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Market Update: Direct Thermal Label Shortage

Market Update: Direct Thermal Label ShortageJanuary 5, 2018

Dear Valued Honeywell Customer,

Because you are a valued partner of Honeywell, we wanted to provide you with awareness regarding the recent challenges faced in the global thermal paper market. These changes, volatile in nature, have affected supply, demand and overall pricing.

The shortage of leuco dye has forced several thermal paper mills across the globe to either shut down or allocate their current output. Appvion, the largest thermal paper mills in the USA, is also currently affected by this shortage and is shut down. Several other key thermal paper mills in the USA, Korea, Japan, China, and Germany have also been impacted by this severe shortage. Price increases have also occurred during 2017 for the components to produce adhesives that are used in other paper and film products and in transportation costs.

Despite these conditions, Honeywell continues to focus on delivering premium quality products at competitive prices. We are also continuing our focus on operational excellence and streamlining our processes to remove costs and remain competitive. However, the magnitude of the current dye shortage and the consequent disruptions to the paper mills have adversely impacted our costs, leaving us with no option but to pass on a price increase up to 3% on products effective with shipments beginning February 1st, 2018 (does not include Ribbons). A new catalog will be released early January reflecting the new prices, as well as other user-friendly enhancements.

Your Sales Representative is available to answer any questions and will provide specific pricing information for each of the products you purchase. In the meantime, Honeywell will continue to work to minimize the effect of raw material increases and identify areas within our business where costs can be eliminated. We are challenging ourselves and our suppliers to drive out costs and continue to deliver high-quality products to you, our valued customer. We appreciate your continued support, and we thank you for your business.

Yours sincerely,

Robert Hayston
General Manager of Media

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