HomePoliticsNewsprint price up 50%

Newsprint price up 50%

THE cost of newspaper publishing has gone up sharply following a 50% increase in the price of newsprint by the country’s sole suppliers, Mutare Board & Paper Mills (MB&PM), this week.

Arial, Helvetica, sans-serif”>The latest increase on Monday raised the landed price of newsprint to $37,2 million a tonne including VAT and transport, from $26,3 million.

This effectively raises the cost of printing a copy of a newspaper, the Zimbabwe Independent for instance, to $23 000 excluding VAT, mark-up and distribution, said Zimind Publishers group chief executive, Raphael Khumalo.

He said the newsprint and printing costs now constitute 50% of the group’s total production costs.

Khumalo said the group’s newsprint consumption per week would cost $685 million or $3 billion a month. Printing costs, he added, would be about $2 billion a month.

“For us to survive the paper should be selling for at least $40 000 including VAT per copy,” said Khumalo.

“The problem has been compounded by the surcharge imposed on distribution costs by our agents who have to source fuel at prices between $30 000 and $40 000 per litre,” he said.

Richard Zirobwa, chief executive of Art Corporation which owns MB&PM, said the movement in the exchange rate had a significant impact on the newsprint pricing structure since the company imports most of its inputs.

The foreign currency rate at the auction market moved from $9 896 to the United States dollar in June to $17 701, a devaluation of 80%. The exchange rate this month moved again to $24 108 to the US dollar, which means on the import side, the exchange rate movement resulted in a 144% devaluation over a two-month period, according to Zirobwa.

“We import most our raw materials. We absorb what we can and what we cannot we try to mitigate through price adjustments,” he said. – Staff Writer.

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