Dogged by the downturn, the pulp and paper industry has slowly recovered over the past months to the extent that it has been flagging for price increases to boost profitability. Now for the affected categories purchasers this was old news, but no-one was counting on the perfect storm that hit the industry in the last week.
- The earthquate in Chile
News reports indicate that 7 percent of global pulp capacity is shut down. - Severe weather conditions in Scandinavia
Rail transport has been at a standstill and is still not at 100 percent capacity interrupting many supply chains. Hallsberg, the main rail hub in Sweden has been at a standstill for 12 days and Green Cargo estimates losses of 30-40 million SEK according to Dagens Nyheter. - Transport workers strike in Finland
While road transport is back to normal, dock workers went on strike this thursday effectively shutting down all finnish ports. Both Stora Enso and UPM-Kymmene has flagged for mill closure due to the strike.
With pulp costs rising higher than expected, purchasers are in a tough spot. I wonder if any risk management initiative could have seen all of this coming in a once. It also makes one wonder which category will be the next in line.
