Energy Crises and Inevitable Shortages in Europe￼
The intensification of aggressions in Ukrainian region will come into being lower financial growth, especially as we anticipate list of sanctions against Russia to have a chain of cause and effect on many savings around the globe, specifically Europe.
Tissue and Paper Industries are on Thin Ice
Smurfit Kappa Group CEO Tony Smurfit shared, “We would expect to be prioritized but in the event of gas rationing, I think we, the industry would be rationed as well. It is obviously a massive unknown situation.”
Since the Russian intrusion of Ukraine, the price of natural gas has increased promptly, arriving approximately 120 Euros per megawatt hour. This is the top-level in the past year. Europe relies densely on this fossil fuel power. In Italy, paper companies have stopped production due to the energy shock caused by the war in Ukraine. The situation has hit the complete production chain, from toilet paper to bundle materials and even recycling.
Even though there is this changeableness it is easy to foresee that the soaring in energy prices in Europe can cause shortages of items that require a lot of energy to produce. This means that tissue paper production may be limited or even stopped.
As a familiar scenario we’ve experienced not too long ago, we can see customers feuding for a pack of toilet paper at supermarkets around Europe.
Production Pauses in Germany & Italy
Again according to Tony Smurfit, “Clearly it would have a very dramatic effect on the market place because the largest paper producing nation in Europe is Germany. If paper was to be stopped, while we would be happy enough that we could continue to supply our box plants and customers, there will be some shortages in Europe.”
On 11 July 2022, Metsä Group declared that their production activities have stopped for an entire day in one of their mills in Germany and one in Slovakia. According to the company, the tissue business is very energy thorough and the extremely high energy prices are making the situation critical, and the important evaporation in the current business environment and the recent extreme developments in inflation from rising production prices have arisen in these temporary production stop.