Can do nothing but watch the thousand dollars flow out to the electricity bill every day.
Food giants such as Nortura, Lerøy and Fatland are completely dependent on the family-owned company Permanor and business manager Hege Skogland Mokleiv. In the giant cold stores in Haugesund and Brumunddal, thousands of pallets of meat, fish, berries and bread are stored for the market.
The slogan “always -25⁰C in Haugesund” has been around since the family business started in 1999. It also means that the freezers always use electricity to keep temperatures low. In 2021, Permanor used 3.3 million kilowatt hours and paid NOK 3.5 million for electricity.
– The electricity bill is terribly high, and consumes 15 percent of our turnover. This means that we have nothing left after we have paid salaries to the employees and rent, says Mokleiv, who runs the family business together with her husband Dagfinn.
In comparison, the company paid NOK 1.2 million for the electricity in 2020. Turnover last year was NOK 23.5 million, which was slightly lower than expected due to the corona pandemic.
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– Need an assistance scheme
Mokleiv talks about a deadlocked situation: While larger industrial companies have good, long-term agreements with the electricity companies, Permanor buys the electricity for a spot price. Even if the company loses money every single day with the high electricity prices, they can not turn off the machines either. Then food and raw materials thaw for great values.
– We have long-term agreements with large food producers such as Nortura, Fatland and Lerøy. These extend over several years, and we have no opportunity to get better paid or renegotiate the agreements in the short term. In sum, it is impossible for us to make up for the effect of the increased electricity costs, and we just have to run a deficit, says Mokleiv.
Many players in many different sectors have suffered severely during the corona pandemic. The sky-high electricity prices throughout the autumn and winter have made the situation even worse for companies such as Permanor.
– The company does not receive any form of compensation or support for the extreme increase in electricity costs. Now is the time for the government to step in for small and medium-sized companies like us, which have a temporary problem, says Mokleiv.
The owners of the Skogland family have a strong financial backbone, and the 51-year-old feels confident that the family business will survive the crisis. However, Mokleiv emphasizes that not everyone is equally lucky.
– We will probably pass, but it is the owners who take the whole bend. 47 percent of all employees in private business in Norway work in such small and medium-sized companies. These need an assistance scheme that can keep them afloat until they can adjust operations to an increased cost level.
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Discontinues the corona support
In addition to the high electricity prices, many small and medium-sized companies got a new shot in the arm this week: On Wednesday, the government and SV announced that the compensation scheme for the business community discontinued after 28 February.
The closure was refuted by the Confederation of Norwegian Business and Industry (NHO), which believes that the compensation scheme should continue as long as the infection control measures exist.
Regional director Tone Grindland in NHO Rogaland understands that many small and medium-sized companies are confused during the day.
– I understand that there is an expectation among these companies that something must be done. Especially when the corona measures are stopped after February. It is a depressing situation for these companies now. The high electricity prices have a wide impact, whether you run a freezer, laundry or garden center, says Grindland.
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