Consumables

PRICE INCREASES NEEDED IN ALL BOARD AND PAPER BUSINESS

Sunday 08. June 2008 - Profitability in the board and paper industry has been sliding for a number of years. Costs have been rising heavily. The increase has been especially strong in wood and energy prices. At the same time, sales prices have not compensated for the cost escalation despite price increases for some grades. It is clear that price increases are needed to improve profitability.

In Finland, where the folding boxboard production units of M-real are located, production costs have risen 20 per cent since 2005, annual cost increase being 6-7 per cent. We have already announced new price increases in the USD and GBP markets. In the Euro markets the needed price increase of folding boxboard is minimum 10 per cent at the first stage. We will revert to the folding boxboard price increases in the near future.

M-real has announced a price increase for coated magazine papers between 6-8 per cent depending on product and market, and the implementation is ongoing.

For uncoated fine papers prices were increased in April and May. Further actions are under evaluation.
The price increase needs are greatest in coated fine papers. M-real plans to increase prices of its coated fine papers by a minimum of EUR 50 per ton. Negotiations are ongoing with customers.