Increased fibre cost pressure reported by Smurfit Kappa

Europe – Leading paper products manufacturer Smurfit Kappa, which operates some 370 production sites in 34 countries, has reported year-on-year revenue growth of 6% for the opening quarter of 2017, with good corrugated volume growth highlighted as a key driver. However, the group also points to mounting raw material cost pressure.

In European recycled containerboard, the group implemented a Euro 60 per tonne hike in the first quarter, with additional increases announced for April.

‘Overall demand for recycled containerboard remains robust, with industry inventories remaining tight throughout the quarter,’ the group notes.

It adds that the higher prices were achieved ‘against a backdrop of increasing recovered fibre costs, which were over 19% higher year on year for the quarter and 11% up in March 2017 over December 2016, reflecting high levels of both local and global demand’.

Group ceo Tony Smurfit comments: ‘These results, against a backdrop of significant recovered fibre cost inflation of approximately Euro 30 million year on year, reflect the continued strength of our business. We expect improved margins as paper price increases translate into higher box prices.’