The paper manufacturing process is dependent on a number of resources that have volatile costs. Manufacturing inputs such as fiber, energy, labor and transportation can fluctuate dramatically based on world region and economic conditions. Naturally, many of these costs are passed along you. Paper buyers, who understand and track these production costs, tend to have more influence when negotiating their price. Better understanding the input costs can also make you better-equipped to explain price increases to your management.
When putting out requests for proposals from new suppliers, understanding underlying costs can help you identify the best prospects. Suppliers with lower costs and higher capacities are typically more stable and can offer better pricing. RISI’s Packaging Intelligence Center provides market data that will help you:
PIC gives you access to profiles of all major suppliers producing pulp and paper around the globe. You can evaluate your current suppliers and identify new ones based on parameters such as paper grade, capacity, location, cost levels, and others. You can also compare costs among producers and against industry averages. Visibility at this level means you can measure cost competitiveness and learn who is capable of offering better prices.
Track Production Costs
In PIC, you can continuously track production costs to understand how prices might change over time. Falling costs should indicate an opportunity for lower prices. Rising costs likely mean prices will increase. Input cost details are available by supplier and grade and can quickly be compared against industry averages. Buyers who follow production costs tend to have an easier time identifying emerging opportunities to secure discounts or preparing for a potential price hike.