Snow showers formed the backdrop of my recent road-trip across Austria and Germany but thankfully it proved unnecessary to use the snow chains that I’d hired in Salzburg, even if it was tempting at times to apply them to my slippery work shoes.
Germany’s plastics packaging industry is doing well enough at present to not require any extra traction with the current economic situation regarded by many as positive. The upsurge in positivity is a significant improvement on the situation a year ago and reflects a belief that sales in the sector are on the rise. The profit situation, however, remains tense.
Having said that, the German industry association IK Industrievereinigung Kunststoffverpackungen (German Association for Plastics Packaging and Films) warned that high electricity costs and strong international tax competition – corporate tax cuts in the US have led to similar calls for reform in China and other industrial nations – will continue to put pressure on the domestic industry.
Despite the positive vibes during my customer visits and plant tours, with converters, machinery producers and material suppliers alike making investments in growth, one thing that did surprise me was the generally gloomy prognosis when it comes to skilled workers in Germany and Austria. Both countries have a fine pedigree when it comes to producing engineers, because it is a career that is generally held in very high esteem by the two countries, yet the majority of people I spoke to were concerned about a lack of skill coming through the ranks.
A recent study by economic research institute Prognos paints an equally dire picture of Germany’s labour market with a shortage of three million skilled workers predicted by 2030, rising to 3.3 million by 2040. Whilst this impacts a number of industries, not just packaging, it is a syndrome we’ve witnessed across the developed world for many years now. I remember British companies bemoaning the fact that they were forced to hire skilled engineers from outside of the UK in recent years due to a dearth of domestic talent. Are professions such as engineering losing their importance and appeal?
For German and Austrian companies, their ability to attract local students would appear to be increasingly vital to their future sustainability. In fact, during my week there one Austrian machinery manufacturer was conducting an open day for local students while another company in Germany was preparing for a similar event of its own.
Meanwhile, Freilassing-based Kiefel has committed to the building of a training centre, which will be completed at the start of next year and will offer a teaching environment for young people from the region. Out of 530 employees, Kiefel says that 50 are apprentices, and the company expects training places to increase to 80 with the extension.
In the past, immigration from other EU countries has covered the shortfall, but net immigration to Germany and Austria is now relatively low. The Federal Employment Agency has devised an action plan to help address this problem, which includes the targeting of immigration of skilled labour, increasing working hours to enable part-timers to move up to full time, the reduction of school drop-outs, and the increase of workers aged 55-64 in the economy. There is also a push to encourage more women to join the workforce.
Europe’s biggest consumer of plastics, Germany has retained a reputation for being environmentally conscious, helped by its long-standing deposit scheme for single-use packaging that operates across the beverage industry. Despite this, environmental groups have been critical of the country’s packaging regulations, set to come into force in January 2019, for not going far enough. The law aims to strengthen recycling and reduce the prevalence of single-use bottles and packaging in general.
According to recent calculations, Germans produce around 200kg of waste per person every year, from packaging waste alone, while the new packaging law will aim to increase the recycling rate for plastics to 58 per cent and then 63 per cent. That is before we consider any potential future push from the EU, with Brussels said to have plans to make all plastics packaging in the bloc recyclable by 2030.
Germany’s original plan to introduce a nationwide recycling bin for the collection of all valuable materials has been shelved, with the new law said to focus on voluntary commitment from local municipalities. There is, however, an intention to make it easier for consumers to distinguish between reusable and disposable beverages with improved labelling. In addition, the one-way pledge is being introduced for some drinks that were previously exempt, such as fruit juices.
Although recycling has long gone beyond the prescribed quota in Germany, the Packaging Act is set to ensure that more is invested in sorting and recycling facilities, and this will be crucial to progress.
Local municipalities will be responsible for determining how to carry out collection of the recycled and bioplastics packaging and how it is measured. They will also have to decide whether to collect additional plastics and metal waste together with the existing dual-collection system.
The coming law in Germany is just one example of the moves around Europe to find innovative plastics solutions within the context of mechanic and organic recycling and the circular economy. Many similar laws and legislations will follow, and you can be sure that some will slide through uncontested while others will face criticism and hit the occasional snow-drift. Snow chains at the ready.