During the second session of the first day, Gundula Ullah, Chief Procurement & Sustainability Officer of the Funke Mediengruppe, Germany, and Shyam Shanker, Director – Business & Commercial at Bennett, Coleman and Co. Ltd. (Times Group), India, discussed “Sustainable Procurement for Newspaper Production”, with Thomas Isaksen, Managing Director of Den Danske Presses Faellesindkøbs-Forening, acting as moderator.

“It’s a difficult time for production of newspapers, a difficult time for transportation
and it’s a very difficult time to get the right sourcing into our business,
so procurement is a key issue.”
(T. Isaksen)

In fact, the issue of procurement is one of the biggest issues facing newspapers. First, the Covid pandemic caused enormous challenges to the supply chains, directly followed by Russia’s invasion of Ukraine. In this session, two procurement executives told their stories:

First Gundula Ullah presented the “Sustainable Procurement for Newspaper Production” of Funke Mediengruppe (“a house of stories”, in her own words). For Funke, sustainability needs to be one thing: “Credible”.

Funke’s sustainability move and strategy includes:

• A selection of 17 UN Sustainable Development Goals
• The upcoming EU Supply Chain Act
• Compliance of the German “Lieferkettensorgfaltspflichtengesetz” (a description of this law in English can be found here)
• Reduction of carbon-dioxide (CO₂) output and energy consumption

Funke has derived six sustainability targets in line with the UN’s SDG, which best fit with its business model, and can be included in their marketing and sales activities:

Based on that, the company has come up with four sustainability goals that also impact the operation of the procurement function:

• Achieving CO₂ neutrality for the media houses by 2035
• CO₂ neutral value chain of products – “from the tree to the mailbox”
• Strengthening our social commitment as well as diversity and inclusion within our Group
• Maintaining high standards, regulations and journalistic independence in our doing

Ullah remarked that the external value creation of Funke represents about 50 percent of the group turnover. Therefore, Funke sees a very high level in the procurement team when it comes to becoming more sustainable along the value chain:

“And how do we want to do this?
We want to say: ‘Transparency first!’”
(G. Ullah)

Ullah said: “We want to initiate a dialogue with our key suppliers based on a materiality analysis: What is important for Funke, what is important for our suppliers, and what is the best of both worlds that we can bring together and where we can derive action? Based on the ‘Lieferkettengesetz’, we need to come up with a monitoring also about the adherence to human rights factors. In the value chain we will implement a digital tool for that and count on all suppliers to deliver all the required data for human rights monitoring. We did a materiality analysis with our top 100 suppliers.”

The results and what Funke learned from them:

Pain Points and Success Stories

Overview of the challenges on our path to becoming more sustainable

Pain Points

– Feedback from suppliers on the “sustainability” project is critical – many suppliers are also still unprepared when it comes to “sustainability”.
– Corporate structures that have grown over time prevent rapid, sustainable alignment.
– “Human Factor”: Colleagues must be contacted and convinced of sustainable instruments.
– Missing tracking of already existing measures within the company.

Success Stories

+ Level 1 of BME Certification “Sustainable Procurement Organisation” achieved and signed off.
+ Broad level of support from within the company toward the topic.
+ Successful development of concrete user journeys for the application of sustainable tools in purchasing.
+ Inclusion of sustainability aspects in procurement strategies and strategic tolls (e. g. process manual).

“Sustainability is the future.
We act today to face the challenges of tomorrow.”
(G. Ullah)

In the second speech of the session Shyam Shanker presented the “Sustainable Procurement for Newspaper Production” of Bennett, Coleman and Co. Ltd.. He introduced the company as the “largest media house” in India with the following business areas:

They print more than 70 editions in six languages in 45 print locations; 18 of them are their own print centers, while the others are contract print partners.

Newsprint, inks and consumables are the main raw materials the company uses in its products. In the support services, it also uses IT in a big way.

“A lot of these materials that we use in our business have got bottlenecks due to various factors of which all of us are aware,” Shanker said. “But the core factor over here is the ‘Redistribution of demand’.”

The second factor, which has created imbalances, is what Bennett, Coleman and Co. calls “C.E.L.T.”.

Commodities, Energy, Labour and Transport have made structural changes to the way supply chains have operated in the past and how they are operating today. Some of these are possibly permanent changes and some of these are possibly interim changes, which could find their way reversed. But in this entire period of about for 24 months the media house has seen a significant amount of shift, which has created availability pressures and availability uncertainties, and which created bottlenecks to the business itself.

India consumes close to about 1.4 million metric tons of newsprint and half of that is imported. The reason being that India’s paper making industry produces paper on the base of short fiber trees and recycled inputs, which does not have high value for high quality printing. Therefore, there has been a need for the Indian Publishers to organise themselves in a way that they can manage demand in line with the capacities that they have to source material.

Shanker described the procurement challenges in India:

And here especially the capacity shutdown and disruption with newsprint (global situation):

Then he compared the newsprint sources supplying to India in the past (2010) with the present (2022). The supply sources have dwindled from many zones to only two zones:

He also mentioned the hyperinflation, which can be seen by very high levels of prices driven by areas like food price increases, energy price increases (in Europe), metals price increases, which impact the prices of printing equipment (like printing plates), increases in chemical prices and raw materials for printing inks; even the prices for cargo ships (transport).

“Hyperinflation is a large demon that we are dealing with
at this point of time.”
(S. Shanker)

At the end of his presentation, he gave a short outlook about “Will stability return?” with four key points to the future:

• Logistic and war disruptions should clear in near term?
• Trade shifts and changed geo-political world order from disruptions to persist?
• Climate change-related disruptions to intensify?
• Need for diversification: Concentration makes supply chains more volatile to future shocks.