Corrugated industry faces autumn with extreme concern

Uncertain prospects in the field of energy supply and massively increased raw material, transport and energy costs are causing the corrugated board industry to look ahead to the coming months with extreme concern. Compared to the overall burden of cost increases, only insufficient adjustments have been made to the price level for corrugated board, explains the Verband der Wellpappen-Industrie e. V. (VDW). Nevertheless, the industry continues to reliably ensure the supply of the number one transport packaging and thus makes an indispensable contribution to maintaining supply chains.

"The drastically increased price level of our most important raw material, corrugated base paper, has been presenting our industry with ever new stress tests since September 2020," notes VDW Chairman Dr. Steffen P. Würth. "Against this background, a slight decline in the overall price for corrugated base paper, recorded for the first time again in July 2022, must be regarded as a drop in the ocean. It does not change the considerable distress in which our industry has found itself for some time," Würth emphasises.

The overall price level for corrugated base paper had risen by a total of 85.3 per cent between September 2020 and May 2022. "A direct comparison with the price of our product made from it makes it abundantly clear how wide the gap has widened here: The price level for corrugated board in May 2022 was 43.2 percent above the level of September 2020 - the paper price increase, on the other hand, was about twice as high", explains the VDW chairman. Cost increases for other important raw materials, as well as in the areas of energy and transport, had a considerable additional impact on the corrugated board industry. For example, according to the Federal Statistical Office, the price of starch and starch products has risen by 81.1 percent between September 2020 and July 2022. Starch-based glue is needed to glue the paper webs together to make the finished corrugated board and is correspondingly important for the industry.

According to the Federal Statistical Office, the cost of gas sold to industry rose by 448.3 per cent between September 2020 and July 2022. In the case of electricity prices, special contract customers in industry had to accept a total increase of 172 percent between September 2020 and July 2022, according to the Federal Statistical Office. The freight cost index determined by Verkehrsrundschau shows an increase of 18.3 per cent in the development from the second quarter of 2020 to the second quarter of 2022.

"Two thirds of all transport packaging in Germany is made of corrugated board - the companies organised in the VDW thus make an indispensable contribution every day to ensuring that industry, trade and consumers are reliably supplied. We want to continue to live up to this responsibility. In return, however, our industry must be able to count on no longer bearing a disproportionately high share of the overall dramatically increased cost burden", was Würth's urgent appeal.