Print and packaging costs under pressure from political instability and environmental regulations

Will Green is news editor of Supply Management
29 September 2014

Print and packaging costs are being driven upwards by pressure on raw material prices, according to Flint Group.

The price of certain printing chemicals have risen by up to 50 per cent in recent months, while tension in the Middle East and Eastern Europe has affected solvent prices.

Flint Group said producers of “bon-acid”, used in the production of inks, had been hit by environmental regulations.

Jan Paul van der Velde, senior vice president procurement, sustainability, IT and regulatory at the printing and packaging firm, said: “Many producers of bon-acid had to shut down or invest very significantly into waste water management. As a consequence, bon-acid is now in short supply and will continue to cause issues as many suppliers in China and elsewhere do not have the financial capability to invest to meet the new regulations.”

Gum rosin, used in the production of paper and ink, has also seen marked price rises. “The market seems to have accepted that the 30-year average pricing of between $400 (£246) and $800 (£493) per tonne is something of the past,” said van der Velde. “After the peak in 2011, when gum rosin was trading at over $3,500 (£2,156) per tonne, pricing came down, but in Q3 and Q4 of last year it started trading up again.”

Flint Group said tension in oil producing countries had “started to have an impact on currency and crude oil pricing, directly affecting the cost of solvents”.

“I believe we will see a longer period of increased inflation levels, driven by energy challenges (crude and gas), geopolitical issues causing potential trade barriers, increased sustainability costs and generic economic growth,” said van der Velde.

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