Demand growth confirms crisis bounce back is well underway

The demand has grown more than 15% in the first four months and there is an increase in every segment in all markets. We think that this is genuine growth and that the effects of the crisis are now well behind us. The growth is strong in Asia as always and also in the Russian market.

Record pulp increases pressure us to increase prices

The numbers need not be repeated here, they are well known in the industry but to those who have doubts about the increases we can comment that the paper industry is always lagging behind in transferring the pulp increases to the end user. This would be fine if the industry had high margins and a large value added component from where to buffer the effects, unfortunately this is not the case. We make product from a natural raw material that is subject to the market volatility typical to raw materials.

Thermal paper is natural, sustainable and eco-friendly

The many arguments in favor of using thermal paper are often overlooked in the thinking behind what constitutes sustainable solutions to economic life on earth. The printing engines do not use ink when thermal paper is used and when long life grades like our FZ or KJ-R are used then there is no need for plain paper copies for accounting or proof of purchase purposes.  In many developing parts of the world the mobile phone is emerging as a payment engine and there is said to be a hundred million users in Asia and in Africa. The move to paperless payment transactions is not really a trend in the developed world and growth is very slow. In our home market Finland we have been able to pay for transport tickets via the phone but otherwise there is not much happening.  We believe that the move to SEPA, the increased use of bank cards in daily life will grow the need for proof of purchase. Another demand driver is the return of the boarding pass and it is much more efficient to print the card from a kiosk or service counter at the airport than using a whole sheet of A4 plus ink at the office or home.

Jujo Thermal is investing

We are rebuilding various finishing units to eliminate bottle necks and we are also investing in people by way if conducting an intense productivity improvement project called Jujo+. We hope that these efforts will bring more product to the market. In June we take a medium size repair break to clean and service the hardware and then we look forward to a good second half 2010 with supply and demand in balance and profitable operations again after the difficult first half of the year.

Peter Hutton

President & CEO