The 400-year-old German company struggled to survive due to a lack of gas
In 400 years, the Heinz-Glas have gone through many crises, but the current energy shock is directly threatening their ability to survive.
Heinz-Glas, founded in 1622, is one of the world's largest glass bottle manufacturers. They have survived two world wars and the oil price shock of the 1970s. However, the company is now experiencing an "unprecedented situation", deputy director Murat Agac told AFP.
"If gas supplies are stopped, glass production will most likely disappear from Germany as well," he said. To make glass, sand must be heated to 1,600 degrees Celsius. Gas is the common fuel used in this process.
Previously, gas supplies to Germany via pipelines from Russia helped Heinz-Glas to keep production costs low. They have an annual turnover of about 300 million euros ($305 million). With competitive prices, exports account for 80% of the company's output.
However, this model is faltering after Russia launched a military campaign in Ukraine. Russia has cut off 80% of gas supplies to Germany, in retaliation for Western support for Ukraine and sanctions against Russia.
An employee checks product quality at Heinz-Glas' Kleintettau plant. Photo: AFP
Berlin then aggressively sought alternative sources of supply. As a result, fuel prices here skyrocketed. With Heinz-Glas, production costs have increased "10-20 times" compared to 2019.
Not only Heinz-Glas, much of German industry is struggling because of the lack of gas. Many companies are drawing up emergency plans as the German government warns Russia could stop supplying the country with gas altogether.
As winter approaches, this crisis deepens. Chemical giant BASF is looking to replace gas with fuel oil for its second largest plant in Germany. Henkel, with its adhesives and waterproofing products, considers having employees work from home.
However, the consequences of Russia stopping gas supplies can be difficult to overcome for many businesses. At Heinz-Glas' factory in Kleintettau, about 70 tons of small glass bottles are produced every day. Every manufacturing process requires heat. Their second factory is located in the village of Piesau.
To reduce short-term risk, Heinz-Glas purchased liquefied petroleum gas. This product can be shipped by truck. However, this can lead to a tripling of energy costs, which also does not meet demand. Its two factories in Germany need "as many solar panels as 3,000 football fields" to operate.
In the long term, replacing the gas system with an electric system will cost 50 million euros, Agac said. The company cannot pay this amount.
Even with the plant in Kleintettau, where the glassmaking is done by electricity, about 40% of the process still requires gas. "We need government support," Agac said, warning the company might have to move production elsewhere, like India or China, where it already has factories.
With 1,500 workers at Heinz-Glas in Germany, the future looks bleak. "At my age, this issue is not so important anymore. But younger people are afraid of losing their jobs," said Michaela Trebes, 61, a quality inspector.
However, company leaders still hope to be able to overcome this period. Since 1662, "we've been through a lot of crises. In the 20th century alone there were Great War I, Great War II and the oil crisis of the 70s. We were in danger many times. , but they all exist. So maybe we'll make it through this time, too," Agac concluded.
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