Fuel crunch pushes German glassmaker to the brink

KLEINTETTAU, Germany: In 400 years, Heinz-Glas, one of many world’s largest producers of glass fragrance bottles, has seen off many crises-including the 2 World Wars and the oil shock of the Seventies within the final century alone. However Germany’s present vitality emergency strikes on the coronary heart of its very existence. “We’re experiencing an distinctive scenario,” Murat Agac, deputy chief govt of the family-owned firm based in 1622, advised AFP. “If there’s a halt in gasoline provides… then glass manufacturing will very possible disappear” from Germany, he mentioned.

To make glass, sand is heated to temperatures of as much as 1,600 levels Celsius (2,912 levels Fahrenheit) and gasoline is essentially the most steadily chosen supply of vitality. Till lately, a glut of gasoline flowing to Germany through a pipeline from Russia had helped hold manufacturing prices low, permitting Heinz-Glas to guide annual revenues of some 300 million euros ($305 million).

With aggressive costs, exports made up 80 p.c of the glassmaker’s whole output. However this financial mannequin is now being referred to as into query after Russia’s invasion of Ukraine. Moscow has reduce gasoline provides to Germany by 80 p.c, in what’s believed to be a bid to weaken the resolve of Europe’s largest economic system in backing Ukraine.

Berlin is scrambling for various vitality sources to exchange the useful resource that after made up 55 p.c of its whole gasoline imports. The consequence: hovering vitality costs. For Heinz-Glas, that has meant a “ten- to 20-fold enhance” in prices in comparison with 2019, mentioned Agac.

‘3,000 soccer fields of photo voltaic panels’

Not solely Heinz-Glas, a lot of Germany’s business is buckling below the gasoline provide crunch. Many corporations are drawing up emergency plans because the German authorities has warned that Russian gasoline may cease flowing totally. With winter looming, the disaster is reaching fever pitch. Chemical substances large BASF is changing gasoline with gas oil in its second-biggest German manufacturing facility. Henkel, which specialises in adhesives and sealants, is contemplating whether or not its staff can do business from home.

However the penalties of a complete halt in Russian gasoline flows may very well be irreparable for a lot of corporations. On the Heinz-Glas manufacturing facility in Kleintettau, opened in 1661, round 70 tonnes of small glass bottles are produced every day, moulded by the warmth of the furnaces.

The fragile vessels adorned with intricate motifs are then despatched to the corporate’s clients-including its largest, French group L’Oreal-which fill them with fragrance. At each step of the manufacturing process-from making the fabric with quartz sand to the ultimate sculpting of the bottle-heat is crucial. On the firm’s second-biggest manufacturing facility within the mountain village of Piesau, a reduce in gasoline would completely harm its glass furnace, mentioned Agac.

To keep off the hazard within the quick time period, Heinz-Glas has invested in shares of liquefied gasoline, which might be pushed in by vans. However that triples the vitality invoice, and would nonetheless not be sufficient-the two German factories want the equal of “3,000 soccer fields of photo voltaic panels” to function.

In the long run, changing the whole gasoline system with electrical infrastructure would price 50 million euros ($51 million), Agac mentioned, a sum which the corporate can not afford. Even within the manufacturing facility of Kleintettau, the place furnaces are powered by electrical energy, round 40 p.c of the commercial processes nonetheless require gasoline.

“We’d like state help,” mentioned Agac, warning that the agency could in any other case be compelled to shift manufacturing elsewhere, corresponding to India or China, the place it already has a manufacturing facility. For the 1,500 staff of the corporate in Germany, the longer term appears to be like cloudy. “I’ve reached an age when it doesn’t matter a lot for me anymore. However youthful individuals should be fearing job losses,” mentioned Michaela Trebes, 61, inspecting tons of of little flasks rising from the manufacturing strains.

However for now, the administration stays optimistic that Heinz-Glas can pull by means of. Since 1622, “there have been sufficient crises… within the twentieth century alone, World Battle I, World Battle II, the oil disaster within the 70s, many, many essential conditions. We survived all of them,” mentioned Agac. “We are going to one way or the other additionally overcome this disaster.” – AFP

 

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