Converter Outlook, Part 2 (CONT’D FROM PAGE 28)
Board Converting NEWS INTERNET DIRECTORY
VOLK PACKAGING CORPORATION Biddeford, Maine: Derek Volk reports, “It is beginning to feel like I start my outlook for the next year with the same phrase every time: It was a crazy year!
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Derek Volk
had to overcome the hurdles of record long lead times and rapidly rising costs of everything from labor to pallets to strapping. Even our company cookouts got a lot more expensive! “As we head into 2023, I have been using the same word every time someone asks me to describe my out- look. That word is murky. “The past year has been insane. The first half of the year we had lead times that reached 16 weeks. In June, when the American consumer finally saw the inflation that we had been seeing for a year prior, the economy hit a brick wall. Customers who had been buying based on 16- week lead times saw their sales crumble drastically. “The 16 weeks of inventory they had on their floor sud- denly became 24 weeks of inventory. So, with a drop back to normal lead-times, sales for most of us in the box busi- ness slowed down quickly. “We were not losing customers, so there was no need to panic. I felt it was an “inventory adjustment” and things would pick up again once our customers depleted their stockpiles of inventory. Thank goodness, I was right. “By mid-fall we were normalizing, and sales even picked up. We are still not back to where we were immedi- ately post-pandemic, but we are well above pre-pandemic levels and, in 2022, we finished our 14th consecutive year of sales growth. “As we begin 2023, I am optimistic but still feeling like the outlook is murky. They like to say that we are not in a recession, even though the U.S. economy met the tradi- tional definition of two consecutive quarters of falling GDP. “The Fed seems to raise interest rates at every oppor- tunity. It seems inflation has somewhat stabilized but re- mains much higher than anyone wants or can afford. The average American is now paying almost $500 per month more than they were just a year ago, making it obvious- ly difficult for people to make ends meet, much less buy many of the products that go in our boxes. “When you are forced to spend $3.50 for gas, $5.00 or more for home heating oil, and 50 percent more for gro- ceries than you did a couple of years ago, it is impossible to purchase toys and other non-essential items that many of our customers make.
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January 16, 2023
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