As Kronach depends on the glass industry – and fears – Bavaria

When Nikolaus Wiegand is asked to describe the situation, he first takes a deep breath. How do you approach something that is so unique in the 26 years since he has been managing the Upper Franconian company Wiegand-Glas: energy prices that are going through the roof, a war in Europe and every new day a lucky bag. “You can forget planning,” says Wiegand finally. It may be a bit similar to the beginning of the corona pandemic in spring 2020, when people wondered how long the supply chains would last. But what’s happening today with energy prices, “that’s no longer a market,” says Wiegand. “This is beyond the market.”

Entrepreneurs everywhere in Bavaria are primarily concerned with two questions these days: What will the energy for my systems cost me tomorrow? And how much do I pay for it? What follows from this for an industry and an entire region can be observed particularly well in the district of Kronach. The glass industry is still big there. And hungry for energy. In order to shape glass, the companies have to heat their pans to 1600 degrees Celsius, mostly with electricity and natural gas. The bottles and discs then appear glowing red. At the moment you can literally watch how money burns.

Business representatives have been complaining about high electricity prices for years. However, the needs have never been as great as they are now. So anyone who calls Wiegand in Steinbach am Wald will find an entrepreneur who appears frustrated on the one hand, and on the other tries to take the misery pragmatically. Wiegand-Glas employs almost 2,000 people at several locations. Among other things, they recycle PET bottles and make new bottles from old glass. A good business: Last year sales were 508 million euros, this year it could even increase significantly. “Actually, we’re a healthy company,” says Wiegand.

If it weren’t for the ever-rising energy prices. How serious the situation was before the war threw supposed certainties overboard can be seen from a video which Wiegand-Glas and two other glass companies put online in mid-February. Title: “Red Alert”. A representative of the local Chamber of Industry and Commerce (IHK) and the district administrator of Kronach also appear in it, it is about fear of existence and postponed investments, concerns about job cuts and site closures. In the film, the glass companies expect energy prices to increase by 500 percent in 2022 compared to previous years. In the meantime, “volatility” has increased further, reports Wiegand, “unfortunately only in one direction”. And with surcharges on their own products, manufacturers, regardless of the industry, can only counteract this to a limited extent. A crate of beer for 30 or 40 euros, who would buy that anyway.

The video is to be understood as a warning call

It is not yet the case that the insolvency administrators have to knock on the door of the companies on the Rennsteig. The video is to be understood as a warning call – which entrepreneurs would sign in other corners of the Free State. But in north-eastern Bavaria the needs are different, more direct. The textile and porcelain industries there have already shrunk over the course of time, and are now threatening car manufacture and even the seemingly inexhaustible forest resource due to climate change. On the phone, a local politician compares Kronach’s existence with Sisyphus: as a constant struggle against poor infrastructure, first as a zone, now as a free state border area.

An exit from the glass industry would therefore hit the region hard. The IHK assumes that at least 5,000 people are employed in the industry in northern Upper Franconia and southern Thuringia, and “there are another 2,500 employees in directly upstream and downstream trades”. District Administrator Klaus Löffler (CSU) is also alarmed. He used to be the mayor of Steinbach am Wald, so he knows firsthand the importance of the glassworks. He says he received “overwhelming response” to his participation in the video. The people felt the dangers for the business location – “and they know that if the children in our home country want to have a chance, then the course must be set for further prosperity here”.

From the point of view of many business representatives, this means that Germany and Bavaria need more self-sufficiency and security when it comes to energy. How difficult it is to take the step from theory to practice can also be studied in the district of Kronach. For example at Heinz-Glas in Kleintettau, ten minutes by car from Steinbach am Wald. Like Wiegand-Glas, a company with a centuries-old history, albeit a little smaller, world market leader in perfume bottles. Boss Carletta Heinz estimates that she could make herself less dependent on the energy market with her own ten wind turbines. Suitable locations are currently being sought, which the legal requirements do not necessarily make easier: “The Bavarian government is having a hard time with wind turbines,” says Heinz, keyword 10-H distance rule.

Ten wind turbines, that sounds feasible and yet comes up against scaling limits. At Wiegand-Glas they did the math, too, and in the end there was a need for 100 wind turbines. There are likely to be a few more if you add the rest of the industry: the glass companies on the Rennsteig alone together consume as much electricity as a town with 400,000 inhabitants. And because the pans run around the clock, additional energy storage is needed for quiet days. Hydrogen is conceivable. However, according to studies, there will not be enough of this in Germany for the foreseeable future, and its production also requires green electricity or natural gas. Nevertheless, the glass industry on the Rennsteig has already started a hydrogen project. The Free State will add one million euros.

Wind? Solar? Hydrogen? Solving the energy issue is the key

Solving the energy issue is also the key for Löffler. Whether wind, solar, hydrogen or ammonia, all forms of energy would have to be “tested and expanded” in the medium and long term. “In the short term, it’s about surviving with the conventional energy mix.” Löffler actually has great things in mind for his district. It should continue to have industry in 2030, ideally interlinked with the Lucas Cranach campus in Kronach; plus a mix of crafts and tourism, affordable housing, good health care and connections to long-distance transport. And there is still good news: Loewe, the once insolvent manufacturer of TV and audio equipment, is planning investments of 25 million euros at the company’s headquarters in Kronach. Almost 200 people are currently working there, and a company spokesman says they are “on the right track”.

On the Rennsteig, the glass companies are less interested in beautiful visions than in quick help and clear energy concepts. In their video they call for a cap on energy prices. “I’m not a fan of subsidies,” says Wiegand, but this time it wouldn’t work without government help. In addition, he does not want to make any predictions about how the market will develop in the coming weeks and months: they will just try to keep the money together.