The government is tackling the energy crisis with a meager support package that helps almost exclusively ordinary citizens. Industry must find a way to weather the storm on its own. When politicians allocate funds for industry, it is mainly to make the big polluters more sustainable. But the small, locally rooted factories are now collapsing. This is painfully evident in the “paper village” of Eerbeek, where the centuries-old Coldenhove went bankrupt last week, writes Menno Tamminga.

About the author: Menno Tamminga was an an economics editor at NRC and is a columnist for Wynia's Week.

The spike in the already high Dutch energy costs, caused by the disruption of oil and gas imports, has dealt a fatal blow to one of the oldest paper mills in the village in Gelderland (population 10,230). Coldenhove Paper Mill. Bankrupt. Three years ago, the De Hoop paper mill in Eerbeek closed. 185 employees lost their jobs

It’s like a race to the bottom with no winners

Coldenhove and De Hoop—they had an impressive future behind them. But a rich history doesn’t pay the energy bills.

They started out as paper mills: De Hoop in 1657 and Coldenhove in 1661. Over the course of three centuries, they managed to reinvent themselves time and again. New technology. New products. De Hoop was once the exclusive manufacturer of Philips’ packaging, until the company began producing it in-house. For many years, Coldenhove produced the blue paper used by the Dutch Tax and Customs Administration.

When you say Eerbeek, you’re talking about paper. The village is paper; you could see the factories everywhere, you used to be able to smell them, and the whole area buzzed with activity—from the transport companies to the men in overalls cycling to work.

Fun fact: The Coldenhove swimming pool, located on the edge of the forest in Eerbeek, is heated using waste heat from the nearby paper mill of the same name. Swimmers were told last week that as long as the receiver of the Coldenhove paper mill continues production, they won’t have to worry about getting cold.

Like Eerbeek, there were other places like that in the Netherlands. Towns and villages were inextricably linked to “their” industry. Eindhoven was (and still is, to some extent) Philips. Genemuiden: carpet. IJmuiden: steel.  

But for Eerbeek, the nickname "paper village" is slowly becoming a thing of the past.

It is estimated that the production, transportation, and trade of paper in Eerbeek provide employment for 2,500 people. Following Coldenhove’s bankruptcy, two paper companies continue to uphold the village’s reputation: Folding Boxboard (folding boxboard) and DS Smith (packaging board).

Pioneers

The story of paper in Eerbeek is a story of industrial pioneers and family businesses, of burned-down paper mills and bankruptcies.

Paper mills were the cradle of industrial activity in the eastern Netherlands. This was thanks to the clean water that flowed from the higher-lying Veluwe region through streams and springs to the towns and villages below. There, entrepreneurs built paper mills that grew into full-fledged factories. In Renkum, Heelsum, Wapenveld, Ugchelen, Loenen. And in Eerbeek.

When Omroep Gelderland compiled a list of the twenty oldest manufacturing companies in the province over ten years ago, the top five turned out to consist entirely of paper and packaging companies. The oldest was located in Loenen: Schut Paper. In Ugchelen was the banknote paper factory, which was once called Van Houtum en Palm (VHP). In 1990, the British paper manufacturer Arjowiggins bought the company. But Arjowiggins couldn’t keep it going, and now the French specialty paper manufacturer Oberthur Fiduciaire is the owner. Eerbeek has two names in the top five: the former Mayr-Melnhof and Coldenhove. I’ll come back to them later.

Paper production requires raw materials and capital. Paper is a cyclical product. When the economy slumps and consumer demand declines, paper mills are left with high fixed costs to keep their expensive machinery running. That is why, in recent decades, there has been a trend toward economies of scale in and around Eerbeek, led by well-capitalized foreign companies. Increased scale was intended to yield cost advantages. Companies from countries such as Finland also had better access to raw materials and some market power among end users.

Playball

Thanks to these economic forces, local companies found themselves caught up in a wave of foreign takeovers.

As a result, decisions about new investments are no longer made locally, but at foreign headquarters. This also means that employees and the local community may feel at the mercy of the interests of their foreign owners.

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