported paper from suppliers from Europe,” he warns. This could also lead to an increase in book prices “to a level comparable to the rise in paper prices,” says Oleg Novikov. Alpine Publishers will be “forced to raise the price of books in proportion to the increase in the total cost of production,” said Mr. Lun.
According to Kommersant’s information, press publishers are also preparing an appeal to government agencies regarding the increase in paper prices. They also warn of rising prices for their products. Lev Yelin, president of the Lev publishing house, says that prices for coated paper produced by Kama PPM, which is purchased by ID, have grown by 32% since the beginning of the year. In this regard, the final cost of magazines, according to his estimates, may grow by 16%. “You can switch to a cheaper paper that still meets the requirements of SanPiN, but I would not like to resort to this,” adds Mr. Elin.
The increase in the selling price compared to last year was 9.6%, a representative of the Kama group of companies told Kommersant. The share of GC in the offset paper market is 8.6%, and in relation to the entire paper market, including office, it is only 3%, the company says. The rise in prices is explained by the increase in production costs due to the rise in prices for raw materials and chemicals.
LLC Proletary SPB is one of the sellers of binding cardboard produced at the Proletary factory in the Bryansk region. The financial director of the factory, Vitaly Kalinichev, told Kommersant that in 2021 the price increase for bookbinding in April year-on-year was not 51%, as stated in the letter of the publishers, but 39%. “The fact is that the purchase price of waste paper, which is 60% of the cost of cardboard, has more than doubled over the year. The restrictions associated with the coronavirus have led to a decrease in the formation and collection of waste paper, ”he said. The deficit led to a sharp increase in the purchase prices for raw materials, said Vitaly Kalinichev. According to him, the cost of cardboard production increased by 55%, while the profitability of sales in 2021 decreased. “The price was also affected by the depreciation of the ruble, since the equipment is purchased in Europe,” added Mr. Kalinichev.
The cost of cardboard, packaging and raw materials for their production all over the world began to grow at the end of 2020 (see Kommersant on March 17). According to the League of Waste Paper Converters, at the beginning of the year the cost of waste paper reached a historical maximum – 22 thousand rubles. per ton. But due to high competition, processors cannot transfer the rise in raw material prices to the price of finished products, they said earlier in the league.
The rise in prices for paper and cardboard is observed in the largest markets, said WhatWood analyst Danil Parygin. “In the United States, for example, as a result of falling demand in 2020, more than 10% of the production capacity for the production of paper for printing was withdrawn,” the expert noted. Now the demand for paper in the United States has increased, but it is not possible to supply it with products, he says: “If demand exceeds capacity, mills charge higher prices to cover the increased costs of pulp, which has also increased in production costs.”