09 Mar 2022 Raw Material Shortages: What Is Happening?
The Problem
The Finnish Paperworkers’ Union “Paperiliitto” has called a strike involving the plants of Scandinavian company UPM, a company which alone covers 40% of international paper requirements, in particular that destined for the production of self-adhesive labels. The strike, which commenced on the 1st of January and has been extended multiple times, will run until 14 May 2022, unless otherwise notified.
The strike has interrupted the production of paper destined for the manufacturing of self-adhesive labels for over three months now, naturally creating issues in the procurement of labels, which without printable material means it is not possible to meet agreements made with customers. UPM has stated that export of paper material is subject to quotas, and that deliveries are scheduled over a period of months.
The prolonged strike and consequent difficulties for label manufacturers in obtaining self-adhesive material adds to an already problematic situation which began during the course of 2021, when we saw inexorable increases in the prices of raw materials due to scarcity of materials, and sharp increases in energy prices.
The Effects
The extended strike is having serious repercussions on a wide range of parties: the first to be affected are label manufacturers, who have been forced to stop production due to lack of printable material; as a consequence, all supply chains are affected, as without labels they cannot place products on the market – of particular concern are the pharma and food sectors, manufacturers of essential primary goods, and last but not least, consumers themselves, who find numerous products are not available on the shelves.
What We Are Doing
A rapid agreement between UPM and the union is enormously important in order to return to normal production activities, an operation which will nevertheless take time.
Eurolabel is promoting and participating in numerous initiatives to raise awareness, including the letter signed with the Rete d’Impresa 4.6 network of companies, composed of Gruppo ARO SpA, Notarianni srl, Pilot Italia and soon also Cograf – and communications via the GIPEA association.
Below is a series of articles on the subject:
Intergrad.eu – Intergraf calls on UPM to quickly settle strike
Rete d’Impresa 4.6 – Letter to UPM Kymmene
PRINTWEEK.COM – UPM strike extended for fifth time
UPM.COM – Intense negotiations between UPM and Paperworkers’ Union
FINAT: European Label Associations call for parties to resolve dispute at UPM paper mills
CONVERTER.IT – Settore etichette e sciopero UPM: la rete d’impresa 4.6 lancia l’allarme (labels sector and UPM strike: rete d’impresa 4.6 raises the alarm)
ASSOGRAFICI.IT – Shock energetico e mancanza materia prima (energy shock and lack of raw materials)
FINAT.com – Appeal to the EU Commission to address a supply chain collapse
L’allarme GIPEA: a rischio la stabilità delle catene di fornitura in tutte le filiere per mancanza di etichette (alarm from GIPEA: stability of supply chains at risk in all segments due to lack of labels)
ASSOGRAFICI.IT – Shortage of paper causes chaos among printers and their customers
UPM.COM – Negotiations between UPM and Paperworkers’ Union interrupted
UPM.COM – Paperworkers’ Union announces extension to the strike