Gas crunch pushes German glassmaker to the brink

KLEINTETTAU, GERMANY (AFP) – In 400 years, Heinz-Glas, one of the world’s biggest producers of glass perfume bottles, has seen off many crises – including the two World Wars and the oil shock of the 1970s in the last century alone.

But Germany’s current energy emergency strikes at the heart of its very existence.

“We are experiencing an exceptional situation,” Murat Agac, deputy chief executive of the family-owned company founded in 1622, told AFP.

“If there is a halt in gas supplies… then glass production will very likely disappear” from Germany, he said.

To make glass, sand is heated to temperatures of up to 1,600 degrees Celsius and gas is the most frequently chosen source of energy.

Until recently, a glut of gas flowing to Germany via a pipeline from Russia had helped keep production costs low, allowing Heinz-Glas to book annual revenues of some 300 million euros (S$422 million).

With competitive prices, exports made up 80 percent of the glassmaker’s total output.

But this economic model is now being called into question after Russia’s invasion of Ukraine.

Moscow has cut gas supplies to Germany by 80 percent, in what is believed to be a bid to weaken the resolve of Europe’s biggest economy in backing Ukraine.

Berlin is scrambling for alternative energy sources to replace the resource that once made up 55 per cent of its total gas imports.

The consequence: soaring energy prices.

For Heinz-Glas, that has meant a “ten- to 20-fold increase” in costs compared to 2019, said Agac.

Disclaimer: This report is automatically generated from worldwide news services. NTN is not responsible for its content and does not moderate it.

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