UK braces itself for rise in energy costs
12 October 2005
The UK packaging industry is bracing itself for one of the hardest years ever following the announcement last month of all-time high oil prices and a 60 per cent rise in the cost of electri-city across the board.
Paper mills, traditionally huge energy consumers, will be the hardest hit by the increases, as they already face so much competition from continental Europe, where energy prices are significantly lower and the general present demand for paper is deemed universally flat.
This is reflected in last month’s announcement by SCA that it is reducing its linerboard capacity by 350kt, with the subsequent rationalisation of converting plants and the loss of 2,000 jobs. Huhtamaki also announced closures and job losses at its UK operation in Skelmersdale, while the paper and packa-ging team at the merchant bank UBS is predicting that Smurfit/Kappa will need to shut 600-800kt as a direct consequence of a current oversupply of 1-1.5 million tonnes.
Source - Packaging News
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