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Spanish container glass in ‘critical’ situation according ANFEVI
The shop windows are experiencing a perfect storm since the pandemic began to subside, with production difficulties to which the cost of energy, the war in Ukraine and the carriers' strike have been added, which puts at risk the supply of containers to more than 8,000 food companies.
This has been explained to Efeagro by the general secretary of the National Association of Glass Container Manufacturers (Anfevi), Karen Davies, who has expressed that the situation is "critical" and "a clear sign of decline in the competitiveness of this sector in Spain".
In the worst moments of the pandemic, certain market segments affected by the situation, such as wine, beer or spirits, which with closed restaurants and hotels could not sell their products as usual, reduced their requests for packaging of glass. Now, after the health alert, the ovens in the shop windows have not been able to cope with the peaks in demand for packaging that they have received from these sectors and from other areas of agri-food that have been recovering with the end of the restrictions that caused the pandemic.
Added to these problems in satisfying the companies has been an increase in energy costs, which have skyrocketed even more with the war in Ukraine, and a freight transport strike that prevents both the correct provision of raw materials in glass furnaces such as supplying packaging to food and beverage brands.
The wine, brewing and spirits sectors, which were also very sensitive to closures in the pandemic and increased their demand after reopening, are some of the most affected by these difficulties in obtaining glass containers, according to Davies.
"In addition to the problems it causes to the glass industry itself, the more than 8,000 Spanish food companies that use glass containers will find it difficult to get their products to distribution, hotels and restaurants or export," said the Anfevi representative.
THE GLASS INDUSTRY CANNOT STOP
Glass manufacturing is characterized by a continuous production process in which an unscheduled interruption causes technical problems, high repair costs of up to 25 million euros, and a delay of up to a year and a half before returning to the productive regime, or even the impossibility of starting again with consequences of irreparable damage.
However, the risk that the industry will have to stop its activity is high, both because of the war in Ukraine and because of the transport strike, which since last week forced some glass companies to close their production lines and, if the situation is not improving, it will lead to furnace closures this week, Davies has assured.
On the other hand, the increase in the price of energy (mainly natural gas) has multiplied by two since the Russian invasion of Ukraine began and, if before it represented between 20% and 30% of production costs, now it has become 68.40% and 78.16%.
“A totally unsustainable situation for the industry. If you do not see the cost reversed immediately or if you do not receive aid to mitigate the cost overrun, you will have no choice but to stop production to avoid losses, "said Davies.