Mandatory non-financial statement also extended to SMEs

The Covid-19 pandemic has substantially changed our purchasing habits and people's freedom of movement, requiring many businesses to adapt their services to remain competitive on the market. With successive lockdowns over time, several companies have had to reinvent themselves in some way: just think, for example, of the catering sector, which found itself with the sole option of selling its specialties through takeaway and home delivery. E-commerce, on the other hand, experienced a surge in requests at a time when shopping was not easy to secure various types of products, from groceries to technology, always at the best prices. What are the effects of the pandemic on the production sector? In the long run, this health emergency situation turned into a production emergency. In fact, the price of raw materials is rising, with a substantially significant impact on the cost of the final product. A striking example is waste paper, which went from an estimated 11 euros per ton in February 2020 to the current 140 euros per ton. Pure cellulose has also recorded a significant increase. In addition to the higher demand for packaging products within the paper sector, especially from the pharmaceutical and food sectors, we also note a difficulty in sourcing raw materials. The climate of uncertainty has triggered a rush for supplies that is forcing recycled paper suppliers to reduce their production capacity. An increase is also recorded in the costs of the finished product, as these factors have forced paper mills to raise their prices by 5% to 10%.  The price increase does not only affect paper, but also plastic, wood, copper and, in the food sector, wheat. Why does the crisis in the packaging sector affect all production sectors? It is impossible to think of a product without packaging: the latter is an integral part of a supply chain. Indeed, packaging is fundamental for various sectors, such as Food & Beverage, pharmaceuticals, and industry. The increased demand for corrugated cardboard boxes is also correlated with the growth of e-commerce. Demand has increased for products that allow for easy and safe transport. Paper weight and its resistance are the most sought-after characteristics. What are the effects of price hikes on packaging paper? Unfortunately, price tensions regarding waste paper and other materials contribute to increases in the cost of the final box and intermediate products. This price hike then translates into a general increase in prices, which are passed on to the final consumer, affecting the product's competitiveness and also impacting its shelf life. We must not forget that the pandemic has also reduced the purchasing power of many people, so a sequence of price hikes could make a product less appealing and limit or cancel its purchase, especially if it is non-essential goods. Intervention is needed to ensure that the paper sector maintains a sustainable production that can remain competitive. This is the challenge facing the Italian market, so that it can maintain a high level of quality and accessible costs.  The hope is that the holiday months themselves will act as a driving force for the recovery of consumption, making paper for recycling more available and mitigating the prices of waste paper.

The upward trend in prices shows no signs of slowing down, now reaching 70% for cellulose; and while we have been witnessing unprecedented increases in raw materials (such as steel, wood, and gas) for six months, we are forced once again to question the future of production supply chains, put to a severe test by prices that are now skyrocketing. Italian companies are further burdened by increases regarding energy costs, making it necessary to find solutions to avoid halting entire production chains. In particular, the companies facing the greatest difficulties are micro, small, and medium-sized enterprises, upon which falls a double sword of Damocles represented by the cost of raw materials and energy. Data from Confartigianato shows that the most "expensive" effect is evident in the North-East of our country, home to numerous companies and businesses, including family-run ones. In this area, the rise in raw material prices weighs on micro and small enterprises by 3.3% of GDP.  The impact has also swept through the North-West, affecting it by 2.8%, while for micro and small enterprises in Central Italy, the impact drops to 2.3%; the lowest impact is recorded in the Mezzogiorno, standing at 1.8%. The issue of the unavailability of raw materials puts the very existence of companies to a severe test, forcing them to turn down orders both due to the difficulty of sourcing raw materials and the impossibility of honoring quotes made months ago.  Confartigianato announced that the percentage of companies operating in the construction sector reporting materials shortages as an obstacle to production rose to 9.5% in September 2021. Raw materials: how they affect economic recovery The high cost of raw materials and their unavailability represent an obstacle to recovery. Despite increasing orders, we are witnessing a slowdown in investments as well as innovation processes, and the demand for labor is falling. Some are even attempting to access social safety nets.  There is a growing need to monitor speculative maneuvers; therefore, the introduction of price control mechanisms, as in the case of the energy sector, would be appropriate. How the packaging sector is facing the crisis  The restart within the packaging sector brought about an increase in requests, but successive lockdowns and restrictions had previously forced businesses to slow down. In doing so, a gap was created between market demands and actual response capacity. Currently, the packaging sector is weighed down by price increases in cellulose, in addition to the costs of waste paper and gas costs, which have now skyrocketed. Some paper mills are thinking of countering the situation by temporarily suspending operations, all to avoid producing below cost. The overall picture of increases puts production to a severe test: for instance, long-fiber NBSK has seen increases of 60%, while it amounts to 70% for short-fiber eucalyptus. These increases translate into a price per ton of 1,350 dollars for long-fiber and 1,150 dollars for short-fiber, according to Assocarta data. Paper and cardboard for recycling have risen by 138% and 143% respectively, marking prices from 155 up to 170 euros per ton. Therefore, anyone wishing to purchase raw materials for recycling pays much more for them. What are the reasons for the price increases in paper and cardboard for recycling? The advent of the pandemic changed our purchasing habits. On one hand, there was a greater demand for packaging due to the explosion of e-commerce and the creation of packaging destined for takeout. Furthermore, the increased demand for sustainable containers led to paper and cardboard being identified as the primary candidate for replacing single-use packaging. It must also be considered that the paper sector is among the most energy-intensive. The increase in the cost of gas, as also reported by Assocarta, has been rising since the summer of 2020 and unfortunately tends to grow without showing signs of slowing down. This has significantly impacted the finished product. At times, price increases are equal to 5%, and even up to 10%. For this reason, according to some paper mills, it will be necessary to halt production, at least until more affordable gas costs can be accessed. How much does the cost of energy impact the cost of packaging? According to estimates reported by Il Sole 24Ore, energy represents 30% of the total costs incurred, and therefore, even if turnover tends to increase precisely because of a greater demand for paper and cardboard packaging, profit margins tend to narrow due to high energy costs. Among the most affected sectors is tissue: we are talking about sanitary and household paper, because this segment, due to its type of production, needs to secure agreements lasting at least six months, a timeframe too long to allow for the forecasting of final prices. How much do the new EU regulations on packaging influence price increases? As we have repeatedly explained in previous articles, packaging is at the center of a revolution. The need to reduce or eliminate plastic volumes within packaging has caused the demand for cardboard to soar. Faced with a stable production capacity, an increase in cardboard demand was generated, which in turn, in this delicate situation, caused a general price hike: Linerboard with corrugated medium → +65% Graphic paper → +15-20% Tube paper → +55% Paper and cardboard are among the most recyclable materials. In our country, we have achieved a good level of circularity regarding paper collection and recycling, giving life to a more sustainable production cycle. At the moment, a large volume of orders is being recorded, but it is impossible to fulfill them. As pointed out at the beginning, the e-commerce boom made manufacturers aware of the need to provide a massive amount of packaging.  How should packaging production be rethought? The crisis in the paper sector also asks us to rethink our relationship with packaging which, especially regarding primary packaging, carries aesthetic value, product recognition, and so on. At present, efforts are being made to review the concept of packaging, particularly based on functionality, so as to align production and optimize it solely and exclusively to meet specific needs. While we have already talked in the past about packaging design in terms of resource savings and waste reduction, this requirement has now become a true diktat to be followed.

Ecogrip Delivers the sustainable multi-packaging of bottles. 100% recyclable corrugate Sustainable alternative to single-use plastic Complete solution for bottle multi-packs Blue Box Partners, the pan-European Alliance of suppliers for corrugated board packaging solutions, has launched ECOGRIP, a corrugated alternative to shrink wrap for the multi-packing of a wide range of bottles that builds on the growing consumer demand for sustainable packaging. Research has shown retailers and consumers are wanting more sustainable packaging solutions when they make purchasing decisions. Moreover, the EU’s single-use plastic (SUP) Directive, which came into force on 3rd July 2019, aims to reduce the impact of certain plastic products on the environment. This has caused large brands and manufacturers to re-evaluate their packaging strategies and seek out alternatives. ECOGRIP is designed to replace single-use shrink-wrap plastic for bottles between 330ml and 1.5 litres, providing a recyclable and biodegradable corrugate solution for multi-packs. Adaptable to the many different bottle styles on the market regardless of diameter, it provides brands, retailers and consumers with a sustainable multi-packing solution for four, six or eight bottles. The ergonomic design makes it easy to transport, handle and store and the corrugated board can be customised through a variety of print technologies for maximum brand and on-shelf impact. “Every business is now focused on sustainability” said Armin Höttges, managing director at Blue Box Partners. “While we continue to see improvements in recycling rates for many packaging products, secondary packaging such as shrink-wrap falls into the category of single-use plastic which can create issues if not disposed of responsibly. This has resulted in considerable pressure from governments, environmental groups and consumers - all of whom are demanding packaging which is more sustainable and the launch of ECOGRIP now delivers a solution for brands that want an effective multi-packing option.” Blue Box Partners is the alliance of VPK Group, Klingele Paper and Packaging Group, Hinojosa and Cart-One, who together offer expertise and collective intelligence, delivering local solutions across Europe. Working with brands to develop packaging solutions that not only solve their current issues around single-use plastic, but also provide sustainable packaging solutions for the long term, the launch of ECOGRIP is the perfect example of the partnership. Available through all Blue Box Partners members and with both manual and automated packing options, ECOGRIP provides consumers, retailers and brand owners with a complete solution for the sustainable multi-packing of bottles.