Increased Paper rices Leave Publishers in Dilemma

Increased Paper Prices Leave Publishers in Dilemma

If Ethiopia is proud of anything, it is not the media. For decades, the Ethiopian media landscape has been nothing but a propaganda machine for the incumbent, whoever that may be. However, the media experience has also seen its high points. One was right before the 2005 national election, when tens of thousands of copies were sold in the capital every week. The other moment could be right after the coming to power of Prime Minister Abiy Ahmed (Ph.D.), when the number of publications hit a record high. The latter moment was short lived though. This time, the toughest challenge comes from the price of paper and the migration to digital platforms, threatening livelihoods, writes EBR’s Bamlak Fekadu.

On the second day of April, despite the rush-hour crowd in the Arada district, cornering the church’s compound wall are a few newspaper retailers, spiritual publications, and a few meters across the compound, fresh graduates are seen renting newspapers to search for a job. Paying up to ETB 5 for a few minutes. Lubabo Negash, a father of a son and breadwinner of his household, makes his living from selling newspapers and related products as well as renting out newspapers.

He makes up to ETB 100 and above a day; however, in recent days, business hasn’t been as good as it has been in the past. Lubabo is concerned about the future of his business due to the rising number of people who prefer to read news online rather than buying newspapers. He is considering exploring other business opportunities to supplement his income.

According to what he learned from publishers and distributors, due to the soaring price of paper and other inputs, several private magazines have cut their publishing rates in half, some newspapers have lowered their circulation, and others have switched to digital news media.

“Selling older newspaper publications is profitable because my proximity is closer to the federal first-degree court in the Arada district,” he explained, adding that “older publications, especially those related to high-profile cases, are in high demand among lawyers and law students who use them for research purposes or court cases and could be sold for as much as ETB 300.” The publications covering high profile cases are in high demand by lawyers and researchers who use them as reference materials. He also mentioned that some collectors are willing to pay even higher prices for rare or hard-to-find publications, making it a lucrative business for those who have access to such materials.

This has helped him sustain his business and generate a steady income. “Despite the influence of growing digitization in media outlets and a weak reading culture, the price of a newspaper has doubled from the previous two years’ prices, which were selling for around ETB 10 to ETB 15,” he explained to EBR .

Arada District is regarded as a hub for the printing and packaging services market, which includes firms ranging from century old and larger firms to hundreds of micro, small and medium enterprises, as well as the entire value chain, including retail and distribution of publications. The district, which has hundreds of establishments, hosts the pioneer in the printing business in Ethiopia, Berhan ena Selam, established in 1921 and is one of the first and oldest printing enterprises in Ethiopia. It was once a magazine and newspaper firm. Branna Printing Enterprise, established in 1978, is also a public enterprise in Arada under the Ministry of Defense that provides printing services.

In recent years, the skyrocketing price of printing has cast a dark shadow over the hope of printing companies, causing many newspapers to cease publication, while around eight private and state-owned newspapers and four or five magazines have been able to withstand the price and remain in the market. Others, notably major sports publications, have gone out of business, while others have migrated to digital channels.

The surge in printing expenses has not only raised the cost of domestically published newspapers and magazines, but has also pushed the remaining media to reduce the number of pages and their distribution.

A stakeholder from the sector claimed that the price of the paper they use to print newspapers and magazines is rising unpredictably, posing challenges to their work and possibly driving them out of business. These stakeholders allege that owing to the price adjustment made by the large printing firm Berhan Ena Selam in April last year, some were forced to shift to the digital outlet while others adjusted their selling price.

Due to the growth in the price of paper and the shortage of foreign currency, the price of newspapers has more than doubled since the state-owned Berhan Ena Selam Printing Enterprise increased the printing price by more than 80Pct. Magazines and newspapers are being challenged to carry out work amidst the increase in the price of printing, while some struggled to find advertisers due to the reports and contents they present.

For instance, Addis Maleda, a weekly newspaper, and Kumneger Magazine are among those who halted publication. This is because the cost of printing is spread across a smaller number of publications, resulting in a higher cost per unit. Likewise, the reduction in volume may lead to a decrease in revenue, further increasing the printing cost per unit.The “state-owned” Ethiopian Press enterprise, which publishes newspapers in six different national and foreign languages, including Amharic, claimed that there has been an 80–100Pct increase in the cost of publication since last April.

The publishing cost of a newspaper with 40 pages was ETB 18 and 28 cents per unit, but after the escalation adjustment, the printing price is now ETB 28 and 28 cents. The Reporter, which has been publishing bilingual newspapers for the past 26 years, has raised its price to ETB 20 from ETB 7.5 four years ago. Capital, a weekly English newspaper that has been in operation for 24 years, and Fortune, are now priced at ETB 200, up from ETB 6.5 four years ago.

The century-old Berhan Ena Selam Printing Enterprise attributed its price hike to the global market’s 100Pct increase in paper prices. During the previous fiscal year, the company was able to import goods duty-free due to an appeal filed with the government over the cost of newspaper paper.

It is recalled that the company previously referred to the double tax on paper as justification for pricing increases for its publishing clients. Tewodros Kassa, the editor of Habesha Wog, asserted that the levy placed on media production has its impacts. Despite growing input prices, he noted the 15Pct tax levied when the magazine was printed and the 15Pct tax levied when it was made available for purchase.,

The number of magazine readers has decreased from 8 or 9 thousand to 3 or 2 thousand, as an illustration of how it is driving the generation to quit reading. Newsprint is pulp, a fibrous material obtained by either chemically dissolving wood chips or crushing wood in a grinder, which is the base material for paper. Newsprint is cheaper globally and retains the coarse lignin that other products bleach out, giving it the distinctive look and feel of a newspaper.

The UK based Denmaur Independent Papers Limited, a stockist paper and board merchant, regarded the surge in the price of paper as the impact of the COVID-19 pandemic, which has disrupted every business sector, accelerating demand in some industries and halting others. As a result, demand was flat in 2020 before rising 12.7 million tons in 2021, and the market is still on pace or even slightly behind its long-term trend.

The COVID-19 pandemic has caused a shortage of paper stock, which is causing an adjustment in paper prices. The entire paper mill industry, including manufacturers, wholesalers, printers, and marketing companies, are experiencing difficulties securing the necessary amounts of materials and goods. Industry experts say there has never been a paper shortage of this size in the past. Global supply chain issues continue to have a major impact on paper product availability.

A few hundred meters to the south of Menelik Square, there is another square named after a patriot, Archbishop Abune Petros’s statue, who supported the national patriots against the fascist Italian invaders. The 9.3-ton statue was erected over the light rail’s tunnel beside the School of Journalism at Addis Ababa University.

A printing business specialty market mall is located adjacent to the square. The mall offers a wide range of printing services, including digital and offset printing, binding, and laminating. It is a convenient one-stop-shop for all your printing needs. There are about two dozen firms in the mall. The price of paper has more than doubled in a year in the local market, creating apprehension among the publishers about whether they will be able to proceed with publishing.

Aynalem Zewdie owns a printing and advertising PLC called H3A, inside the mall. Her business offers a wide range of services, from printing invoices and receipt pads, to banners, t-shirts, and books. The rise in paper prices has hampered her company’s operations, and she is now finding it difficult to maintain her operations and remain competitive. Her business relies on government office auctions, the same also goes to other businesses inside the building. “We are in a hot water due to the soaring prices,” she said. ‘Usually, the last nine months of the current fiscal year are the peak season for the publishing sector.

Despite that, this year, we don’t have much work because of the spiraling paper prices and related products. Our business has been severely hampered by the new market trend that introduces quick price adjustments every three days.” she told EBR As a result of the new trend, Aynalem and her colleagues are losing confidence in participating in auctions where award notifications from auction offices take longer than expected.

This delay could lead to the price of the paper doubling, making the auction unsuccessful. Consequently, their advance guarantee, equivalent to 10Pct of the total value, will be taken by the offices following the failure to deliver. “In the event of unforeseen circumstance, such as a sudden increase in paper prices, auction organizers should consider alternative escalation approaches or negotiate to waive the advance guarantee.”

Price ranges on various paper types have increased from 50Pct to 100Pct and beyond; “For example, a 150-gram art paper was sold for about ETB 2,800 about a year ago, but now with the 100Pct increment, it is sold for ETB 6,000,” she told EBR .

The consumption of paper and paper products is growing faster in developing countries like Ethiopia due to the expansion of education and the rapid increase in disposable income. However, the country has not matched that appetite with sufficient local production to meet the mounting demand.

There are six companies currently engaged in the production of rolls of paper sheets from pulp and recycled paper. Although a small number of companies operate in the paper conversion sector, there is no paper mill company in the country.

According to Statista’s, Ethiopia. Importer paper and paperboard worth approximate USD 129 million in 2021. This was a decline as compared to 2018, when over USD 140 million worth of product was imported. Zelalem Birru, an importer and distributor of paper and pulps, who also runs printing services, saw prices reach record highs due to supply-side challenges, including on the forex side. The cost of ink, paper, and plates has risen. For example, the price of a plate (page) increased from ETB 200 to ETB 460 in a year, while the price of ink increased from ETB 800 to ETB 2,200.

“The rising price is actually related to the forex crunch and makes getting a letter of credit difficult.” Said Zelalem, adding, “The nation’s trading culture, on the other hand, has strongly embraced hoarding in the hopes of generating additional profit. The printing, paper, and pulp production industries are important for government initiatives, but their emphasis is unappealing to investors.” He told EBR According to Tamiru Lemi’s research on Ethiopia’s forestry development, Ethiopia earned USD 606,023.5 by exporting 688.97 tons of paper and paper products to different countries between 1997 and 2016. 79.4Pct of these products were exported to Djibouti, while 20.6Pct were exported to other countries. 68Pct of the total income was generated in Djibouti, and 32pct. Came from other countries.

The recently amended investment incentive regulation has neglected education and training and health services such as hospitals and diagnostic and clinical services. These sectors are not included in either regulation’s tax holiday privilege.

It appears that the government is doing nothing to boost domestic paper and pulp production. However, the government’s efforts must be significantly increased in light of the nation’s quickly increasing demand. Failure to do so may result in an overreliance on imported paper products, which could pose negative economic and environmental consequences.

11th Year • May 2023 • No. 117 EBR

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