The government is tackling the energy crisis with a meager relief 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 help large polluters become more sustainable. But 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 halt in 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 itself. For many years, Coldenhove produced the blue paper for the Tax Authority.

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 transportation companies to the men in overalls riding their bikes to work.

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

Like Eerbeek, there were other places in the Netherlands. Cities and towns were inextricably linked to “their” industry. Eindhoven was (and still is, to some extent) Philips. Genemuiden: carpets. 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 jobs 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 the paper industry in Eerbeek is a story of industrial pioneers and family-owned businesses, of burned-down paper mills and bankruptcies.

The paper mills were the cradle of industrial activity in the eastern Netherlands. This was made possible by 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 more than 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 acquired the company. But Arjowiggins couldn’t sustain the business, and now the French specialty paper manufacturer Oberthur Fiduciaire is the owner. Eerbeek appears twice 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 an expansion of scale in and around Eerbeek, led by well-capitalized foreign companies. Increasing 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.

Play Ball

Thanks to these economic forces, local companies found themselves caught up in a whirlwind 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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