Unable to pass on costs to retailers, German tissue maker declares itself insolvent

Hakle, a German tissue paper manufacturer, has disclosed that it has filed for self-administration insolvency proceedings in the Düsseldorf District Court. The company claims it is unable to offset the rising costs of energy and raw materials used in production.

The corporation employs 220 people at the Düsseldorf site and manufactures products such as toilet paper and kitchen towels, using cellulose on a large scale in its manufacturing process. The input has become considerably more expensive in recent years due to increased demand and logistical problems.

Faced with the difficulties, the company announced that it intends to reorganize itself as part of a self-management process. This, however, does not mean that it will cease its activities: Hakle will continue to exist, as will its products and brands, and the management also remains in charge, but an administrator will be appointed to work alongside it, analyzing, above all, how the company can regain control of its costs.

During the insolvency proceedings, Volker Jung’s management will continue to manage the operating business. Lawyer and restructuring expert Dr. Jan-Philipp Hoos of White & Case law firm has been named interim administrator, according to local sources.

“Since the onset of the pandemic in 2020, the energy-intensive paper industry has been subject to severe upheavals in the global raw materials, logistics and energy market,” managing director Volker Jung said in a statement, adding that the situation worsened with the outbreak of the war in Ukraine and the massively inflated costs could not have been sufficiently passed on to customers.

With the appeal obtained by the insolvency, the payment of the employees would be guaranteed for the months of September to November, said the sources.