The future of a glass manufacturing plant in Wigan, UK, is hanging in the balance as Nippon Electric Glass (NEG) initiates a strategic review of its composites business, Electric Glass Fiber UK.
This move casts a shadow over the facility, which produces fiberglass crucial for reinforcing plastics used in wind turbine blades and electric cars – key components in the burgeoning renewable energy and electric vehicle sectors.
NEG cites a “challenging competitive environment” marked by escalating costs for raw materials, energy, and logistics, compounded by a slump in sales, as the driving force behind the review. This perfect storm has significantly impacted the profitability of the UK-based composites arm. The latest financial accounts reveal a stark contrast, showing a loss of £3.47 million in 2023, a significant downturn from the £7.4 million profit recorded in 2022. The company attributes this decline not only to rising operational costs but also to “lower customer demand resulting from competition from Chinese imports.”
The two-month strategic review will explore a range of options for the Electric Glass Fiber business. This includes the potential sale of the business or the formation of strategic partnerships aimed at bolstering its competitive position. The urgency stems from the company’s desire to “recover performance,” suggesting a proactive approach to addressing the current challenges.
However, the possibility of closure looms large should NEG fail to secure a viable partner or buyer. This outcome would represent a significant blow to the local economy in Wigan, potentially resulting in job losses and impacting the supply chain for critical components in the green technology sector.
The situation underscores the pressures facing manufacturers in the UK, particularly those competing in a global market where cost-effectiveness is paramount. The impact of imported goods, coupled with fluctuating energy prices and supply chain disruptions, is clearly taking its toll.
The coming weeks will be crucial as NEG evaluates its options. Stakeholders will be keenly watching for any announcements regarding the future of the Wigan plant and the potential implications for the UK’s manufacturing landscape. The outcome will serve as a bellwether for the broader challenges facing businesses in the region as they navigate an increasingly competitive and volatile economic climate.
Source: Nippon Electric Glass (NEG) with additional information added by GlassBalkan
