This announcement could have a significant impact on the global paper supply chain. L&NW recently sat down with Jeroen Diderich, vice president and general manager, Avery Dennison Label & Graphic Materials, North America, to explore this situation further.
Diderich: The direct impact we are seeing from the Finnish Paperworkers’ Union strike at UPM is on liners and facestocks, specifically semi-gloss, glassine, SCK and CCK papers.
At the beginning of the strike, we were seeing some disruptions on semi-gloss paper and were taking action to mitigate the impact on our customers as much as possible. With the extension of the strike to at least February 19th, we are forced to extend the mitigation actions.
Given that UPM supplies paper and pulp globally, we expect that there will be effects on the paper supply chain more broadly.
Diderich: Since the announcement of the situation in Finland, we have been working with our other suppliers to decrease the gap in paper supply for us and our customers. With the situation lasting longer than anticipated, we have added additional mitigation tactics in order to protect our customers’ business as much as possible.
We are working directly with our customers who purchase the affected products to determine if an alternate PET material can be accepted temporarily. In order to try and protect service levels for our customers, we are also restricting order volumes on some specs temporarily. Our sales and customer service teams are focused on helping customers find an alternative Avery Dennison product or manage their order volumes.
Diderich: We can’t comment directly regarding the ongoing situation between UPM and the Finnish Paperworkers’ Union, but we do hope that they reach an agreement soon. This has a large impact on the global paper and pulp market, which was already under stress from increased demand.
Diderich: We expect that for the first half of this year everyone in the industry will feel the burden from this situation. Other paper suppliers are likely feeling increased pressure and demand from label manufactures to supply the gap in material customers would have normally received from UPM.
Label manufacturers will be forced to restrict order volumes and delay orders. Label converters will feel the effects of smaller order quantities in a period of continued high demand. We hope that the situation will be resolved soon, but we will continue to progress our supply continuity plan to be prepared for all outcomes.
