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Gas price rises force brick-makers to extend festive break
By Christopher Hope and Ceri Radford (Filed: 21/12/2005)
The Telegraph


Almost two thirds of Britain's brick makers are taking longer-than-normal Christmas breaks in the first serious sign that the spiralling cost of wholesale gas is causing British industry to cut output.

The Brick Development Association warned yesterday that 60pc of the UK's brick makers are taking "extended shutdowns" and said the industry was now in a "major crisis" and warned that the high wholesale gas price as "almost unsustainable".

Brick-making is energy intensive, making it susceptible to the volatile gas price, which quadrupled to 170p a therm four weeks ago. Last night, the wholesale gas price closed down 1½ at 72¼p - more than twice the 31.45p level at the beginning of November.

Oliver Stephenson, the BDA's chairman, said: "This is a continuing crisis for all of the UK's energy intensive industries - brick, glass, chemicals and steel.

"Some sort of Government intervention is needed into the way the market has been operating. They have to look at the way that gas is traded. We have to buy it whatever the cost."

Yesterday Hanson, which is responsible for three out of every 10 bricks made in Britain, warned that it was stopping production at four major factories for the whole of January and wanted to push through a 7pc price rise.

Nick Swift, a spokesman, said: "We are trying to mitigate the cost base by suspending production. We're paying around 50pc more for our gas than this time last year and there is no sign of prices coming down."

Ibstock, which also has 30pc of the brick market in Britain, said it was considering an extended Christmas shutdown at some of its 24 plants. Wayne Sheppard, managing director, said: "There may be an extension in the planned shutdowns of some factories. I can't rule out there will be an extended Christmas shutdown."

Wienerberger, which has a 15pc UK share, said it had stopped making bricks at seven of its nine British plants throughout December. Wayne Richardson, company secretary, blamed the prolonged closure, the first in his 18-year career at the company, on the soaring gas price. It plans to open as normal in January, he said.

Baggeridge, which controls 9pc of the UK market has said it was implementing extended Christmas shutdowns at two factories, and warned that it would hit first-half profits.

Alexander Ward, Baggeridge's chairman, said: "Along with many of our competitors, we will be implementing extended Christmas shutdowns, at two factories. As a consequence, we believe that the first-half results will be well below the prior year."