Baden-Württemberg State Secretary of Economic Affairs Dr. Rapp Goes All In for the Industrial Sector

The State Secretary of Economic Affairs, Labor, and Tourism of the State of Baden-Württemberg, Dr. Patrick Rapp, recently highlighted the need for swift and effective reforms in the energy sector: During a visit to the Koehler Group site in Oberkirch together with Thorsten Erny, Chief Administrative Officer (Landrat) of the Ortenau district, Rapp took a close look at the situation on site and had the following to say: “The business sector – our SMEs in particular – is absolutely crucial to our prosperity as a society. That’s why a quick look at the excruciatingly difficult conditions currently being faced by businesses makes it clear that we have an urgent responsibility as policymakers to improve things before our companies drown under unfair conditions in a global market. This doesn’t just mean cutting red tape quickly, but also making sure that energy in Germany becomes significantly cheaper. Needless to say, the relief measures that are currently being discussed and have been agreed upon are only a first step. What will truly be vital is the decisions we make to smooth the path forward in the medium and long terms.”

Long-term reduction in energy prices vital in order to secure competitiveness in Germany

During the visit, Koehler Group representatives underscored just how important it is for German SMEs to see a change in energy prices for energy-intensive industries in Germany in order to become competitive once again. Koehler Group COO Dr. Stefan Karrer had the following to say: “Due to high energy costs in Germany, we’re experiencing enormous competitive disadvantages in an industry where competition is global. In order to be able to ensure job security and value creation here, we really need to once again have public grid energy prices that are internationally competitive and can be reliably budgeted for.” When looked at in conjunction with everything else, the industrial electricity rates currently announced by the German federal government will hardly make a dent in the grim situation that is putting German businesses in energy-intensive industries at a serious competitive disadvantage. “If we had to make the decision to build our latest production facility in Kehl today, there’s simply no way we would have been able to go ahead with it. We’re talking about an investment of around 300 million euros that we made six years ago, and much to our chagrin, it’d simply be impossible to make those numbers work in Germany right now,” Dr. Karrer said to underscore just how critical the issue is. An export percentage of over 70% means that the company is competing with international competitors, and many of those competitors have production conditions that are simply much more attractive at a global level due to lower electricity costs, which represent the lion’s share of the costs involved in papermaking.

 

 

Figure: A visit showed that more planning certainty and dependability are a key factor for getting the state’s industrial sector back on track: Dr. Patrick Rapp (State Secretary of Economic Affairs, Labor, and Tourism of the State of Baden-Württemberg, second from left), Philipp Prechtl (Managing Director, Koehler Innovative Solutions, left), Thorsten Erny (Chief Administrative Officer, second from right), and Dr. Stefan Karrer (Koehler Group COO)