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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 as a result of Ukraine conflict pose a looming existential risk.
“As a producer depending on fuel for our manufacturing… we’re very involved,” stated Kahla managing director Daniel Jeschonowski.
“We aren’t confronted with a scenario the place we have now to close down tomorrow however this isn’t tenable over an extended time period and also you simply cannot move [the price rise] alongside to prospects,” he added.
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His household acquired the 177-year-old enterprise, which makes porcelain dishes for the retail market and hospitality business, out of insolvency in 2020.
Present bulk costs for fuel of round 10 euro cents per kilowatt hour (kWh) have been down from 15-20 cents early within the yr, however have been nonetheless not commercially sustainable long run, he stated.
Germany’s energy-hungry sectors, together with chemical compounds, 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) stated earlier in June capability by way of the Nord Stream 1 pipeline could be reduce to simply 40% as a result of delayed return of apparatus beneath upkeep.
European leaders similar to German Chancellor Olaf Scholz have questioned whether or not the reduce is a political response to Western sanctions on Russia for its assault on Ukraine, which Russia denies.
Kahla stated it was happy with the way in which the power regulator has to date dealt with provide cuts. learn extra Its scheme features a deliberate tender bidding system to encourage producers to eat much less and an in depth survey of the wants of the business.
Jeschonowski is assured {that a} shock drop in pipeline stress, dreaded particularly by ceramics and glass makers whose ovens could be wrecked by sudden fuel cuts, shall be averted.
Nonetheless, it’s troublesome for the agency to chop fuel use.
“I evaluate it to a bakery, run with quite a lot of ardour. A baker has to maintain his oven going. Asking him to avoid wasting power would not actually assist, as a result of he wasn’t losing any power earlier than,” he stated.
Solely 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 stated.
Jeschonowski added that relocating overseas to chop prices was out of the query for the corporate, which is called after its residence city of Kahla within the state of Thuringia.
“I’ve a ardour for producing in Germany,” he stated.
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Writing by Ludwig Burger
Modifying by Alexandra Hudson
Our Requirements: The Thomson Reuters Belief Ideas.
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