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Nippon Paper to raise printing paper prices

Press release from the issuing company

 Moscow. Aug 26, 2008 . Nippon Paper Group Inc. plans to implement an additional price hike for printing paper, possibly by the end of this year, due to soaring fuel and material prices, Jiji Press reported.

Prices are expected to be raised by 10-15%, the sources said. Nippon Paper raised its paper product prices by 15% in June, but it concluded that an additional price hike is inevitable as steeper-than-expected increase in crude oil prices is eroding the company's profitability.

The company's earnings estimates for the current business year to March 2009 are based on the assumption that Dubai crude oil prices will move at an average of 88 dollars per barrel. Despite recent price falls, the average price for the year is expected to reach $100-110.

Highflying prices for recycled paper, used to make printing paper, are giving an additional blow to the company's earnings.

Meanwhile, Nippon Paper plans to keep intact prices for household paper products, such as tissue and toilet paper, as it hopes to ensure first that a 25% price hike implemented in June will be fully reflected in retail prices.