Shock!!! The 125-year-old Dutch paper company suddenly declared bankruptcy!

Crown Van Gelder, a Dutch paper maker, filed for bankruptcy just days after the District Court of North Holland declared it insolvent because of persistently high energy and raw material costs. The company, which employs 4,000 people, is understood to produce various types of paper for specific applications, such as ice cream packaging, luxury consignment paper and high-speed inkjet presses.

Miklas Dronks, director of Crown Van Gelder, told the Dutch newspaper de Volkskrant, "Because the price of energy and raw materials has risen sharply in the wake of the COVID-19 pandemic, the cost of production and operation for companies continues to increase in all aspects."

In an official statement, Crown Van Gelder explained that the ultimate financial issue was the result of a combination of factors. Despite Crown Van Gelder's good operating performance in fiscal 2022, the business failed to address the liquidity shortage, mainly due to unusually long production halts caused by increased costs and a sudden drop in orders. In 2021, Van Gelder's energy bill increases to 20 million euros.

Also last year, millions of dollars a month were spent on energy, according to Mr. Dronks, who described a "perfect storm" in which factors from all sides worked against the company on all fronts. Van Gelder was forced to impose an "energy surcharge" on its products. "When demand is high, it works," Mr. Dronks said.

The turnaround came in the last quarter of 2022, when Crown Van Gelder saw a drop in consumer orders. "Our customers were waiting to order and ran out of their inventory first. At the beginning of the year, our orders were down again and the whole thing was going like never before."

Mr. Dronks pointed out that the company had failed to secure additional credit from ABN Amro, a private bank. "We didn't have the financial cushion of a multinational company, and we tried everything we could to raise capital and it didn't work out." The Christian National Confederation of Trade Unions (CNV) was very surprised by the bankruptcy of Crown Van Gelder. "If a well-run company suddenly goes bankrupt because it can't pay its energy costs, that's something to think about."

Roger van Dyck, a spokesperson representing the Royal Association of Dutch Paper and Board Mills, noted that political support for the energy-intensive industry was minimal. "The countries around us are developing support packages for the industry, which has a negative impact on the competitive position of Dutch companies."

Mr. De Ronks told de Volkskrant that he believed the paper industry had a bright future. By reusing fibre many times, different kinds of products can be made. However, the business of "big energy consumers" like Van Gelder has been sluggish, but has not received government policy support and subsidies at all.

"There is no level playing field for companies like ours, and it is increasingly difficult for us to win orders at competitive prices." Van Gelder, who went bankrupt in the 1980s and delisted in 2015 after being taken over by an Austrian investment firm, has a long history dating back to the 17th century.

The CNV union fears that many employees will not wait for Van Gelder's rebirth. Large employers such as Tata Steel in North Holland have ample options for professionals due to labor market shortages.

The fate of Van Gelder is now in the hands of Dunselman and Mulder. Van Gelder director Dronks admits the company must hurry up. "There is definitely room for growth in this paper mill, and multiple parties have filed for takeover. We are also working on a rescue plan, but the restart must happen in the short term and our employees deserve it."