EXPENSIVE GAS PUTS THE EUROPEAN CERAMIC INDUSTRY AT A CROSSROAD

Companies in the sector are considering outsourcing production, while others are considering closing their doors directly

The ceramics industry thought the worst was behind it after sales rose 10 percent in the first half of 2021 after the crisis over last year’s pandemic. But rising natural gas prices have posed another major hurdle for the sector.

The price of natural gas in Europe has risen by 300% since the beginning of the year and the energy-intensive industry must raise the price for its customers or close its production. One of the leading companies in the Italian ceramic industry - Iris Ceramica Group, increased prices by 3%, but not all customers accept this increase.

The company was one of the first gasified in the province of Emilia-Romagna in the 1980s. The supplier is the gas company Snam. But now the management of Iris Ceramica Group plans to invest in a project to produce green hydrogen. The energy for this will come from solar panels located on the roof of the factory.

The EU ceramics industry is estimated at 35 billion euros and provides 200 000 jobs. About 20% of the costs are for energy. Without any support in the short term, companies will face a serious crisis, experts say.

The ceramics industry is concentrated in Italy and Spain. Companies in the sector have invested more than 2 billion euros in the last six years in modernization and new technologies to cope with cheap products coming from China, India and Turkey.

Opportunities to outsource production are already being discussed among business representatives.

Others are already preparing to close, cutting off centuries-old production, such as a 165-year-old brick factory in the Netherlands that has survived many crises - two world wars, the disruption of coal supplies from Britain during World War I, and the transition from coal to natural gas.