The oven heated to 1,500 degrees was glowing. Workers at Arc International’s glass factory loaded it with sand, which slowly melted. Not far away, in the workshops, machines injected hot air into the mass of glass and transformed it into thousands of delicate wine glasses, destined for restaurants and homes around the world.
Nicholas Hodler, managing director of the Arc Group, surveyed the assembly line, which shimmered in the blue glow of the natural gas flames. For years, Arc had benefited from cheap energy, which had helped to make it the world’s largest manufacturer of glass tableware – and a key employer in this working-class region of northern France. [Pas-de-Calais].
But the repercussions of the sudden cut in Russian gas to Europe put the company in difficulty. The rise in energy prices is such that Hodler has had to revise its economic forecasts six times in two months. Recently, the company put a third of its 4,500 employees on partial unemployment. Of the plant’s nine kilns, four are going to be shut down; the others will switch from natural gas to diesel, a cheaper but more polluting fuel.
“This is the most dramatic situation we have ever experiencedexplains Hodler, shouting to drown out the clink of glasses. For energy-intensive companies like ours, this is a real blow.”
Half of aluminum and zinc production stopped
Arc is not the only one in this case. Soaring energy prices are heavily penalizing European industry, forcing factories to rapidly reduce production and put thousands of their employees on partial unemployment. Even if such measures are supposed to be temporary, they increase the risk of a deep recession in Europe. Eurozone industrial production fell 2.3% in July from a year earlier, the biggest decline in more than two years.
Other sectors, such as metallurgy, paper mills, fertilizer production and many others have announced savings measures. Indeed, they are dependent on gas and electricity to transform raw materials into finished products, from car doors to cardboard boxes. According to Eurometaux, the European metals industry association, half of the production of aluminum and zinc has been stopped.
Europe’s largest steelmaker, Arcelor Mittal, has shut down blast furnaces in Germany. Alcoa, a global manufacturer of aluminum products, is cutting production at its blast furnace in Norway by a third. In the Netherlands, Nyrstar, the largest zinc producer, has halted production until further notice.
Even toilet paper is no exception: in Germany, the Hakle company, one of the largest manufacturers, announced that it had become insolvent due to a “historical energy crisis”.
Arc provides 15,000 indirect jobs
A crisis that worries the inhabitants of Arques. The economy of this city has been linked to the manufacture of glass for more than a century. The Arc group as it exists today was founded in 1825 under the name of Verrerie Cristallerie d’Arques, it was then a