Another Paper Company Increases Prices

Magazine industry awaits coated groundwood rate hikes.

By Jason Fell
09/03/2008

Verso Paper has become the latest paper producer to announce price increases for a number of its products.

Effective with new orders and orders shipping on or after October 1, Verso is increasing the price of its Influence and Velocity branded coated freesheet grades by $60 per ton, the company recently announced. The price hike will be applied to all grades, basis weights and finishes for those brands.

Last week, coated magazine paper manufacturer NewPage Corporation said it was raising prices for nine of its paper brands effective next month. Earlier this year, European paper supplier M-Real raised prices for its magazine papers in the American and European markets.

Paper producers are expected to also raise prices for coated groundwood products—the most widely-used grades for magazines and catalogues. “While none of the major producers in North America and Europe have announced price increases for 2008 fourth quarter shipments, there is still a chance that they will,” Tom Pankow, Midland Paper’s general manager of procurement strategy, wrote in an e-mail to FOLIO:. “The price increases that have been announced to date are widely known to be due to rising costs of raw materials and energy—costs that the producers can simply no longer afford to absorb.”

Rate Hikes Hit Distribution

Unisource Worldwide—a distributor of paper, packaging and supplies—announced this week a fuel surcharge the company hopes will offset it’s rising costs.

“As all of us are painfully aware, fuel costs have escalated at a rapid rate in 2007 and 2008,” president of sales Ken Winter halter wrote in a letter to customers. “Up until this point, Unisource Worldwide has been able to offset these costs by maximizing our delivery routing and truck fleet utilization. Today, though, diesel fuel costs have reached a level for which Unisource can no longer compensate internally.”

Effective September 3, Unisource will add a $1.50 surcharge per line item for warehouse orders (capped at lines of the total order) and a flat $2 surcharge for orders made through its eCommerce platform.