It’s a small but energy-intensive business: The company runs eight ovens that heat up and mold plastic sheets into whatever the customer requests. The largest oven is the size of a small room, with enough space to fit several people doing jumping jacks.
Running those furnaces has gotten a lot more expensive since Russia’s invasion of Ukraine. Before the war, the annual electricity bill was about €80,000. It’s nearly doubled since then, said managing director Christoph Keim, son of the company’s founder, a chemist who got his start after World War II with a company making disinfectants. Prices for customers rose, while profit margins shrank.
Eventually, costs receded. Relief came. But things didn’t return to their pre-war level. Instead, Keim entered a troubling new normal, where energy prices are double those of overseas rivals.
That reality is slowly eroding thousands of similar companies across Europe’s industrial heartland. Germany, Europe’s manufacturing powerhouse, has fallen into a recession expected to extend through the year’s end. Even global German stalwarts like Volkswagen, a name almost synonymous with the mighty Das Auto itself, are staring at unprecedented plant closures.
More broadly across the EU, output from key energy-intensive sectors like chemicals and steel is declining. Plants are shutting down. Industrial champions are announcing layoffs.
This low-wattage economy has policymakers issuing existential warnings — if things don’t change, they say, European industry will shrink to irrelevance. On Monday, Mario Draghi, the EU economic guru and former European Central Bank chief, offered a similarly dire message, using elevated energy bills to make his case for a massive overhaul of how Europe does business.