Global Paper Shortage Update
Over the past few months we have been keeping in regular contact with our suppliers with regards to the Global Paper Shortage and it is our responsibility to provide you, our customers, with as much detailed and proactive information as possible.
How will this effect your Sydney business?
We hope that this update helps provide some clarity. I remain personally committed to managing these uncontrollable market circumstances as they arrive.
TITO Tickets
We have very recently been informed by our suppliers that there will also be an upcoming price increase on our Poker Machine TITO Tickets. An update regarding this product will be provided this week.
The critical situation of the manufacturers of leuco dye (= ODB-2) in China remains unchanged.
- 4 of the 5 known manufacturers of leuco dye are located in China and together account for nearly 90% of the world-wide installed production capacity of ODB-2.
- The production of the largest manufacturer was shut down in the middle of September 2017 by order of the Chinese government. However, production has now resumed with effect from the first week of January 2018. How fast and to what extent saleable goods will be available is, however, presently still uncertain.
- The production of another major manufacturer was also shut down in the first half of December 2017 by order of the Chinese government. It is not yet known when the production will restart.
- Also, the two other ODB-2 manufacturers in China are facing the constant risk that their production will be temporarily shut down due to various reasons.
- All manufacturers are having significant difficulties in procuring the chemicals needed for the production of ODB-2. These markets are characterised by undersupply, temporary and long-term shut downs and shortages.
The sufficient supply of leuco dye is presently not guaranteed.
- The world-wide demand for ODB-2 by manufacturers of thermal and carbonless papers is currently hampered by a significant limited supply of ODB-2.
- Since September we have been able to maintain our supply by running down our stocks of ODB-2. However, these stocks are mostly used up now. Therefore, there can be noticeable delays in delivery from now on and for the foreseeable future.
The prices for ODB-2 have exploded.
The prices for ODB-2 started to increase since September, first moderately and then exponentially. As of December, the prices have reached a level which could not have been anticipated and are in fact by a significant multiple higher than before. This leads to extra costs of many millions for each and every manufacturer of thermal paper.
We will support you through the crisis as well as we can.
It is uncertain, how long the present crisis in availability and pricing will last. However, there is one thing that we can promise you, as a strong, reliable and fair partner that we will be firmly on the side of our longstanding and loyal customers. We will try our utmost to support you and to secure your supply with our products. That is how we will tackle this challenging situation together.
