Manufacturers across country could close factories amid energy crisis, warn industry leaders

According to experts, the UK’s long-ailing pottery industry is at the forefront of new uncertainty about its manufacturing future amid a sharp rise in energy prices.

Industry leaders have warned the government that factories serving multiple sectors across the country could shut down due to rising energy costs.

Analysts have predicted that UK households could increase their energy bills by 30 percent over the next year, a situation that is reflected in businesses that use a lot of electricity.

The British Ceramic Confederation, the industry representative, said: “Many ceramics companies have already bought most of their energy for the upcoming winter and so don’t have to pay the higher prices in full right away.

“However, some members are already facing higher gas, electricity and carbon prices, which leads them to cut production or to consider reducing it.

“Increased uncertainties about the demand for some ceramic goods, caused by the ongoing effects of Covid-19, also mean that some members are more exposed than they would otherwise have planned. This puts so many supply chains at risk from home building to food and beverage and other sectors.

“As prices continue to escalate and the period of high prices lengthen, a larger number of our members will likely be forced to cease production due to uneconomically high energy costs.”

Andrew Large, Director General of the Confederation of Paper Industries, and Gareth Stace of UK Steel attended a meeting with Economy Minister Kwasi Kwarteng and other energy-intensive industry representatives yesterday (Friday) afternoon to discuss the gas wholesale crisis.

In a subsequent interview with BBC Radio 4’s PM program, Mr Large claimed that in sectors such as paper, glass, cement, lime, ceramics, chemicals and steel, it was “very clear” that there were “serious” risks that Factories could stop all activities because gas prices are too high.

He said: “When we spoke to the Foreign Minister this afternoon, it was very, very clear in all sectors that there are serious risks of an effective factory shutdown due to excessive gas costs, and in these circumstances there will be gradual effects on supply chains, right up to the point for manufacturing, consumer retail and other products. So the risks are very, very real. “

When asked what this would mean for the paper industry, Mr. Large said, “Every minute that the machines are down, every minute that paper is not produced, it hurts and hurts the profitability of the industry Future investment potential and opportunities for the future. “

Speaking to Channel 4 News, Mr. Stace claimed that unlike other governments in Europe, the government had done “nothing” to alleviate the crisis. He said: “What we are asking of Kwasi Kwarteng today on wholesale prices is simply to intervene to ease these pressures in the short term, just like in Portugal or Italy, their governments are already investing billions of euros” to help their industries, and the British government has not done anything yet. “

As for the worst case scenario, Mr Stace said steel mills could be closed for good. He said: “The nightmare scenario would be that we are producing less steel in the UK, that we see that all the steel that we are using in the UK and that is growing is covered by imports and once you take a steel mill away you don’t actually bring it return. That’s it forever. When it’s done, it’s done. “

The chairman of the Energy Intensive Users Group (EIUG), Dr. Richard Leese said: “Our message to the Secretary of State was to take quick and preventive action to prevent recent production restrictions in the fertilizer and steel sectors from being carried over to other areas this winter.

“EIUG will work with the government to avoid threats to the production of essential domestic and industrial products as well as to an enormous range of supply chains that are critical to our economy, and to level the country.”

EIUG members include trade associations and customer groups representing industries with the highest energy consumption in the UK.

Kwasi Kwarteng

In a statement, the Ministry of Economic Affairs, Energy and Industrial Strategy said of the meeting: “The Minister of Economic Affairs stressed that the government remains confident about the security of gas supplies this winter. He also highlighted the £ 2 billion support package that has been made available to the industry since 2013 to help cut electricity bills.

“The Economy Minister stated that he was determined to ensure a competitive future for our energy-intensive industries and pledged to continue working closely with businesses in the days ahead to better understand and mitigate the impact of cost increases on businesses.”

Shadow Business Secretary Ed Miliband responded to Mr. Kwarteng’s conversations with industry officials, arguing that “this is a Downing Street crisis”.

He added, “Kwasi Kwarteng tries to meet industry leaders, but he just talks. This chaotic Tory government got us into this mess in the first place and has no intention of addressing it. “

The meeting comes after analysts predicted that Britain’s energy bills could rise 30 percent over the next year.

Research agency Cornwall Insight has alleged further volatile gas prices, and the potential collapse of even more suppliers could push the energy price cap to around £ 1,660 in the summer.

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