In 400 years, Heinz-Glas, one of the world’s largest manufacturers of glass perfume bottles, has survived many crises – in the last century alone, the two world wars and the oil shock of the 1970s.
But Germany’s current energy emergency strikes at the heart of its existence.
“We are experiencing an exceptional situation,” Murat Agac, deputy chairman of the board of directors of the family company founded in 1622, told AFP.
“If gas supplies stop, glass production will very likely disappear,” he said from Germany.
In glass production, sand is heated to temperatures of up to 1,600 degrees Celsius and gas is the most commonly chosen energy source.
Until recently, a glut of gas flowing from Russia to Germany via a pipeline had helped keep production costs low, enabling Heinz-Glas to generate annual sales of around 300 million euros.
With competitive prices, exports accounted for 80 percent of the glassmaker’s total production.
But this economic model is now being called into question following Russia’s invasion of Ukraine.
Moscow has cut gas supplies to Germany by 80 percent, presumably in an attempt to weaken the resolve of Europe’s largest economy to support Ukraine.
Berlin is looking for alternative energy sources to replace the resource that once accounted for 55 percent of its total gas imports.
The result: rising energy prices.
For Heinz-Glas, that means a “10 to 20-fold increase” in costs compared to 2019, Agac said.
– ‘3,000 soccer fields solar panels’ –
Not only Heinz-Glas, but also a large part of German industry collapses under the gas supply crisis.
Many companies are preparing contingency plans as the federal government has warned that Russian gas could shut down altogether.
With the approaching winter, the crisis reaches its climax.
The chemical giant BASF plans to replace gas with heating oil in its second largest German factory.
Henkel, which specializes in adhesives and sealants, is examining whether its employees can work from home.
But the consequences of a complete halt to Russian gas flows could be irreparable for many companies.
In the Heinz glass factory in Kleintettau, which opened in 1661, around 70 tons of glass bottles are produced every day, which are shaped by the heat of the ovens.
The delicate vessels, adorned with intricate motifs, are then sent to the company’s customers – including the largest French group L’Oreal – who fill them with perfume.
Heat is essential at every step of the production process – from creating the material with quartz sand to the final shaping of the bottle.
At the company’s second-largest factory in the mountain village of Piesau, a gas failure would permanently damage the glass furnace, Agac said.
In order to ward off the danger in the short term, Heinz-Glas has invested in liquid gas supplies that can be brought in by truck.
But that triples the energy bill and still wouldn’t be enough — the two German factories need the equivalent of “3,000 football fields of solar panels” to function.
In the long term, replacing the entire gas system with electrical infrastructure would cost 50 million euros, Agac said, a sum the company cannot afford.
Even at the Kleintettau plant, where ovens are powered by electricity, around 40 percent of the industrial processes still require gas.
“We need government support,” Agac said, warning that otherwise the company could be forced to shift production elsewhere, such as to India or China, where it already has a factory.
The future looks bleak for the company’s 1,500 employees in Germany.
“I’ve gotten to an age where it’s not that important to me anymore. But younger people have to fear job losses,” says Michaela Trebes, 61, while inspecting hundreds of vials coming off the production lines.
But for now, management remains optimistic that Heinz-Glas can pull through.
Since 1622, “there have been enough crises…in the 20th century alone, World War I, World War II, the oil crisis in the ’70s, many, many critical situations. We have survived them all,” Agac said.
“We will somehow overcome this crisis.”
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