Speaking at IPs eighth international conference, Innovation and Paper, Dominique Badinand, marketing and European sales manager for IP office papers west, attributed the problem to "unusually high customer demand following a period of heavy de-stocking".

It took IP by surprise and the company had "failed to predict" demand, he added.

The problem had not been helped by the implementation of a new IT system, Magiq, which will be in operation across the groups Western and Eastern European mills by 2003, said Badinand.

Other speakers at the event included the former US ambassador to Russia, James Collins, who looked at ways of doing business in the former Eastern block, and James Woudhuysen, Professor of Innovation at De Montfort University in Leicester.

Woudhuysen looked at the types of consumers that mills and merchants would be selling to in 2007. Smart paper with chip insertions and the ability to control inventory and logistics could be the paper of the future, he said, but he felt that merchants needed to interface more with customers and work on improving their levels of IT over the next five years.

"Customers will be looking for lower costs, and the ability for companies to sense and respond to new trends," said Woudhuysen. "If merchants move with the times, their brands and people could still pull through."

Story by Andy Scott