Smurfit to Raise Price Again After Mondi, SCA Copy Prior Move

Smurfit Kappa Group Plc (SKG), Europe’s largest containerboard maker, plans to raise the price of its cardboard packaging in Europe for a second time after rivals followed its previous 25 percent increase almost a month ago.

Smurfit Kappa will increase the price of its brown recycled containerboard by a further 60 euros ($88) a ton from Oct. 1, Dublin-based company spokesman Bertrand Paulet said today.

The Irish cardboard box maker this month applied Europe’s first containerboard price increase since the global recession began by raising prices by 60 euros a ton, leading a market where producers have struggled to charge enough to overcome rising costs. The move prompted peers, including Svenska Cellulosa AB (SCAA), or SCA, and Mondi Group (MNDI), the next two biggest suppliers in the region, to announce increases of their own.

A 40 percent drop from a peak in October 2007 left prices at “unsustainable” levels and as much as 80 percent of containerboard was being sold at a loss, Smurfit said when announcing its first increase on Aug. 12. Analysts said at the time that the success of the move, made in response to rising costs for raw materials such as waste cardboard, would depend on whether rivals followed suit.

Containerboard refers to the grades of paper used to produce corrugated sheets that make up cardboard boxes. The recycled grade, also known as testliner, was selling at 275 euros a ton in the four months through July, according to Goodbody Stockbrokers in Dublin.

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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