European construction will be hit by a shortage of building materials as companies cut production because of energy costs and “chaotic” EU policies, according to the head of the world’s biggest brickmaker.
Heimo Scheuch, chief executive of Austria’s Wienerberger, which makes bricks, roof tiles and pipes, told The Financial Times that many of the company’s rivals had been forced to shut plants.
“They have literally closed down operations over the winter months, which leads to an undersupply,” he said. “We need to be careful, otherwise we will have increasing demand that we cannot satisfy from one day to the other. It’s new terrain for us.”
Scheuch said his company’s two brick plants in Russia have not been affected by the invasion of Ukraine, but the fighting has pushed up gas prices in Europe to nine times what they were a year ago.
He added that EU policies on cutting carbon emissions and labour lacked cohesion, leading to the shortages.
The Financial Times reports that Spain’s Grespania has slashed its annual ceramic tile production by 15% since last November and plans to make a similar cut in the second quarter of this year, should gas prices stay high.
Chief executive Luis Hernandez said the EU goal to reduce emissions by 55% by 2030 would result in the “destruction of Spain, Italy and Poland’s ceramics industries” as ever more expensive gas and carbon prices drained money needed to decarbonise kilns.
Nevertheless, Wienerberger this month announced that 2021 was its “best ever year”, with sales up 18% to nearly €4bn and net profit up from €89m in 2020 to €311m. Its practice of buying around 90% of its gas in advance insulated it from the surge in price, and it also managed to refine its process to use less energy.
Scheuch commented in a press statement that Wienerberger was “highly satisfied” with its performance. He said 2021 was a year of substantial growth, owing to high capacity utilisation, product innovation efforts, focus on sustainability, and successful mergers and acquisitions.
The company bought US brickmaker Meridian, increasing its presence in North America, and also bought FloPlast, a UK producer of wastewater and rainwater equipment.