“No level playing field”: Van Gelder paper factory goes bankrupt after 125 years

30 Jan 2023 --- The District Court of Noord-Holland, Netherlands, has declared Crown Van Gelder bankrupt. The Dutch paper producer reportedly filed for bankruptcy due to ongoing high energy and raw materials costs. 

The paper industry in the Netherlands, with 4,000 employees, produces various types of paper for specific applications, such as ice cream packaging, luxury shippers and high speed inkjet printers. 

“Because of the stagnation in the market, our paper machines often came to a standstill,” director Miklas Dronkers tells the Dutch newspaper de Volkskrant. “The costs continued and we were already tight, because the prices for energy and raw materials had risen enormously after the pandemic.” 

A crisis too many
In an official statement, Van Gelder explains that the financial problems are a result of a combination of factors. Despite the positive operating result for financial year 2022, the paper producer has not been able to resolve a liquidity shortfall caused mainly by increased costs and a sudden drop in orders resulting in “unusually long” standstill of production. 

Furthermore, the company is uncertain about market developments in the near future. 

Just a few months ago, the former Van Gelder newsprint paper factory in Velsen-Noord, the Netherlands, celebrated its 125th anniversary. In 2021, Van Gelder saw the energy bill rise to 20 million euros. 

Also last year, according to Dronkers, “several millions per month” were spent on energy. He describes a “perfect storm,” in which the wind was against the company on all fronts. Van Gelder was forced to introduce an “energy surcharge” for its products. “That worked when demand was high,” says Dronkers.

Van Gelder reportedly spent several millions per month on energy.An energy-intensive industry
The turnaround came in the last quarter of 2022 and Van Gelder promptly saw a reduction in consumer orders. “Our customers waited to order and first used up their stocks. At the beginning of this year, we were once again thin on orders. The speed at which things went wrong was unprecedented.”

Dronkers reports failure to secure additional credit from private banker ABN Amro. “We don't have the financial buffers of a multinational. We have tried everything to get financing, in the end it didn't work out. The opposing forces were too great.”

The Christian National Trade Union Federation (CNV) says it was “completely surprised” by the bankruptcy of Van Gelder. “If a company that is running so well suddenly goes bankrupt because it cannot pay the energy costs, that is food for thought.”

Spokesman Rutger van Dijk, on behalf of the Royal Association Of Dutch Paper And Cardboard Factories, notes that political support for the energy-intensive industry is minimal. “Countries around us are setting up support packages for that industry and that has a negative impact on the competitive position of Dutch companies.”

A bright future? 
Dronkers tells de Volkskrant that he believes the paper industry to have a bright future. By reusing fibers multiple times, different kinds of products can be made. However, the economic standstill for “energy guzzlers” like Van Gelder is not being compensated by the government.

“There is no level playing field for companies like ours. It became increasingly difficult for us to win orders at competitive prices.”

Van Gelder went bankrupt in the 1980s, and the company was delisted in 2015 after being taken over by an Austrian investment company. The rich history of the paper factory even goes back to the 17th century.

The CNV union fears that many employees will not wait for a rebirth of Van Gelder. Due to the shortage on the labor market, large employers such as Tata Steel in North Holland have sufficient alternatives for specialized personnel.

The fate of Van Gelder now lies in the hands of the Noord-Holland curators Dunselman and Mulder. Van Gelder director Dronkers acknowledges that haste is required. “There is certainly room for this paper mill, several parties have applied. We are working hard on a rescue plan, but a restart must be realized in the short term. And our employees deserve that too.”

Edited by Natalie Schwerheim