Gas and freight costs put pressure on Kelheim Fibres
Viscose fibre producer Kelheim Fibres has announced that it will pass on increased energy and freight costs to its customers “at the soonest opportunity”. In addition, it will enter into discussion with customers to try to negotiate increases in fibre prices.
The company has warned that if it cannot secure an increase in fibre prices, it will implement cuts to production with the aim of minimising losses until it can mitigate cost increases it is facing.
In a statement, Kelheim Fibres explained that the problem is the cost of natural gas. It said that in the first part of December, the wholesale cost of natural gas in Germany increased by more than 50%.
It explained that it is entirely dependent on natural gas for the generation of electricity and steam. It said it was committed to implementing alternative sources of energy in the medium term but has “no viable short-term alternatives”. In addition, the raw materials used by the company often consume high levels of energy in their production and are also increasing significantly in cost.
In parallel, disruptions in global logistic are now expected to continue throughout 2022, the company said, with “massive increases in shipping rates, in some cases in excess of 80% being imposed without notice and with no opportunity for negotiation”.
These increases in cost will jeopardise the future of the business if they cannot be passed on through the supply chain, it warned.
It called on Germany’s federal government to take immediate steps to mitigate the impact of the cost increases.
