Australian Paper to claw back envelope volumes

Following the failure of Australian Envelopes in 2011, the printing industry has doubled its consumption of imported envelopes despite a revival of local manufacturing.

When the primary envelope producer went broke, Australian Paper picked up some of its manufacturing equipment and reconstituted the business. In the years since then it has fought to win back market share after a dramatic increase in imported envelopes.

According to a report in industry bible, Pulp & Paper Edge, the surge in imports went from an average in 2011 of 156.7 million per quarter to a peak of 476.6 million tonnes the same year. Since then Australian Paper has brought the imports back to a new average of 350.5 million per quarter with the trend heading south. In the first quarter this year Australia imported 340.2 million envelopes with 39% coming from New Zealand.

However, the strength of the Kiwi dollar against the Aussie has eaten away at New Zealand’s share of the pie with imports from Thailand, Malaysia and Singapore all increasing. Even so, the overall price of imported envelopes to Australia continues to increase as the Aussie weakens against the US dollar. This has led to a 9% drop in imports this year so far. With no sign of the local currency staging recovery, printers can expect the cost of envelopes to continue to rise even a demand continues to slump.

Pulp & Paper Edge poses the question whether the local manufacturer, Australian Paper, has suffered a similar contraction or if the weakening dollar is giving it a larger share of the shrinking envelope market.