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Tuesday, February 7, 2023
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Ceramics keeps 50% of its employees in erte due to the lack of aid

Date: February 7, 2023 Time: 21:50:54

High energy prices have put the Spanish ceramic industry on the ropes. Since Russia began to forge its war against Ukraine back in the fall of 2021, converted in turn into an energy battle against Europe, the ceramic sector has not stopped seeing its production bill increase. The unavoidable need to use gas in its production and the rise in prices of this hydrocarbon process has raised the industry’s energy bill up to four times the price it paid in 2020.

If there is a place where this conflict is especially visible, it is in Castellón, where 20% of the jobs in the province are generated by the ceramic sector by companies such as Pamesa or Porcelanosa. A PwC study raises to 23% the weight of the ceramic industry on the provincial GDP, which generates 13.3% of industrial employment in the Valencian Community. It is also the main exporter in the region and the main client of the ports of Castellón and Valencia.

As a consequence of these high energy prices, companies have been paralyzing or reducing their production all year, which until October was 25% lower than the previous year. This, in turn, has an impact on employment: until mid-December, the employers’ association Ascer had 87 ERTEs with 9,825 affected workers, in addition to registering the first EREs with almost half a thousand jobs already destroyed in the province.

The energy bill does not stop growing

From the employers we have been demanding more and better aid for months to guarantee the sustainability of the business. Ascer confirms that the first aid has already been received, of 400,000 euros per worker, but criticized its insufficiency, since “for some of the large ones it does not even mean three days of gas consumption.” From an estimated turnover of 5,700 million euros in 2022, they calculate that the energy bill will amount to 2,235 million, a value that will multiply that of 2021 (939 million) by 2.5 and that of 2020 (416 million) by four.

The data for the sector’s exports up to November show how turnover has increased by 18% despite the fact that volumes have fallen by 12%. It is in the rises in the prices of deliveries, where the cost of production is affected, but this rise is not carried out proportionally to the rise in energy: “Margins are narrowing, threatening capacity and competitiveness,” they point out. Along these lines, its general secretary, Alberto Echavarría, said in recent statements to Europa Press that “it will be very difficult to survive without direct aid or defining costs, staff and investments.”

Ascer is now looking abroad, where the real challenge lies: surviving in markets like the United States, Turkey or Saudi Arabia, where it continues to compete on price. At the same time, they denounce the imbalances in state aid within the European Union and demand that government aid be made equal to that of other countries such as Italy or Germany, in order not to lose competitiveness.

Measures announced but do not arrive

The extension of the Royal Decree with measures in response to the war in Ukraine includes 450 million euros in aid to gas-intensive industries, but these will not be granted immediately. The Ministry of Industry must draft and publish the order that regulates them within a maximum period of six months, extending the terms until June. The industry minister, Reyes Maroto, promised to speed up this deadline.

The ceramic industry also claims that this help line will be reduced to a minimum by being distributed among 24 sectors —including paper, glass, iron, steel or aluminum— without knowing at the moment how much will be allocated to each one. “The amount of the aid will be distributed among the selected activities taking into account parameters linked to the intensive consumption of gas, the evolution of prices and benefits of industrial activities and their environmental impact,” the Ministry stated.

Political unanimity to save thousands of jobs

The importance of ceramics in Castellón has elevated the problem to a matter of state. Political parties of all colors have agreed to try to find solutions at different administrative levels, from town halls to the national government, passing through the regional one. The first, grouped in the ceramic cluster and hand in hand with the provincial council, promoted the manifesto “Salvem la Cerámica” to demand “forceful” aid.

To the State contributions will be added those announced by the Generalitat Valenciana, which will transfer the equivalent of 5,000 euros per worker and will open lines of credit through the Valencian Institute of Finance (IVF). The decree confirming direct transfers to companies is still being drafted, but the Valencian government expects it to come out “in a few weeks” to start the application period.

Meanwhile, companies have already submitted their applications to qualify for the 50 million credit provided by the IVF for the ceramic sector. The success of the proposal, with more applications than available, has meant that the Generalitat has had to set up another credit line of 180 million.

State aid is complemented by a line of credit from the ico for a value of 500 million euros for gas-intensive plants and various measures for electro-intensive plants. Among these are the 80% reduction in tolls until June 30 —valued at 112 million euros— 0.5% in the special tax on electricity. All of them have been validated by Congress.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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