Manufacturer wants to reset up to 14%

Brazilian manufacturers of cardboard to readjust the price list in up to 14% from October 1, according to sources heard by the value. Demand relatively warm and above all the pressure of raw material costs and labor would justify the correction of current values.
Fourth largest national producer, the Papyruses already announced increases of 12.5% to 14% for their products, in an attempt to recompose banks pressed by high costs, said the President, Antonio Claudio Salce.
Klabin and Suzano Papel e Celulose, the two largest manufacturers of this sector in the country, are assessing the application of adjustments, according to industry sources. Sought, they reported, which does not comment on market values. Ibema, third in the ranking of card stock, also reportedly announced increase of up to 14%. Sought, the company informed, through the press, that the scenario is not yet amenable to adjustments and that there was no announcement.
For Papirus, there is room for correction in prices and this movement is "necessary". As Salce, 14% are formed by a high-residue costs that should have been fully passed on since the end of 2012 as the impact of collective bargaining. This percentage has not yet been closed. "There is a residue of the attempt to reset the start of the year, the increased costs of the first half and the bargaining," he said. "There's no way to not pass".
In his assessment, although the domestic market is not "magnificent", sales are within the expected. In the second half, there is acceleration of orders because of the holidays and July and August have already shown this movement. "What moves the sector are consumer products and the demand is normal," he says.
Last year, sold Papyrus 73 thousand tons of cardboard and earned revenues of $ 220 million. For 2013, the forecast is to reach 76.5 thousand tons, with gross revenues of $ 255 million. The improvement of performance, as the commercial Director, loving Varella, will be possible thanks to a focus on more sophisticated markets and to advance on the market of smaller competitors who face economic hardship.
The direction of Papirus acknowledges that their profitability is currently short of the coveted. The desire is to achieve an Ebitda margin (earnings before interest, taxes, depreciation and amortization) of 25% and, with the increase of up to 14%, this bookmark you can "be about the 20%". "We need to reset margins," says Salce.
The company still sees need for emergence of a third big industry competitor, with the muscle to compete on equal terms with Klabin and Suzano, who lead the national market with cards off. In 2010, Papyruses and they sign a Ibema letter of intent to merge their assets, which would give rise to a new company, with annual sales of $ 500 million. The plans, however, did not sell well.
"The sector needs a third strong competitor. Sooner or later, it will be necessary to rethink that, "says the President of Papirus. "The plans didn't work out for the two companies. But [a merger] is always on the radar. " But it says that there is no ongoing conversation.
In 2012, according to Bracelpa, industry entity, domestic sales of card stock amounted to 530 million tons, with a high of 3.5 percent. Imports advanced 12.8%, to 44 thousand tons.