German porcelain maker faces fragile future due to Ukraine war & More News Here

FRANKFURT, June 29 (Reuters) – For family-owned German porcelain maker Kahla the current cuts in Russian pure fuel provide to Germany and excessive power costs due to the Ukraine war pose a looming existential menace.

“As a manufacturer dependent on gas for our production… we are very concerned,” mentioned Kahla managing director Daniel Jeschonowski.

“We are not faced with a situation where we have to shut down tomorrow but this is not tenable over a longer period of time and you just can’t pass [the price rise] along to customers,” he added.

His household acquired the 177-year-old enterprise, which makes porcelain dishes for the retail market and hospitality business, out of insolvency in 2020.

Current bulk costs for fuel of round 10 euro cents per kilowatt hour (kWh) have been down from 15-20 cents early within the 12 months, however have been nonetheless not commercially sustainable long term, he mentioned.

Germany’s energy-hungry sectors, together with chemical substances, metals, paper, ceramics and porcelain, are in turmoil after the nation final week triggered the “alarm stage” of its emergency fuel plan in response to falling Russian provides. learn extra

Russian fuel producer Gazprom (GAZP.MM) mentioned earlier in June capability by way of the Nord Stream 1 pipeline can be minimize to simply 40% due to the delayed return of apparatus below upkeep.

European leaders comparable to German Chancellor Olaf Scholz have questioned whether or not the minimize is a political response to Western sanctions on Russia for its assault on Ukraine, which Russia denies.

Kahla mentioned it was happy with the best way the power regulator has to date dealt with provide cuts. learn extra Its scheme features a deliberate tender bidding system to encourage producers to devour much less and an in depth survey of the wants of the business.

Jeschonowski is assured {that a} shock drop in pipeline strain, dreaded particularly by ceramics and glass makers whose ovens might be wrecked by sudden fuel cuts, will probably be averted.

Nevertheless, it’s troublesome for the agency to minimize fuel use.

“I compare it to a bakery, run with a lot of passion. A baker has to keep his oven going. Asking him to save energy doesn’t really help, because he wasn’t wasting any energy before,” he mentioned.

Only a handful of porcelain producers are left in Germany amid low-cost competitors from Asia and so they have exhausted all power effectivity measures, he mentioned.
Jeschonowski added that relocating overseas to minimize prices was out of the query for the corporate, which is called after its residence city of Kahla within the state of Thuringia.

“I have a passion for producing in Germany,” he mentioned.

Writing by Ludwig Burger
Editing by Alexandra Hudson

Our Standards: The Thomson Reuters Trust Principles.

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