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Saturday, February 4, 2023

Turn of the year: Fireworks company Weco exceeds expectations

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Two New Year’s Eves weren’t allowed to be banged on, but at the turn of the year 22/23 it got loud again. For a fireworks company that was hit hard by the Corona break, this is cause for celebration.

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The fireworks manufacturer Weco sees itself on the upswing again after a corona-related sales ban and a rigid austerity plan including a plant closure. “Catch-up effects in parts of the population have meant that we have an extraordinarily good sales year in Germany,” said a spokesman for Germany’s largest fireworks company in Eitorf, east of Bonn.

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With a view to the past New Year’s Eve business, he added: “We would have been happy if we at least reached the pre-crisis level – but according to previous figures we have clearly exceeded it.”

Longing for fireworks

In 2020 and 2021, the sale of rockets and firecrackers in Germany was banned due to the corona pandemic, and the company’s business collapsed. Obviously, many people had a great longing for fireworks and are now buying more than before the pandemic, the spokesman said.

In the 2019/20 financial year (until the end of April), Weco still had sales of around 105 million euros, a year later it was only 16 million euros (minus 84 percent). The loss increased tenfold to around 8 million euros. No figures have yet been published for the following financial year – but it must have been just as bad. Weco closed one of the three plants during the Corona crisis, and the number of employees at the company fell by around 40 percent to currently only 204. Two thirds of the goods have so far been imported from China, and Weco produces a third itself in Germany.

The company does not yet have final figures for New Year’s Eve business, as it takes back unsold products from supermarkets or discounters. It will take a while until this is completed and booked accordingly. On the basis of the figures available so far, however, one can say that the German New Year’s Eve business is significantly higher than planned, said the company spokesman.

There will be price increases

Weco is active in a total of ten European countries, Germany is by far the most important market. “It’s good to see that parts of the German population continue to buy fireworks and don’t question it.” Riots and attacks on emergency services recently on New Year’s Eve have triggered a debate about the consequences, such as a ban on firecrackers.

Anyone who wants to fire up firecrackers or ignite rockets next New Year’s Eve will in all likelihood have to dig a little deeper into their pockets. The Weco spokesman said that price increases of 30 to 70 percent were necessary due to the sharp rise in costs. Fireworks consist of 90 percent paper, cardboard and wood – “the prices for these raw materials have gone through the roof”. Chemicals have also become more expensive.

In addition, significantly increased freight costs put the company under pressure. Transport in a standard container cost around $8,000 before 2019, but the price has since risen to $28,000. In the meantime, around $ 18,000 would be due. “Therefore we see ourselves forced to significant price increases.”

Embarrassing Crackers

Weco is currently negotiating with trading partners – i.e. wholesalers as well as supermarket and discounter chains – about the prices for the New Year’s Eve business 2023/24. The negotiations have not yet been completed, but there will have to be significant price increases, said the company spokesman. He cannot say how much the price for the end consumer will rise – that is up to the dealers. The “Lebensmittel Zeitung” had previously reported on the planned price increase.

Crackers from Weco recently caused a stir: The musician Jan Delay was outraged on Twitter about misogynistic jokes on the notes that were in the crackers. The company then apologized and pointed out that these were products from the old stock: Crackers from more recent production batches no longer contained such sayings.

Source: Stern

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