For quite some time now we have been witnessing a special market situation, with significant supply chain dysfunctions and high price volatility, with sudden and repeated escalations.
In recent months we have been facing major increases in energy costs, especially for gas and electricity. Not only the levels, but also the frequency of these increases are unprecedented and can no longer be predicted.
In addition to raw materials, energy costs are the second most important factor in calculating the cost of producing envelopes. The share of energy costs in production costs has recently doubled, in addition to rising raw material costs. Overall, energy costs have tripled this year for paper producers. Due to the size of these increases, we are currently in a position to pass on these costs to end customers.
Therefore, starting from the increase in prices for paper and other raw materials on all ranges, announced by all our suppliers from factories in Central and Eastern Europe, starting with November 1, 2021 we have to adjust the way of managing prices, reserving We have the right to change any quotation without prior notice. In addition, we will only be able to confirm the validity of new prices for a maximum of 1 to 2 weeks, reflecting the volatility of current market conditions. The offers will continue to be firm, but will have a short validity, adapted to the concrete market conditions.
Also, despite all the ongoing efforts to avoid any malfunctions, it is possible that in the next period we will face delays in the delivery of some goods, due to external GPV causes in the supply chains.
We are fully aware that this is a new price increase that follows shortly after the previous one and that it is not to our advantage or that of the customer. On the other hand, we are aware that the cost changes mentioned above can develop in any direction, both up and down, and we will take these developments into account in our future price discussions. Our sales team will be proactively involved in the next period to discuss all the details with you.
As market conditions balance, we will look at the practical possibilities of returning to the way we have worked in recent years.