Finance

Oven off, greenhouses empty: high gas price causes problems for entrepreneurs

Gas prices have been going up and down for months but remain high. Earlier this year, large gas consumers such as the Aldel aluminum factory in Delfzijl and the Nyrstar zinc factory in Budel partly shut down production. Now companies in other sectors are also following.

RenĂ© Tielemans has a vegetable nursery. He has never spent so much money on gas in the past 25 years. “It was always between 10 and 40 cents per cubic meter, last week it was even 1.80 euros.”

‘Gardeners fall over’

He explains that half the price of a cucumber consists of energy costs. So if prices rise, he will have less left over from a cucumber. Gardeners often have contracts with suppliers. Simply raising prices when costs rise is often not possible.

Tielemans: “I have now decided to grow less, so part of the greenhouse remains empty.” Otherwise, he simply won’t be able to afford it. “If this continues, gardeners will really collapse.”

Extreme situation

Adri Bom Lemstra, chairman of Greenhouse Horticulture Netherlands, also makes this observation. “Gardeners are really getting into trouble now.” Unlike private individuals, companies conclude part of their energy contract for the longer term and, in the horticultural sector, for a quarter in the short term.

In this way, companies are more flexible and can reduce production if necessary. But that also means that if the gas price rises as extremely as it does now, you will be considerably more expensive. It has risen to such an extreme that you can no longer really speak of entrepreneurial risk, says Bom Lemstra.

The sector is now in talks with the relevant ministries. “This really needs to be resolved.” She is thinking of provisions such as postponing the repayment of the NOW, the emergency support for entrepreneurs.

High gas price can wipe out profits

ABN Amro expects the gas price to remain high in 2022. In a report earlier this year, it states that “in many industries, sharply increased rates could wipe out all profits.”

The bank compiled a list of the twenty most energy-intensive industries. This also includes the food industry. A lot of energy is also consumed here, but the margins are thin.

Hundreds of euros a week

At the bakery of Jan and Annalies de Leeuw, in Zegveld, Utrecht, bread is no longer baked on Mondays and Tuesdays. It is no longer profitable on those days because of the high gas price. The entrepreneurs have a variable contract, and the bill has increased by hundreds of euros per week in recent months.

“The oven is off to save money,” says Jan de Leeuw. His old oven uses a lot of gas. Buying a new oven is not an option. “I’m 62 years old, a new oven costs just under 100,000 euros and I’m not going to earn that back in 5 years.”

Fortunately, his customers understand, he says, that he does not have fresh bread on Monday and Tuesday. But making money with bread is becoming increasingly difficult with these gas prices.

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