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Coffee grounds in toilet paper, the original recipe of a German company in the face of the crisis

  • Post category:Economy News
  • Reading time:4 mins read

The recent trajectory of this almost century-old SME is dizzying: in 2020, it took advantage of a consumer rush on its production as the first confinement linked to the Covid 19 pandemic raged.

But in early September, Hakle, one of Germany’s leading toilet paper brands, filed for insolvency after seeing its energy bill “rise tenfold”, co-manager Karen Jung told AFP.

Strong demand

Despite the shock suffered by the Düsseldorf (west) company and its 220 employees, Ms. Jung is not discouraged.

Recycling coffee grounds in toilet paper is the latest find of the SME to reduce its costs, while acting for the environment.

“We want to use the fibers (from the marc) to make paper”, explains the one who runs the company created in 1928 with her husband.

The first rolls using this process left the factory last week.

The aim is to achieve between “20 and 25%” of coffee grounds used instead of cellulose from wood fiber, a raw material whose cost has also soared due to demand from China, more big consumer in the world.

This alternative would also make it possible to “use a quarter of trees less”, adds Ms. Jung, responsible for purchasing and marketing.

Hakle already succeeded two years ago in producing toilet paper from grass grown in the Rhineland, being able to include it “up to 30%” in the paper pulp, according to Ms Jung.

The preliminary insolvency procedure gives a three-month reprieve to the SME to turn around and present a viable plan for the continuation of activity.

The company is all the more keen to take up the challenge as it has “full order books”, says Ms. Jung.

The solar in support

If the financial equation suddenly became insoluble, it was because it was impossible for Hakle to increase its selling prices in proportion to its cost increases. The main competitors of the SME in Germany do not depend, for their part, on a single flagship product such as toilet paper.

“The cost of a roll of toilet paper is 80% related to pulp, energy, logistics, and these 3 factors are dictated by the global market,” says Ms. Jung.

Prices have risen to almost 400 euros per megawatt hour for gas, compared to around 50 euros before the energy crisis, and up to 1,000 euros for electricity. The Düsseldorf plant consumes some 100 gigawatt hours per year.

This week, the German Association of Small and Medium Enterprises (BVMW), the backbone of Europe’s biggest economy, warned of a wave of bankruptcies due to soaring energy costs.

Hackel has navigated the last forty years between several owners, from the American giant Kimberly-Clark to a Luxembourg private equity firm, before Volker Jung took over 50% of the shares in 2019 with a new entrepreneurial approach favoring innovation.

“After a short complete shutdown of activities (early September), we now have to go around again, like in a Formula 1 race,” explains Ms. Jung.

The company has already replaced the supply of gas with oil in the paper production cycle. For the electricity used during the transformation phase into rolls, the long-term objective is to cover half of the needs with photovoltaics.

A project launched 18 months ago and which will be continued depending on the outcome of the insolvency proceedings.