In Germany, a large manufacturer of perfume bottles is threatened with going out of business
Founded in 1622, Heinz-Glas supplies L’Oréal primarily in bottles. But the explosion in gas prices has shaken the institution.
With its 400-year history, the Heinz-Glas company, which produces glass bottles for the biggest perfumers, including L’Oréal, has weathered the storm. But the current gas crisis rocking Germany could be fatal.
“We live in an extraordinary situation,” said Murat Agac, executive assistant at the German family company, which has been at the helm for thirteen generations since 1622.
“If gas supplies stop (…) glass production will disappear,” he adds.
Located in the Rennsteig glass region in the border triangle of Bavaria in the south of the state and Thuringia in the east, the company is one of the major global players in the industry.
In his Bavarian factory in Kleintettau, almost 70 tons of glass are thrown out every day from the noise of the machines and the heat of the blast furnaces.
Cost multiplied by 10
To produce and shape this material, the factory needs high temperatures of up to 1,600 degrees. Gas is heavily used in this process.
Until recently, the resource flowed freely and at low cost thanks to the pipelines connecting Germany and Russia. But that era is over. Moscow cut supplies by 80% after the war in Ukraine.
Result, an increase in prices. For Heinz-Glas, the costs have increased “compared to 2019 tenfold, sometimes even twentyfold”, a situation that is “economically unsustainable”, estimates Murat Agac.
In Kleintettau, small vases decorated with relief motifs are modeled in the oven and carefully checked by workers before being sent to the company’s customers, including France’s L’Oréal.
The consequences of stopping Russian gas supplies would be very serious for the company, which produces a million of these bottles in Germany every day.
The blast furnace at the group’s second factory in Piesau, a mountain village at the foot of the pastures, would be permanently damaged if it stopped, Agac said.
Even in the Kleintettau plant, where the furnaces are powered by electricity, around “40 percent” of the industrial process still runs on gas.
50 million to pay
Like Heinz-Glas, all of German industry, the pillar of the eurozone’s first economy, is under threat.
Russian gas accounted for up to 55% of German imports in Ukraine before the war.
Manufacturers are now preparing for an imminent end to supplies, while the government already raises the specter of rationing.
Chemical giant BASF has developed a sweeping plan to replace gas with heating oil at its second German plant. For its part, the Henkel Group, a specialist in detergents and adhesives, is planning a massive use of teleworking.
To cope with this, Heinz-Glas has invested in a liquid gas storage facility that could arrive by truck every day.
But that should cost “three times more expensive” than before and will not be enough.
Replacing the entire gas system with electrical infrastructure could cost the group “50 million euros” in the long term, a sum that it cannot afford.
After the plague…
“We need government support,” says Murat Agac, leaving the risk of relocating to India or China, where the company already has a factory.
The group’s two German factories would also need the equivalent of “3,000 soccer fields of solar panels” to operate.
For the company’s 1,500 employees in Germany – and 54,000 industry employees nationwide – the prospects are therefore bleak.
“I’m old, but the young people here are scared of their jobs,” Michaela Trebes, 61, told AFP as she inspected hundreds of small bottles neatly lined up off the production lines.
The leadership tries to calm the troops down. “When we were founded, we experienced the Thirty Years’ War (…) the plague. And especially in the 20th century, the First and Second World Wars, the oil shock. .Agac.
