Printers and publishers rally behind Nippon Paper but forced to find alternatives

The Japanese manufacturer suffered damage to a number of production sites following the earthquake and tsunami on 11 March. The Ishinomaki mill is a major supplier of web grades for the Australasian heatset market.

In a statement on 17 March, Nippon Paper Group confirmed damage to the Ishinomaki, Iwanuma and Nakoso mills.

It is unknown how long it will be before the mills are back on line. Local customers told ProPrint they had been advised Nippon would be back to full production in six to nine months.

PMP chief executive Richard Allely said the trans-Tasman group was just one of many local companies affected by the mill closures. “We would be the largest consumer of NPI [Nippon Paper Industries] paper in Australia but I think many people would be in the same boat.”

He said: “NPI is a very valued supplier that supplies high-quality paper and their service has been excellent. We support our suppliers and do what we can to look after them, especially in situation like this.

“But clearly we have customers we need to look after, so we have been successful in securing alternative supply, mostly from Europe and China.”

He said the impact would be that stocks “will cost a little extra”.

“Every time you switch supply, it will come at a small premium, though not excessive,” said Allely.

ACP Magazines said that while it procures a lot of stock directly from Nippon Paper, its spread of suppliers made it easier to manage the exposure.

Ian McHutchison, ACP’s general manager for procurement services, told ProPrint: “Obviously it impacted us and we have sent our condolences to the people of Nippon Paper and Japan. So we are… looking at other options and working with the Nippon guys to see where we end up.

“We have a fairly good spread of our risk. We don’t go with just one or two suppliers.”

McHutchison said the industry had rallied around Nippon Paper. “No one has looked to leverage anything out of it. Even from my conversation with printers, no [paper suppliers] have looked to make money out of it.”

It is thought that the New Zealand market is more reliant than Australia on Nippon Paper.

Kirby Paper handles Nippon stocks in NZ. Andrew Bull, chief executive of Kirby’s parent, BJ Ball, said: “Our immediate thoughts are with the population of Japan and our long-term partners NPI.”

Bull said he was “humbled by the support that our customers have shown in this unprecedented situation”.

He added: “Kirby Paper will continue to supply and support the heatset community in New Zealand and Australia for the immediate future and the long-term. We have sourced alternative supply in the short term and fully expect NPI to return to this region in due course.”

Webstar is a major customer of Kirby Paper, and the printer’s New Zealand general manager, Bernie Roberts, said the merchant had been “very active” in responding to the shortfall. “They have opened up other supply chains, they take it very seriously.”

He talked NPI stocks as “excellent products” with great on-press performance, adding that Webstar had secured alternative supplies.

Roberts said the wider impact “is an increase in cost”.

“We can source products but in some cases it has gone up considerably. We understand products out of different parts of China have gone up in excess of 20%.”

Roberts stressed that across “most of the market, particularly Europe, the suppliers have been sensitive and respectful to [the situation]. They have signalled price rises in six months time, but that is not out of character.”

Stora Enso managing director Paul Teague echoed this. He said Stora had picked up Nippon customers, but added: “We are not rubbing our hands together about getting more volume. In the interim, we are looking at ways to manage the supply chain.

“It will be a short-term supply situation for us and customers will go back to Nippon in due course,” added Teague.

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