Trade - Fireworks company Weco reports very good sales year
Germany's only industrial fireworks manufacturer, Weco from North Rhine-Westphalia, is on the up again after the coronavirus crisis. The sales year has been "extraordinarily good" so far, sales manager Oliver Gerstmeier told dpa in Eitorf near Bonn. Demand from retailers has been very high.
Weco sells rockets, firecrackers and other fireworks to retailers, who offer them to consumers on the last three sales days of the year. Fireworks were banned on New Year's Eve 2020 and 2021 due to the coronavirus. As a result, Weco's annual turnover slumped from 137 million euros before coronavirus to 12 million in the 2021/22 financial year. More up-to-date figures have not yet been published.
According to Weco, the company had 460 employees five years ago, but now only 218. One factory in Saxony has been closed. In addition to the administrative headquarters and factory in Eitorf in North Rhine-Westphalia, the company also has a production facility in Kiel with a few dozen employees.
"Corona has really shaken us up," says company boss Thomas Schreiber. The sales bans have also hit the industry hard financially. "But we have remained steadfast, sorted ourselves out and realigned ourselves for the long term."
Even a year ago, there was a strong upturn. Normally, retailers return around 20 percent of goods purchased on commission to the manufacturer, but this figure was "close to zero", as Gerstmeier puts it, in the 2022 New Year's Eve business. People probably had a lot of catching up to do and therefore bought a lot of fireworks. Looking ahead to this year's New Year's Eve business, the company has a good feeling because: "We have a tailwind from last season."
Weco normally generates more than 90 percent of its turnover with New Year's Eve sales, with the rest coming from products for stage fireworks and year-round products such as sparklers and firecrackers. Sales abroad also play a role if fireworks are needed there because of a national holiday.
With regard to critics who criticize New Year's Eve fireworks for being harmful to the environment and unsustainable, Sales Manager Gerstmeier says that this year the company is doing away with plastic for the majority of packaging and contents and relying more heavily on cardboard.
Domestic production is now just a sideline for Weco, with 20 percent of the company's turnover coming from products it manufactures itself. The rest is imported goods, mainly from China. Competitors include the fireworks retailers Nico from Berlin and Comet from Bremerhaven. According to Weco, it is the only major German manufacturer of fireworks. However, there are still smaller manufacturers in Germany that produce their own fireworks.
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- Despite the challenges posed by the Coronavirus, the fireworks industry in North Rhine-Westphalia, specifically Weco, has shown resilience and recorded an "extraordinarily good" sales year.
- The demand for fireworks has been high in Germany, with retailers in NRW showing strong interest in Weco's products, such as rockets and firecrackers.
- The coronavirus crisis had a significant impact on Weco, leading to a substantial drop in annual turnover, from 137 million euros to 12 million in the 2021/22 financial year.
- To adapt to the changing market conditions, Weco has reduced its workforce from 460 to 218 employees and closed one of its factories in Saxony.
- Weco's focus on New Year's Eve sales, accounting for more than 90% of its turnover, was an advantage during the crisis, as people stocked up on fireworks due to the ban on New Year's Eve celebrations.
- To address environmental concerns related to fireworks, Weco is making efforts to minimize plastic use in its packaging and contents, relying more on sustainable alternatives like cardboard.
Source: www.stern.de
