Impact of New Gas Price on the Ceramics Industry in Paraná: Possible Layoffs and Impacts on the State Economy.

Written by Corporativo

Published on 31/07/2024 at 15:21

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Compagas Proposes Tariff Restructuring of Gas in Paraná, Extinguishing the Ceramic Tariff and Threatening the Number of Jobs Generated by Local Ceramic Industries.

The new pricing premise for gas, directed at the ceramic industry in Paraná, will directly affect job stability and the state’s tax revenue.

According to Roca Brasil Cerâmica, the tariff modification suggested by Compagas, applicable from August 1st, threatens the maintenance of ceramic industrial activities in Paraná. This adjustment could further harm operations, particularly due to the increase in costs of natural gas. This tariff change may result in severe consequences for the regional economy.

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Impact of Tariff Restructuring

This analysis stems from the proposal of the Paraná Gas Company (Compagas), a private company that distributes gas in Paraná. The proposed measure eliminates the price table specific to the ceramic segment, treating it the same way as other industrial sectors. According to Sergio Wuaden, managing director of Roca Brasil Cerámica, this decision will result in layoffs and the consequent reduction of income for workers in Paraná. He emphasizes that ‘offering the same treatment for ceramic operations and completely different sectors will be a death blow to the viability of activities in Paraná‘.

Wuaden also highlights that the historically high prices charged by Compagas have generated many impasses in defining an efficient tariff policy for the Paraná industry.

High Costs and Competitiveness

In recent years, tariff values above the national average have already affected the competitiveness of the Paraná industry both in the local market and in exports, discouraging investments in technological upgrades and expansion of production capacity. However, by proposing the extinction of the ceramic tariff, currently under review by the Regulatory Agency for Delegated Public Services of Paraná (Agepar), Compagas ignores the history of negotiations and eliminates the chance to recover some of the competitiveness lost over the years.

For ceramic production, natural gas accounts for approximately 30% of the total cost, while for other sectors this percentage is much lower. If the tariff restructuring is approved by Agepar, Roca Brasil Cerámica and other industry players in Paraná will face an increase of about 7% in applied gas prices. Furthermore, the portion of the margin allocated to the gas distributor has increased by 22.3%. ‘Clearly, there is room to reduce this margin by up to 35%’, Wuaden assesses.

According to him, Compagas’s stance reveals a limited strategic vision that fails to recognize the importance of gas for the development of the state industry, resulting in the elimination of direct jobs and the economic disintegration of local communities that depend on this income.

Historical Difficulties

The historical relationship between Roca Brasil Cerámica and Compagas is marked by successive disagreements in recognizing the importance of the ceramic sector to the economy of Paraná. In the late 1990s, the conversion of the energy matrix of the Campo Largo ceramicists to natural gas was crucial to enable Compagas’s operations. However, over the years, these contributions were forgotten, just as the recent negotiations between the distributor and Roca Brasil Cerámica.

In 2021, when the company announced the expansion of the industrial park located in Campo Largo, Compagas agreed to expedite the benefits arising from the renewal of the concession contract, resulting in a tariff reduction to support the investments that strengthened the regional economy and state revenues. However, by suppressing the price allocated to ceramicists, this condition was eliminated. ‘We know that states like Bahia and Santa Catarina continue to offer these special conditions for local industries, while in Paraná we are at risk of losing these advantages and worsening the situation of our sector’, Wuaden analyzes.

Monopoly and Regulation

Wuaden also expresses concern about the growing monopoly in gas distribution by a few private companies. ‘This is an imminent risk that requires strong and effective regulation to control these companies’ appetite for excessive profit margins‘, he warns, adding that without proper policies, high tariffs will negatively impact industrial development in Brazil and job and income generation.

About Roca Brasil Cerámica

Roca Brasil Cerámica, which leads the Roca and Incepa tile brands, is part of the LAMOSA Group, a Mexican company with a global presence in the manufacturing and marketing of ceramic tiles and adhesives. After its acquisition in 2021, the company became part of a story of more than 130 years in the construction sector, with operations in 9 countries and 33 production centers in the Americas and Europe.

Innovation and Sustainability

The LAMOSA Group is a market leader and the second-largest manufacturer of ceramic tiles in the world, with an annual installed capacity of over 280 million square meters. Innovation, cutting-edge technology, and high quality are the pillars that guide Roca Brasil Cerámica, consolidating its position as one of the largest manufacturers of ceramic tiles in the world.

Constant investment in technology enables the company to offer a robust portfolio that follows the trends in architecture and construction, remaining fully compliant with technical standards. In 2016, Roca Brasil Cerámica became the first company in the Americas to acquire the Continuous Supercompactor+. In 2018, it launched the Superformats market with large-sized tiles, revolutionizing the ceramic industry and the architecture and construction market.

Environmental Responsibility

In 2019, the company was a pioneer in analyzing the life cycle of its products, monitoring the environmental impacts of its production. Among the improvements achieved between 2021 and 2022, it includes a 3% reduction in water consumption and a 5% reduction in energy consumption per square meter produced, the disposal of 95% of waste for reuse or recycling, and the substitution of petroleum coke with biomass, a renewable fuel.

These actions reflect Roca Brasil Cerámica’s commitment to sustainability, positioning it as a reference in the global ceramic sector.

Impact of New Gas Price on the Ceramics Industry in Paraná: Possible Layoffs and Impacts on the State Economy.

Compagas Proposes Tariff Restructuring of Gas in Paraná, Extinguishing the Ceramic Tariff and Threatening the Number of Jobs Generated by Local Ceramic Industries.

Impact of Tariff Restructuring

High Costs and Competitiveness

Historical Difficulties

Monopoly and Regulation

Innovation and Sustainability

Environmental Responsibility

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Impact of New Gas Price on the Ceramics Industry in Paraná: Possible Layoffs and Impacts on the State Economy.

Compagas Proposes Tariff Restructuring of Gas in Paraná, Extinguishing the Ceramic Tariff and Threatening the Number of Jobs Generated by Local Ceramic Industries.

Impact of Tariff Restructuring

High Costs and Competitiveness

Historical Difficulties

Monopoly and Regulation

Innovation and Sustainability

Environmental Responsibility

The Soviet Union spent 22 years drilling into the Earth’s crust and reached a depth of 12,262 meters — they found water where it was thought impossible, hydrogen bubbling from the rock, granite that is 2.7 billion years old, and temperatures of 180 degrees that melted the drill bits.

Ethiopia has banned gasoline and diesel cars, placed over a hundred silent electric buses on the streets of Addis Ababa, and now aims for half a million electric vehicles by 2030, all powered by Africa’s largest dam and a courage that few countries have shown.

Egypt wants to draw 10 million cubic meters of water from the Nile per day into the desert, irrigate a new agricultural frontier, and build a city where there is currently only sand.

Norway is drilling 27 kilometers of rock 392 meters below the bottom of a fjord to build the world’s largest and deepest underwater road tunnel — when completed, a 21-hour journey will be reduced to 10.

An astronaut spent 340 days in space while his twin brother stayed on Earth, and NASA found a “rejuvenating” effect, genes, microbiome, cognition, and immune system that revealed the biological cost of living outside the planet.

Chinese engineers begin filling a 217-meter dam at an altitude of 3,000 meters and prepare a 2,240 MW hydroelectric power plant to integrate hydropower, solar, and wind energy in the upper Jinsha.

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