1. RHINO EXERCISE BOOKS
GHP Market Updates
Last Amended: 01-06-2022
Since 2019, four major global crises have rocked households, organisations and supply chains, resulting in price increases, lunpredictable ead times, and product unavailability on an unprecedented scale.
This page will provide regular updates and insights into the paper market, including factors affecting rising prices and product shortages.
Our RHINO Exercise Books are manufactured in Tallinn, Estonia, by our main supplier and strategic partner, Victor Stationery.
Between July 2021 and April 2022, we have received five major Exercise Books price increases—a total accumulated increase of 80%.
| Effective Date | Price Increase | Acc. Increase |
| 18-Apr-22 | 15.00% | 79.84% |
| 01-Apr-22 | 12.00% | 56.38% |
| 01-Feb-22 | 17.00% | 39.63% |
| 01-Nov-21 | 10.50% | 19.34% |
| 01-Jul-21 | 8.00% | 8.00% |
These price increases are unavoidable and have been driven by a number of factors (detailed in section 2 – Market Overview) which have contributed to rising raw materials, energy, transport and packaging costs.
Each price increase is applicable to all goods delivered and invoiced on or after the ‘effective date’ and with lead times of up to 12-weeks for receipt of goods from Estonia, this can potentially affect hundreds of tonnes of incoming stock.
Due to the immediacy of these increases, we can no longer commit to longer notice periods, although we will always give as much notice as possible.
2. Factors Affecting Prices and Availability
As of June 2022, the paper market remains extremely volatile. Prices have surged, lead times are inconsistent, and availability is a growing concern.
These effects have primarily been caused by four major global crises:
- The COVID-19 global pandemic
- The 2021-22 global supply chain crisis
- The 2021-22 global energy crisis
- The 2022 War in Ukraine
2.1. COVID-19 & the Global Supply Chain Crisis
The social, industrial and logistical restrictions of the COVID-19 pandemic have had severe implications on global supply chains and as the market recovers, production and delivery has become extremely stretched, limited and in some cases unavailable.
- Supply chains were rocked when COVID-19 restrictions created and uncovered widespread logistical difficulties
- Varying government restrictions across borders significantly reduced capacity and caused unprecedented delays and disruptions at ports
- Previous challenges and issues, such as confusion and adaptation to new Brexit regulations and poorly managed systems, exacerbated the problems causing unprecedented bottlenecks, delays and disruptions
- Freight and shipping prices skyrocketed due to high demand and limited availability of shipping containers
- The virus caused mass staff shortages across all industries, due to illness and furlough, causing major backlogs in administrative and logistical activities
- In 2021, HGV shortages peaked, due to new Brexit regulations and the impact of COVID-19 had on the industry—in particular a lack of workforce and training to meet soaring demand
- Many American and Asian manufacturers suspended deliveries to UK and EU markets in the wake of these issues due astronomical shipping rates and global container shortages
- Resurgent strains of the virus, such as the Delta (2020) and Omicron (2021) variants, caused major setbacks
- Many paper mills have restricted production, closed entirely or converted to packaging grades, rather than fine paper and board, significantly reducing the volume of goods on the market, leading to product shortages and increased prices
- The industry is now facing unprecedented lead times—up to 6 months for production items and 3 months for stock items, and confirmed lead times remain variable and subject to change without notice
2.2 2021-22 Global Energy Crisis
One of the main factors driving price increases in 2022 is rising energy costs. Energy and wood pulp are the main cost components of papermaking: wood pulp undergoes a range of manufacturing processes (including heating, pressing, drying and finishing) that require a tremendous amount of energy.
These rising overheads have forced manufacturers to filter costs down the supply chain, meaning the entire paper industry is feeling the full effects of the ongoing energy crisis.
- From April 2021 to March 2021, the wholesale price of natural gas and electricity increased by 518% and 323% respectively
- For the same period, wood pulp prices have increased by 25%—although throughout this period prices peaked at +50%
- After COVID-19 restrictions were relaxed, industries reopened causing a huge spike in energy demand—particularly in Asia
- The increased demand coupled with the particularly cold European winter of 2020-21, caused diminished gas reserves at key sources such as Russia—which supplies the EU with 40% of its imports—and sent energy prices soaring
2.3 2022 War in Ukraine
Russia’s deplorable invasion of Ukraine has also affected the supply chain.
The main impact on the paper industry have been felt through the invasion’s impact on energy prices, which have contributed to rising prices as manufacturing and transport costs reach record levels.
- Energy prices soared after the invasion began on 24 February 2022 and have been extremely volatile ever since
- Subsequent European sanctions, including the cancellation of the Nord Stream 2 pipeline, has pushed prices record levels with further increases extremely likely
- On 31 March 2022, Russia demanded its gas payments be made in Russian rubles and has suspended supplies to states that do not comply, including Finland and Poland—both are major producers of paper
- Many paper manufacturers have ceased operations in Russia, including Stora Enso
- Raw materials delivery delays are expected after it has been reported that Ukrainian haulage drivers in Western Europe are returning home to fight in the War
- The entire Ukrainian paper industry has come to a standstill, affecting 1.2 million tonnes, although most of this accounts for domestic use and will not affect European supplies
2.4 Product Availability
One of our main concerns for 2022 is product availability. Increased demand and reduced production have led to global paper shortages and forced many manufacturers to allocate stock to customers, effectively limiting the volume of goods on the market.
- The impact of COVID-19 on the paper industry has led to significantly reduced production capacity to meet high demand
- Permanent closures of major facilities, including Stora Enso’s Veitsiluoto paper mill in Finland, will reduce the wood-free paper market volume by 790,000 tonnes per year
- A 112-day strike at Finnish-based papermaker, UPM, further exacerbated availability
- Astronomical shipping costs have led many suppliers to suspended inter-continental deliveries
We have now experienced unavailability across multiple ranges, in particular white card and copier paper. The former range—white card—was the first time we experienced major availability of a product range in the wake of the 2021 disruptions.
Our previous white card supplier, Asia Pulp & Paper, suspended all deliveries from their paper mill in Indonesia to the UK. This decision followed unrelenting supply chain issues, in particular rocketing shipping costs, making delivery to the UK unviable—at the time (December 2021), the cost of shipping a container from Indonesia to the UK had risen by 800% within 18 months, from $2,000 to $18,000.
When sourcing alternative supplies in January 2022, two major European manufacturers, including Europe’s largest uncoated manufacturer, The Navigator Company, were unable to quote as its 2022 production was already fully allocated.
We have successfully transferred our White Card requirements to one of our European-based suppliers, albeit at a higher cost. However, we expect further product shortages in 2022.
2.5 Price Validity
Prolonged price validity periods are now unattainable as the supply chain faces rising energy, transport and raw materials costs. These cost are being passed downstream to GHP, often with minimal notice, and are applicable to goods delivered and invoiced to GHP, potentially affecting hundreds of tonnes of our on-order stock.
Therefore, to remain sustainable, we must pass these costs on as and when we receive them. The absence of any price validity periods also hints at additional price increases in the very near future.
2.6 Domestic Issues
Rising overheads, staffing issues and operating costs are also significantly affecting our business activity.
- Our margins have been squeezed to ensure we can remain competitive in the market
- Our transport division costs have increased, including fuel prices and driver wages
- National Minimum and Living Wage rises in April 2022 will increase our annual wage bill by £90,000
- Packaging costs, including shrink wrap and cartons, are at record levels and continue to rise
