The existence of the Ukrainian paper book is under threat January 24, 2022, 1:33 pm

January 20, 2022, an extended meeting of the Board of the Public Association "Ukrainian Association of Publishers and Booksellers" was held on the catastrophic situation in the domestic paper market.

Eduard Litvak, Executive Director of the UkrPapir Association, a paper producer represented by the Commercial Director of the Zmiiv Paper Mill, and leaders of the most powerful paper-importing companies, such as Madis LLC and InterpapA LLC, were invited to take part in the meeting. , LLC "Servisoptorg", LLC "United Forest", as well as the heads of the largest printing companies in Ukraine, namely: book factories "Unisoft", "Factor", "Globe", "PET", "Print".

All participants, without exception, stated a really catastrophic situation with offset paper for printing books on the Ukrainian market, which threatens to actually stop the life of the book publishing industry. We are also talking about the implementation of the state order for the production of textbooks for students of 5th and 9th grades ZSSO and literature for school libraries.

The tragedy of the situation is that today there is a very limited list of actions to solve it, as the Ukrainian book business has become hostage to a global problem - the shortage of paper as such and, consequently, the rapid growth of its value, which makes the price of paper books ", At least for the Ukrainian consumer.

The movement to this critical limit did not begin today. Its significant manifestations were already visible in 2020. The reasons for this phenomenon are as follows:

- rapid reduction of world production of pulp from wood, which is the main raw material for paper production;

- re-profiling of a significant part of paper production facilities, including Scandinavian ones, from the production of offset and coated paper of various brands and formats to the production of packaging paper and cardboard, which is more profitable and less complex and expensive to produce. This re-profiling was caused by the transition of advanced countries from polymer packaging films to organic materials;

- rapid growth of demand for organic craft packaging materials in the context of the coronavirus pandemic;

- significant increase in the cost of transporting pulp and paper from Asia (China, South Korea, Indonesia) and Latin America (Brazil). Currently, the cost of container delivery by sea of one ton of paper has reached almost the cost of the product itself, and delivery time is 3-4 months from the date of order;

- Paper producers and importers started working only on condition of prepayment by the customer, which requires the customer to have very significant amounts of money, which actually disappear from circulation for several months, limiting the financial and organizational maneuvers of the book manufacturer.

To all these troubles was added the long strike of Finnish papermakers, which hurt the supply of offset paper in the European market. What about Ukraine with its needs against the background of this global paper problem?

In 2019, the domestic publishing house consumed 79,000 tons of offset paper. And in 2020, the year when publishers sharply reduced the production of books, this figure dropped to 52 thousand tons. In 2021, according to preliminary estimates, the consumption of printing paper was about 40 thousand tons. And this is taking into account the fact that in 2021, according to forecast data, Ukrainian publishing houses published only about 27 million copies of books against 41.9 million in 2020.

Given the high demand at the end of 2021 due to the large number of people willing to buy books for a "thousand" thousand, publishers have significantly "exposed" their stocks of books and, accordingly, will need significant volumes of paper this year to update the range and increase circulation.

It should be noted that only under the program of the Ministry of Education and Science of Ukraine in 2022 should be published about 17.5 million copies of textbooks for students of secondary schools and works by Ukrainian authors for school libraries. That is, objectively estimating the needs of the Ukrainian book market in offset paper of various brands, it is possible to forecast them in the amount of at least 60 thousand tons.

And what do we have today?

Zmiiv and Korostyshiv paper factories can produce 5,000 tons of offset paper a year, under the best conditions. All other needs were met by imports from the Russian Federation (about 30% of total imports), Europe, Asia and Latin America.

Given the global paper problem, what can Ukraine expect in 2022?

From April 1, 2021, an embargo was imposed on the supply of offset paper from the Russian Federation, which was extended to 2022 on December 21, 2021. That is, we cannot count on Russian-made paper. Given the situation in their own countries, European producers have allocated such quotas to Ukraine that will allow, according to preliminary estimates, to import only about 20,000 tons of offset paper to our country.

Moreover, due to the shortage of paper and the rapid growth of its value, potential suppliers do not specify either the specific delivery time or the final price of the paper.

Thus, with the needs of 60 thousand tons of paper, Ukraine will be able to receive only 25 thousand tons in 2022. It seems to us that the issue of paper as a strategic raw material should be the subject of serious consideration at the governmental level, as market participants alone can not overcome this problem. There is also no certainty that proposals for interim measures to:

a) exemption of domestic paper producers from VAT;

b) exemption of importers from import VAT on imported offset and coated paper;

c) granting soft loans to importers and publishers to prepay for the supply of paper; will significantly increase the supply of paper to Ukraine, however, at least they will allow to reduce the price of the book, which will still be able to publish domestic publishers.

That is, the issue of providing Ukraine with offset paper remains an equation with complete unknowns, which we will still have to solve.

President of the Ukrainian Association of Publishers and Booksellers Alexander Afonin

Based on site materials: http://upba.org.ua

 

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