United Stationers
February 21, 2008
Page 2
February 21, 2008
Mr. Mike Barsch
United Stationers
One Parkway North
Deerfield, IL 60015
Dear Mike:
As a valued customer of MeadWestvaco, one of our goals is to keep you informed of changing market conditions that affect the price of converted envelopes that MeadWestvaco supplies.
Over the past 8 months, we have seen significant increases in raw material, energy and transportation costs. Key components such as paper (we have received another mill increase effective March 1, 2008), packaging, adhesives and window film have seen increases. In addition, elevated petroleum prices that impact fuel and freight contribute to our escalating costs.
In the face of rising costs, we have worked hard to offset these conditions through cost cutting actions and productivity efforts, to include lean manufacturing and supply chain improvements. Although we have implemented aggressive cost reduction programs to mitigate these costs, recent industry wide increases in the cost of paper, adhesives, window film, and fuel have made it necessary for us to recover these costs.
We continue to negotiate aggressively with our suppliers and to explore all options to minimize the cost impact. However, the magnitude of the increases we have experienced are well beyond what we can continue to absorb or recover through productivity. Therefore, we must initiate a price increase on certain segments of our business that cannot absorb the inflating costs.
Effective July 1st, 2008, we are announcing the following average price increases effective for all of our distribution:
Columbian® brand and Private brand envelopes - 5.0% average increase
This increase has been accepted through all Office Products Channel customers.
We value your support and look forward to working with you to identify and implement strategies to continue to grow your business.
Please call me if you have any questions or require further discussion.
Sincerely,
William J. Cardone
Vice President, Commercial Sales
WJC:pdb