One of the country’s most famous toilet paper manufacturers, Hakle, is now struggling to survive. The sector is bearing the brunt of the rise in gas and transport prices.
Toilet paper could be running low in Germany. The German paper industry warns of possible bottlenecks in the supply of this essential product for all households. The main cause for this concern is the drop in Russian gas deliveries to Germany.
“In case of gas shortage, it would no longer be possible to produce enough toilet paper“, clearly warns Martin Krengel, vice president of the association”the paper industry“, explaining to the German weekly Approach that “it takes a lot of gas to produce it“. Energy represents 30% of the production cost of this product. Germany had already experienced toilet paper shortages at the start of the Covid-19 health crisis, and faced with the avalanche of this product, distributors had been forced to ration their sale, with the possibility of buying a package per person.
The famous German manufacturer of toilet paper Hakle is today the first victim of the sector. The almost 100-year-old Düsseldorf company applied in early September to go through self-administered insolvency proceedings. In question, the sharp rise in the prices of raw materials and energy. The company states thatthe massive increase in the cost of raw materials and energy supply, as well as transportationconsumer prices in supermarkets or pharmacies were not sufficiently passed on. Beyond the concern about a possible gas shortage, the explosion in its price is therefore already weighing on the sector, with the difficulty of the players in transferring this cost to the final consumer. Added to this is the explosion in the price of paper pulp and transport.
“Huge cost pressure”
Since March, the paper industry has sounded the alarm in the face of this delicate situation. “The entire paper industry is under enormous cost pressuresaid Gregor Geiger, executive director of the paper industry association. “In this situation, it is important for paper manufacturers to be able to pass on their higher costs to retailers.“, he warns, adding that manufacturers have temporarily stopped production regularly in recent months since “production is no longer paid“.
As far as Hakle is concerned, with the implementation of this procedure, the company’s management remains on board, but is temporarily supported by restructuring experts. The general manager of the company Volker Jung was confident, in an exchange with the German newspaper Lebensmittelzeitung: “Self-management gives us the flexibility and speed to sustainably reorganize our business and fully reposition it in the interests of our employees, customers and creditors. We are convinced that this repositioning will be successful in this difficult situation of energy crisis that can be described as historic. “. The salaries of the 225 employees are covered by the insolvency benefit of the Federal Employment Agency for the months of September to November 2022 inclusive. Important clients and partners of the company have already shown their support.
Regarding the size of the company, Hakle, with a recent annual turnover of almost 80 million euros, is behind other large providers such as Wepa, Essity or Kimberly-Clark. In total, there are almost ten manufacturers in Germany that produce around 750,000 tons of toilet paper per year throughout the country, reports the Association of the Paper Industry.
In France, the situation does not look much more encouraging. Toilet paper has been among the most inflationary products for several 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 Pulp Industries (Copacel), already warned, in the middle of June, on the threat of a shortage of toilet paper, but also of paper towels and handkerchiefs. “Due to a lack of sufficient energy, the factories would have to stop producing”he warned.
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