"World" Economy Club: "Preserving Europe requires a form of protectionism"

The general manager of Saint-Gobain, Benoit Bazin, delivers a plea in favor of European industry, threatened by the energy crisis and its excessive naivety with regard to American and Chinese competition

"World" Economy Club: "Preserving Europe requires a form of protectionism"

The general manager of Saint-Gobain, Benoit Bazin, delivers a plea in favor of European industry, threatened by the energy crisis and its excessive naivety with regard to American and Chinese competition.

The year 2023 brings us closer to the asymptote. Since the summer of 2021, we have incurred €5 billion in additional costs related to rising raw material costs and rising energy prices. This increase will continue, but at a lower rate.

Yes, 2022 has been an excellent year for Saint-Gobain, despite this additional cost. First of all, this is the result of a strategic choice of positioning: we have voluntarily focused on the "projects of the century" rather than undergoing the climate and energy crises.

Then, we made profound changes to get out of globalization. The group has been reorganized by country so that raw material purchases are made locally and are not dependent on transport or supply. Today, less than 1% of our raw materials are Chinese. In total, our selling prices have increased by around 12% to 13%, which is much less than the increase in the price of energy.

Partly yes, but I think that this tariff shield could have been much more differentiated for greater social justice, between those who are able to pay for their energy at a high price and those who would have needed help on other essential products. This would also have made it possible to save money for investments, particularly in energy renovation. It is a factor of social justice.

The majority of our productions are local products, which do not travel. We have one hundred production sites in France and one hundred and twenty-five in North America, each manufacturing for its geographical area. It would not be interesting for us to add the cost of transport. However, there are obviously products that travel: raw materials. On this point, Europe is naive. It is in a competitive gap on energy, which costs five times less in the United States and four times less in China.

They are also countries with better visibility, which we lack in France, especially on "green" energy. We have carbon-free nuclear energy, but EDF does not know how to trace the hydroelectric or nuclear part of its electricity. We have invested in new plasterboard factories in Norway since the electricity there comes from hydroelectricity, which is "green" and which we can trace.

There is a need for visibility on the energy framework, and Europe has a lack of competitiveness on this point, as well as on the carbon tax. This makes no sense if it only concerns raw products such as steel, and not processed products such as automobiles, because that amounts to financing electric cars that come from China. There is also a subject of skills and innovation: urgent measures are to be taken in Europe. It is lagging behind compared to China or the United States, because everything is going more slowly.

The world is changing at high speed. If it takes five years to discuss the marginal modification of the American IRA, 10% to 30% of European industry will be gone. This is the whole difficulty in Europe: manufacturers have to prove for several years the damage caused to the industry by the importation of foreign products to obtain a reaction from the European Commission.

Yes, because this forced globalization does not only have advantages. Industry is a source of jobs, innovation, but also social justice. It is even the main social elevator in our country. If we lose it, we kill the aspiration of the middle class which balances democracy.

If we want to preserve Europe and democracy, we must preserve industry, which is its foundation in terms of employment, innovation and sovereignty. This necessarily involves a form of protectionism, because manufacturers must be in good health to cope with the gigantic investments that must meet decarbonization objectives.