Offshore Paper Usage — Mixed Emotions on the Rise
“Yes, tons of paper are coming in from offshore. And, yes, paper prices are dropping,” says the purchasing manager of one of the nation’s leading printing conglomerates, who wishes to remain unnamed (to maintain strong relationships with domestic paper suppliers). “There’s a high volume of paper. Same quality, lower price. That’s great value, a great enticement to buy.”
Which is exactly what this major purchaser of paper (approximately 450,000 tons per year) was doing at the time this interview was conducted—buying paper from European suppliers at below-U.S. prices.
When a printer, or any business, is offered a good value, that’s an opportunity that should not be denied, the anonymous buyer emphasizes.
“We’re now in a worldwide, competitive market,” continues the purchasing manager. “Domestic suppliers have to be much more astute that our supply base is global, and it’s the right of any company to be as cost-effective as it can to receive maximum price reductions.”
But with the voice of both purchasing experience and power, this major buyer warns: “If you give your business to offshore suppliers, your relationship with domestic suppliers will most likely become tarnished,” which could come back to haunt the buyer if the global market dries up, and he or she has to turn to domestic suppliers again.
And that consideration is often factored into a paper purchaser’s strategy.
As R.R. Donnelley & Sons’ vice president of supply-chain strategy, Brian Kullman says he’s definitely seeing an influx of offshore paper. Kullman is also reading trade statistics, like those published by the American Forest & Paper Association, “which clearly report an increase in offshore imports,” he says, noting that Donnelley is not buying any more offshore paper than it normally would.
“We’re working with our North American suppliers to keep pricing competitive with offshore paper,” Kullman explains. “We see these suppliers as the best strategic source for coated free sheet.”