Interviewer:
Mr. Engineer, the last time we had the honor of meeting you was at the Turkey exhibition. Since then, various incidents and circumstances have taken place in our country, which naturally have affected the paper industry as well. We would like to know what strategies your company has adopted in terms of raw material supply and paper sales under these unstable conditions, and how you are currently operating.
Mr.Ghafourzadeh:
Greetings and respect to you and your esteemed audience.
As you are aware, in recent months unfortunate events have occurred that have put the country’s industry under severe pressure. Several simultaneous imbalances have directly affected the paper sector: energy shortages, water scarcity, and increasingly strict environmental regulations. Unlike in previous years, there is no longer any leniency from the Environmental Protection Organization, and even board and carton producers are now feeling the impact of environmental oversight very directly.
On the other hand, as you know, the price and supply of “wastepaper” as the main raw material play a decisive role in determining the final price of paper. Unfortunately, the price of wastepaper has once again surged to its peak levels, while shortages are evident both inside the country and abroad. Neighboring countries are also developing their own paper industries. For example, in Iraq, three paper mills have recently been launched and gone into operation. Moreover, a resolution has been passed in Iraq banning the export of wastepaper from southern Iraq starting in 2026, which will add further strain to raw material supply.
In addition, the long queues for foreign currency allocation to import wastepaper have exacerbated the challenges for paper manufacturers. Many companies have been waiting for more than 200 days to receive allocations, yet despite numerous meetings with government officials and the private sector, no tangible results have been achieved.
Under such circumstances, paper producers, in addition to facing problems with electricity, water, environmental restrictions, and spare parts, are now dealing with a serious crisis in sourcing raw materials. Unfortunately, some carton and board producers assume that the first step paper manufacturers take is to raise prices. In reality, price increases are the very last resort for us. We understand the current economic recession in the country and do our utmost to prevent worsening it.
A rise in paper prices would undoubtedly deepen the cash flow challenges faced by carton and board makers, as credit sales with three- to four-month payment terms are the industry norm. A producer who sold goods three months ago at 30 or 32 thousand tomans must now replace that same paper at over 40 thousand tomans, creating severe financial strain.
The paper industry considers it its responsibility to support downstream sectors such as carton and board production, since they are directly dependent on the parent industry. However, the reality is that the relentless rise in the price of wastepaper – which has even outpaced gold – has been the primary driver of paper price increases. This dual pressure, both domestically and internationally, poses a serious challenge for our industry moving forward.
Interviewer:
We thank you for your comprehensive and enlightening explanations.