One of the country’s most famous toilet paper makers, Hakle, is now struggling to survive. The sector is bearing the brunt of rising gas and transportation prices.
Germany may be running out of toilet paper. The German paper industry has warned of possible bottlenecks in the supply of this important product for all households. The main reason for this concern is to find a reduction in Russian gas deliveries to Germany.
“When there is a gas shortage, it is no longer possible to produce enough toilet paper“, clearly warns Martin Krengel, vice-president of the association “The paper industry“, explains the German weekly aim that”a lot of gas is needed to produce it“. Energy represents 30% of the production cost of this product. Germany already experienced a shortage of toilet paper at the beginning of the Covid-19 health crisis, and faced with the rush of this product, the distributor is forced to ration its sale, with the possibility of buying one package per person.
The famous German toilet paper manufacturer Hakle is now the first victim of the sector. The nearly 100-year-old Düsseldorf company applied in early September to undergo self-managed insolvency proceedings. In question, the sharp increase in the price of raw materials and energy. The company pointed it outthe huge increase in the cost of raw materials and energy supply as well as transportationare not sufficiently passed on to consumer prices in supermarkets or pharmacies. Beyond the concern about a possible shortage of gas, the explosion of its price has already burdened the sector, with the players having difficulty passing this cost on to the final consumer. This adds to the explosion in the price of pulp and paper transportation.
“More cost pressure”
Since March, the paper industry has been sounding the alarm on this dangerous situation. “The entire paper industry is under severe cost pressuresaid Gregor Geiger, chief executive of the paper industry association. “In this situation, it is important that paper manufacturers can pass on their increased costs to retailers.“, he warned, adding that manufacturers have often temporarily stopped production in recent months since “the production is free“.
As far as Hakle’s rights, with the implementation of this method, the management of the company remains on the board but is temporarily supported by experts in the restructuring. The company’s general manager Volker Jung wanted to be confident, in an exchange with the German newspaper Lebensmittelzeitung: “Self-management gives us the flexibility and speed needed to continue to reorganize our business and reposition it completely in the interest of our employees, customers and creditors. We are convinced that this repositioning will be successful in this difficult situation of the energy crisis that can be described as historic. “. The salary of 225 employees is covered by the insolvency allowance of the Federal Employment Agency for the months of September to November 2022 inclusive. The company’s important customers and partners have already shown their support.
In terms of company size, Hakle, with its recent annual turnover of around 80 million euros, is behind other large suppliers such as Wepa, Essity or Kimberly-Clark. In total, there are about ten manufacturers in Germany that produce about 750,000 tons of toilet paper per year throughout the country, reports the Paper Industry Association.
In France, the situation does not seem particularly encouraging. Toilet paper has been one of the most inflationary products in months. In August, the price of this product increased by 12.43% compared to August 2021. Paul-Antoine Lacour, general delegate of the French Union of cardboard, paper and cellulose industry (Copacel), alerted, mid-June, to the threat of a lack of toilet paper, but also paper towels and tissues. “Due to the lack of sufficient energy, the factories had to stop production”he warned.