As in Germany, companies are protesting about expensive energy
All the effects of expensive bills for companies in Germany. Facts, numbers and controversies. Pierluigi Mennitti's article from Berlin
It is a toilet paper manufacturer one of the first victims of the explosion of energy costs in Germany. This is Hakle, a Düsseldorf company with a long tradition that has had to apply for a self-administered insolvency procedure due to the “massive increase in costs for the procurement of materials and energy” and in transport costs.
It could be just the beginning. The paper industry is now sounding the alarm about the consequences of the drastic increase in energy and raw material prices for the entire sector. “The entire paper industry is under enormous cost pressure,” said Gregor Geiger, CEO of the industrial association “Die Papierindustrie”. In this situation, he said, "it is important for paper producers to be able to pass on the cost increase to trade."
The situation is particularly difficult for toilet paper manufacturers, Geiger added. The reason is to be found in the gas-intensive drying processes in the production of toilet paper or kitchen rolls.
But paper is not the only industry to launch SOS. According to the Halle Economic Research Institute (IWH), the number of business failures in August increased significantly compared to the previous year. Insolvencies of partnerships and corporations were 718. This is 26% more than in August 2021. And a growing number of bankruptcies is also expected for the autumn. "After a long period of low insolvency levels, there has been a turnaround," said Steffen Müller, an economist at IWH.
And according to a study published by the Association of Industrialists (BDI), high prices are becoming a matter of survival for more and more medium-sized companies. More than 90% of companies are in ambush: 58% see the rise in energy and raw material prices as a strong challenge, 34% even as an existential challenge. In February 2022, still only 23% considered the existential challenge.
About 40% of companies said they were forced to postpone investments in the ecological transition and digital modernization. And as for energy, 28% of companies plan to change fuel sources in the medium term to be less dependent on gas. One in ten companies is switching from gas to oil. But more than a third of companies (37%) are unable to change sources and therefore remain dependent for the moment on gas and its crazy costs.
Still almost one in ten companies has reduced or stopped production in Germany. And nearly one in four companies is considering or is already in the process of relocating parts of production and jobs abroad to contain energy costs.
From statistics to real cases. Last week the steel company ArcelorMittal partially shut down production at two German sites due to "the exorbitant cost of energy", as written in black and white in a note. The steel mills in Bremen and Hamburg are affected by the partial reduction in production. The management has extended the reduced working hours mechanism to the workers of these two plants, which had contained unemployment risks during the pandemic crisis.
On the chemical front, another sector particularly affected by both price increases and reductions in gas supplies, BASF announced that it is closely monitoring the natural gas market. If necessary, it could further reduce production after Russia suspended supplies through the Nord Stream 1 pipeline.
(part one; part two will be published on 11 September 2022)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/come-in-germania-le-imprese-protestano-per-il-caro-energia/ on Sat, 10 Sep 2022 05:32:11 +0000.