Paper prices rise, campus to bear costs

The cost for some 30 million sheets of paper used each year by Cal State Long Beach colleges and departments went up Wednesday for the first time in four years.

A memorandum announcing the price change was distributed in October by CSULB Property Manager Bob Escalante.

"Anything from a letter to a memo to a Post-It costs more than it did a year ago," said Charles Hughes, director of Procurement and Support Services.

The price increase is a result of cost hikes by the university's suppliers, which ranged from 39 to 98 percent, according to the memorandum.

Regular copy paper, for example, has gone up from $3.04 to $4.66 a ream, Hughes said. Costs for reams of legal-size sheets bore the most dramatic increases due to an exceptional rise in demand, he said.

Campus stores contract annually with suppliers to achieve volume prices.

"We try to lock down low prices and not lock ourselves in to higher prices," Hughes said.

State contracts negotiated in advance can be bought into as well, he said.

"We haven't raised any prices," said Jeri Gatto, manager of the Library Copy Center and Satellite Program. The Forty Niner Shops Inc. procure their paper independently of the university, she said. Gatto acknowledged that costs are rising, however. "What will happen in spring I do not know," she said. "It's really an unstable market."

Even though students won't be paying more for copies yet, the increased paper prices for the university are likely to have longterm effects, Hughes said.

Joe Latter, associate vice president of Financial Management, acknowledged that students may eventually pay in the form of higher course fees.

"As paper prices rise, there may be some minor price increases in the next year," he said. "Departments will have less money for other things. They may have to cut back on some things."

Departments might have to cut down on paper use, Hughes said. In some cases, departments could go "paperless," utilizing electronic methods of communication and testing.

Latter said that the purchasing department already uses electronic on-line requisitions instead of paper.

The cost of recycled paper, meanwhile, is coming down - so much so, that it is becoming a cost-effective alternative to freshlymilled paper in some cases, Hughes said.

"We try to buy recycled where we can," he said. "Cost is a driving factor."

For 18 months the cost of paper has been increasing due to several market factors.

During the recession of the early 1990s, many paper mills reduced capacity or shut down altogether due to drops in demand, according to a paper by Paul Hickey of Willamette Industries Inc.

Hickey, who wrote "The Paper Market: How We Got Here and Where We Are Going" in January, is head of Willamette Industries, a South Carolina-based paper mill.

Since early 1994, however, the domestic economy has rebounded while demand for paper has skyrocketed in Europe and the Far East, he said. The scaled-down mills have not been able to meet demand.

Another factor in the rising cost of paper is the increased cost of wood pulp, from which paper is made, Hickey wrote. He said this has had a direct effect on the bottom line.

A trend toward higher grades of paper by individual mills has compounded the difficulties in meeting demand, Hickey said.

In June 1994, the Simpson Paper Co., for example, stopped producing free sheets, the industry term for standard copy and form paper, to focus on more profitable specialty grades and coated papers, he said.

The future of paper prices remains uncertain as these factors continue to affect prices.

Meanwhile, Charles Hughes will begin taking bids next month to determine CSULB's prime paper vendors.