ASCER regards the Royal Decree-Law’s urgent measures as being clearly insufficientSector30 March 2022
Allocated funding is based on the number of workers, with a maximum of €400,000 per company, an insignificant amount.
Spanish Royal Decree-Law 6/2022, by virtue of which urgent measures are adopted within the framework of the National Plan to respond to the social and economic consequences of the war in Ukraine, does not go far enough to mitigate the serious situation faced by the sector.
Gas-intensive industries from the paper, cardboard, glass and ceramic sectors are entitled to direct aid for a total figure of €125 million to be shared out among 1,600 companies.
In the field of employment, what is deplorable is the general clause forbidding all companies with a temporary redundancy plan in place from dismissing staff for objective reasons due to the Ukraine war in order to try and survive the crisis. The most likely consequence is that companies will resort directly to dismissals.
Having analysed the details of Spanish Royal Decree-Law 6/2022 of March 29th, by virtue of which urgent measures are adopted within the framework of the National Plan to respond to the social and economic consequences of the war in Ukraine, the Spanish Association of Wall and Floor Tile Manufacturers (ASCER) wishes to express its discontent due to the reduced scope of the package of measures. The application of the approved text is not clear and there is a certain lack of definition that creates uncertainty among companies at a time when the economy needs just the opposite.
In matters concerning energy, direct aid is established for gas-intensive companies from the paper and carboard (CNAE2009 171), fibre (CNAE2009 206), glass (CNAE2009 231), refractory tile (CNAE 232) and ceramic tile (CNAE 233) sectors.
The amount of aid is based on the number of workers, with a maximum of €5,000 per worker for the ceramic sectors (CNA 232 and 233) and €2,600 for all the other gas-intensive sectors, with a limit of €400,000 per company in all cases.
Hence, a typical company from the sector could receive a maximum of €400,000–an insignificant amount if we bear in mind the fact that the average monthly gas bill for the last period could amount to some 2 million euros. The average size of the industry’s workforce is 103 members of staff per company. However, it is important not to forget that as well as SMEs, there are big companies with a far bigger workforce which will be penalized with this calculation.
Also, the contemplated aid does not encompass independent spray-drying companies, the most gas-intensive companies in the tile sector. This leads to an imbalance in the sector, since spray-driers integrated in tile companies do have access to this aid.
“In the sector, we were hoping for a more solid response, with more measures that have come to nothing, such as a reduction in gas access rates, the elimination of hydrocarbon taxes or extensions to payment deadlines for companies affected by the energy crisis, all aimed at boosting companies’ liquidity so that they can maintain their production and their workforce,” said Alberto Echavarría, ASCER’s Secretary General.
“The European Commission has paved the way for solid aid for companies affected by energy costs, allowing for aid of up to 50 million euros per company. The tile sector asks the Spanish government to earmark sufficient funds for the said aid to be increased to the maximum permitted amount. There is no sense in the Commission citing aid of up to 50 million euros when, in Spain, only up to €400,000 is available per company,” added Echavarría.
Other measures included in the Royal Decree-Law refer to electricity charges, with a 36% discount applied to both the contracted power and consumed energy. In accordance with the sectoral information at our disposal, electricity charges can account for about 50% of the fixed part of the electricity bill for companies.
An 80% discount on electricity access rates for electro-intensive industries has been established. Many companies from the tile sector are not included in the Electro-Intensive Consumers Regulation and so they cannot benefit from this discount. If the European definition of an electro-intensive sector had been taken into account, the whole sector would have been able to take advantage of this discount on access rates.
In the field of labour there are two main new measures: all companies benefitting from direct aid under the Royal Decree-Law are forbidden from dismissing workers for objective reasons through to June 30th and all companies receiving public aid that are involved in temporary redundancy proceedings as a result of the Ukraine war are forbidden from dismissing staff for objective reasons.
From December 1st to March 25th, a total number of 27 temporary redundancy plans have been presented in the sector, affecting 3,930 workers in all. The sector as a whole employs over 17,000 people. If we take into consideration the fact that temporary redundancy plans mainly affect workers on production lines and they account for about 60% of the workforce, at the moment, at a sectoral level, over 40% of its production workers are currently affected by temporary redundancy proceedings.
What is absolutely deplorable is the general prohibition to dismiss staff for objective reasons due to the Ukraine war imposed on all companies that resort to a temporary redundancy plan in order to try and survive the crisis. The most likely consequence is that companies will resort to direct dismissals.
Although they have raised the prices of their products, companies from the sector are absorbing most of the rising costs–not just energy costs but also those of all the other raw materials–to the detriment of their returns in order to try and remain competitive internationally. This situation is not sustainable, bearing in mind that the economic and energy situation will not be resolved in the short term.
The tile sector and its share of the economy
The Spanish tile sector makes an important contribution to the economy of the Valencia region and to Spain as a whole. The tile sector accounts for 14.4% of the Valencia region’s industrial GDP and over 20% of the province of Castellón’s total GDP. The cluster is an important driving force, with a multiplier effect, since for every euro of the direct GDP that the sector contributes to the Spanish economy, an additional indirect 2.1 euros are generated (2019 data).
Furthermore, it accounts for 11.6% of all industrial employment in the Valencia region and 17.9% of all employment in the province of Castellón. For each direct job in the sector, it generates 2.8 additional indirect jobs (2019 data).
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