In Germany, the toilet paper industry is sounding the alarm this winter

In Germany, the toilet paper industry is sounding the alarm this winter

Hakle, one of the country’s most popular toilet paper manufacturers, is struggling to survive. The sector bears the brunt of rising gas and transportation prices.

Toilet paper may be running out in Germany. The German paper industry is warning of potential bottlenecks in the supply of this essential product to all households. The main reason for this concern lies in the decline in Russian gas shipments to Germany.

In the event of a gas shortage, it will not be possible to produce enough toilet paperMartin Kringle, Vice President of the Association, clearly warns.Paper IndustryAn explanation of the German weekly to focus that “A lot of gas is needed to produce itEnergy accounts for 30% of the cost of producing this product. Germany already experienced a shortage of toilet paper at the beginning of the Covid-19 health crisis, and in the face of the rush for this product, distributors were forced to legalize its sale, with the possibility of purchasing one pack per person.

The famous German toilet paper manufacturer Hakle is today the first victim of this sector. The nearly 100-year-old Düsseldorf company filed in early September to start its own insolvency proceedings. In question, the sharp rise in prices for raw materials and energy. The company indicates thatThe dramatic increase in the cost of raw materials, energy supply as well as transportationIt has not been sufficiently passed to consumer prices in supermarkets or pharmacies. In addition to worrying about potential gas shortages, the explosion in its price is already weighing on the sector, with players having a hard time passing that cost on to the end consumer. Added to this is the explosion in the prices of pulp and transportation.

‘Colossal cost pressures’

Since March, the paper industry has sounded the alarm about this delicate situation. “The entire paper industry is under tremendous cost pressureGregor Geiger, CEO of the Paper Industry Association. “In this case, it is important that paper manufacturers pass on their increased costs to retailers.“, he warns, adding that manufacturers have regularly paused production in recent months since.”Production is no longer paid“.

For Hakle, with this action in place, the company’s management remains on the board of directors but is temporarily supported by restructuring experts. The general manager of Volker Jung wished to be confident, in an interview with the German newspaper Lebensmittelzeitung: “Self-management gives us the flexibility and speed needed to sustainably reorganize and completely reposition our business for the benefit of our employees, customers and creditors. We are convinced that this repositioning will succeed in the difficult situation of an energy crisis that can be described as historic. The salaries of 225 employees are covered by the insolvency allowance from the Federal Employment Agency for the months from September to November 2022 inclusive. The company’s important clients and partners have already shown their support.

In terms of company size, Hakle, which has a recent annual turnover of around €80 million, lags behind other big suppliers such as Wepa, Essity or Kimberly-Clark. In total, there are approximately ten factories in Germany that produce about 750,000 tons of toilet paper annually across the country, according to the report of the Confederation of Paper Industry.

In France, the situation does not look more encouraging. Toilet paper has been among the most bloated 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 Confederation of Cardboard, Paper and Cellulose (Copacel), already alerted, in mid-June, of the danger of a shortage of toilet paper, as well as paper towels and napkins. “Because of the lack of sufficient power, factories will have to stop production”to caution.

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