Historic German tissue manufacturer Hakle has filed for self-administration insolvency proceedings after facing “copious challenges” including increased energy prices that it said had “cornered the company”.
With an almost century-long history, Hakle said its move into administration allows it to start restructuring with the intention of repositioning itself in the German tissue market.
Business operations will continue entirely during the initiated proceedings.
Volker Jung, Managing Director of Hakle, said: “Self-administration offers us the necessary flexibility and pace to sustainably restructure our business and reposition it in the interests of our employees, customers and creditors.
“We are confident that the realignment will succeed in these challenging and historical times of energy crisis and that we will be able to further develop with the help of the dedicated work of our employees and our strong innovative power.
“It is about preserving the site and the related jobs.”
The tissue paper manufacturer with its traditional brands such as Hakle, Hakle Feucht and Servus said it faces “copious challenges” in the coming months.
Jung added: “We took the first steps to stabilise the company immediately.
“We have already comprehensively informed our employees about the current situation and the proceedings at a work meeting, and we will accompany and support them during these times in the best possible way.
“As a result, the entire workforce and the worker’s council have expressed their support for the restructuring proceedings.
“This response gives us the necessary strength and support for the tasks ahead.”
Jung said that recent energy and material prices had “cornered the company”. “We fell into the undertow of current events: the energy-intensive paper industry has been subject to severe upheavals in the global raw materials, logistics and energy markets since the beginning of the 2020 Covid-19 pandemic.
“As a result, those companies have been struggling with sharply increased challenges, especially in the gas and electricity sectors, for three years.
“Further events in 2022 have meant that the situation may be considered an intensification of historic dimensions.
“It has not yet been possible to pass on the massively increased transport, material and energy costs to a sufficient economic extent to customers in the food retail and drugstore sectors.”
Established in 1928, Hakle has been continuing an almost century-old tradition by returning to management as a family-owned company after a private equity investor group acquired the company in 2013.
It has produced numerous innovations in tissue paper, such as the paper packaging for toilet paper and kitchen paper used again for the first time in the German market in 2019 and the world’s first internationally award-winning product development of a tissue paper with a proportion of new sustainably and regionally produced fibres.
German producer prices rise to highest level on record
Hakle said it used 60,000 megawatt hours of gas and 40,000 MWh of electricity every year, and when the rise in energy costs came as quickly and as high as they did, Jung said the business was unable to pass them on to consumers.
German producer prices have risen to their highest level on record over recent weeks, as soaring energy prices continue.
Reports have said that energy prices were up 139% compared with last August and by 20.4% month-on-month.