European plants halt production due to high energy prices

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Damco Aluminium in the Groningen Farmsum (near Delfzijl) immediately stops production due to the high energy costs. According to the company’s management, temporary shutdown is the only option “due to the sky-high energy prices and a lack of government support”. The decision has major consequences for the approximately 200 employees.

The factory has been put into care and maintenance for an indefinite period, i.e. on standby. A small group of employees will continue to work to carry out essential tasks and to be able to quickly restart production of high-quality aluminum if conditions improve.

The production of aluminum requires a lot of energy. In October last year, the department where liquid aluminum is produced was already shut down. It cost about 120 jobs. Now the foundry is also closing, where purchased aluminum is melted and processed.

Damco Aluminium Delfzijl (Aldel for short) was commissioned in 1966 by Koninklijke Hoogovens, today Tata Steel. Aldel is a major employer in the region.

Today, the zinc company Nyrstar in Budel, Brabant, also stopped production. Both Aldel and Nyrstar were major consumers of electricity, which, like gas, has now broken all records in price.

It will not be the last companies in the Netherlands to limit or stop production, Rabobank economists predicted in a report last month. The chemical industry, the paper industry and the metal industry, among others, will have a hard time, the bank thinks.

 

About the author

Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at [email protected]

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