While the European Union’s priority strategic goal is to reduce its dependence on China by developing its own clean technology industry, European companies in the sector continue to struggle with enormous competitiveness challenges.
As another clear sign of this
Europe’s last sunglass manufacturer has also found itself in a serious financial situation, as a result of which it is expected that it will have to cease operations for good.
Based in Germany Glasmanufaktur Brandenburg GmbH (GMB) The glass manufacturing company filed for bankruptcy in July after the company became insolvent. Already in January, the company tried to deal with the situation that the demand for its products decreased due to cheap Chinese competition, and the utilization of its production capacity fell to approximately 40% by introducing shorter working hours.
An investor would have been willing to go after the company, but his takeover offer failed. GMB’s bankruptcy commissioner announced at the end of November that efforts to find an investor had failed, and Brandenburg’s economy ministry expressed its regret over the events. According to the words of Daniel Keller, the provincial minister of economy, quoted by pv magazine, they worked until the last moment to save the company and to find additional support opportunities, pushing the legally permissible limits, but the politician did not reveal the details of this.
The company has a plant with a production capacity of 300 tons/day near Berlin. The company’s approximately 215 remaining employees face layoffs following the unexpected collapse of a planned acquisition of the insolvent solar glass maker.
According to Keller, the failure of the investor agreement is a catastrophic development for the EU’s technological competitiveness objectives,
especially since it occurred in the highly sensitive area of energy production.
Based on the words of Brandenburg’s Minister of Economy, carelessness and negligence may have played a role in the downfall of GMB, but he did not elaborate on this either.
The local mining, chemical and energy union (IG BCE) expressed “deep disappointment at the dramatic development”. According to the interest representative body, the potential investor withdrew because he could not secure financing for the takeover. According to the IG BCE report, layoffs could begin as early as December 1, and the full plant closure is expected in March, after the notice period expires.
The union largely blames GMB’s former shareholder, the Indian parent company Borosil, for the unfavorable outcomecalling it unacceptable that the company is “dodging responsibility”. In the fall of 2022, the Indian Borosil Renewables acquired an 86% stake through its subsidiaries in the Interfloat Group, which also includes GMB. According to the Indian company’s communication at the time, thanks to Borosil’s highly efficient production technology, GMB’s productivity may increase, while its carbon footprint may decrease.
The economic competitiveness of the European Union has been shaken in the recent period vis-à-vis its major rivals, primarily China. China has an overall share of about 70% of the total global market for key clean technologies and more than 80% of the solar PV/battery market. The competitive disadvantage of European manufacturers is partly due to the higher energy costs here, but other factors also contribute, such as China’s established dominance in the global market of critical raw materials or Beijing’s alleged unfair state subsidies.
The EU, which has ambitious energy and climate policy goals, has more than just its industry competitiveness to strengthen it, it is crucial to develop the domestic production capacities of the most important clean technologies, but security of supply is also essential for its strengthening, therefore it is also an essential part of its green transition strategy.
The EU is trying to strengthen its own clean technology industry with various, among other, market protection tools, so far with halved results.
However, while, for example, in the field of electric car production, certain results of the efforts are already visible, in the field of solar panel production, the favorable turn has not yet taken place, we only need to think of the recent Hungarian or Dutch news, and the boost of the European-based battery manufacturing industry is also facing significant problems.
Cover image credit: Yuan Hongyan/VCG via Getty Images
