Rainer Seele: "Wenn man sich selbst wirtschaftlich umbringt, hat man nichts erreicht"

Well, I actually have nothing good to report. We saw a recent survey in Germany conducted by the Chamber of Commerce, where several companies, 45% from energy-intensive industries alone, have announced that they will either reduce their production here or relocate abroad. Essentially, there are two reasons that are now ultimately harming competitiveness. First, an energy policy that is not very business-friendly. High energy prices have left significant damage on development. And second, and this is why GDP in Germany fell by 2.3% in July, is the high cost of services. That means high wage settlements are translating into high labor costs and thus further weakening the location.

I would clearly say that politics should take this signal from companies and industry very seriously. Because it is a signal that has been around for a while, not just recently. And the mood, at least in Germany, is that the economy feels it is not being heard enough by politicians.

Well, we have seen a decline in gas prices from the very high levels we came from, but we now have summer gas prices around $11 per MMBtu. In the US, for comparison, they are currently $1.9. So we have almost six times the price level here. And in the past, we actually saw significantly lower prices in summer. Now it's about five to six times higher than in previous years. That means we will go into winter with high prices. With the storage capacities, there is relatively expensive gas in there, so I don't see a major easing. For oil, it's the demand side that ultimately determines it. That means, in particular, the cyclical concerns. You saw how the oil price reacted due to recession fears in the US. And when we talk about climate policy, we really have to say we need a comprehensive concept. What I see now is that we always say what we don't want: we want less gas, we don't want coal, we don't want nuclear energy. But the overall concept in implementation, politics is now called upon to set the appropriate legal framework so that investors can make large investments and this market remains attractive.

In addition to the overall concept mentioned, I think we need a different prioritization in energy policy. In recent years, it has actually been equipped with only one goal: we want to do the energy transition and invest as much as possible in renewable energies so that we make this switch and also avoid creating dependencies. What must now be at the forefront is that we need competitive energy in Europe if we want to keep the economic location healthy. Because just saying what we don't want is not enough. We also have to see where we can import energy at competitive conditions so that the location remains attractive for investors and does not lose competitiveness. One must say, if you economically kill yourself with the measures, you achieve nothing because you won't be able to implement the measures. It needs the economy to build and implement the climate transition. We have seen that because the economy has unfortunately gone into recession, for example in Germany, we have seen that the economic engine is simply no longer strong enough to finance such a transformation in the energy sector.

Well, we clearly have a preference for renewable energies. They will have a share that will probably become the main share and will continue to expand. But we also have to think about which other CO2-neutral energies are available. Some countries in Europe and the rest of the world are now increasingly relying on nuclear power. We saw at COP28 that a tripling of nuclear energy worldwide is being targeted. But we also have a very popular topic that we have been discussing for a long time: what potential is there for Europe to build a hydrogen economy? Everyone is incredibly interested in it right now. I see in the Middle East that large investments are being made to ultimately provide environmentally friendly hydrogen. I also see large investments in the US. And one of the core markets for the sale of this hydrogen is indeed Europe. But we have to be clear that Europe is in competition with Asia there, and we will probably have to invest to make this technology a reality.

The topic has become much more complex because we are no longer just discussing domestic production in Europe, but also imports. First, we need to create the infrastructure. Many customers, for example from the cement or steel industry, say they are interested in hydrogen, but the hydrogen has to arrive at their factory so they can use it. That means we have to ensure that we build the infrastructure now. In this context, we need a much stronger commitment from politics. They are called upon to create the appropriate legal framework so that we have regulatory incentives for the use of such a system, and that pipelines are either converted or newly built to create a hydrogen network. The second thing we need is a long-term commitment from the customer side. I see that an incredible amount of capital is being made available to produce either blue or green hydrogen somewhere, then transport it here via ammonia. But when we move into the markets and ask who is actually ready to sign a contract with us, the ice becomes very thin. So if industry is not willing to commit in some form to the offtake of such quantities, at least medium or long term, then we will have difficulties being a frontrunner in this development in Europe. Then the long-term commitments will mainly be in Asia, where the large volumes are currently going.

Absolutely. One just has to look at how we set priorities if we get support from the state. What I see is that two-thirds of the budgets that are set up go into production. That will be green hydrogen with a high price tag. Then a larger part goes into infrastructure, and 5% that I see in these support measures are on the offtake side. So I think we need to support the industry and customers much more so that they can economically bear and take this step, and accordingly also get a share of these large budgets.

Well, we all naturally welcomed the interest rate turnaround, were full of hope, and have now realized that the effect of this small step by the European Central Bank is actually only minor. If you really make the interest rate turnaround, then a short-term impulse comes. In the risk capital area, the situation improved significantly, especially for financing startup companies. But that has now deteriorated again because a sustainable interest rate policy is not recognizable. We saw on Monday how nervously the markets reacted when no further interest rate steps came in America. Now we are talking about recession fears. Analysts give probabilities of its occurrence. And now it's always this core question: which fear prevails? Do we have more fear of inflation or more fear of a weak economy? For me, the signals are very clear, whether we are talking about the US or Europe. The cyclical question marks and challenges are significantly greater in today's times. However, I am not an expert on interest rate policy, I have to say. I can only wish, especially for startup companies, that further interest rate steps follow. Then fundraising will be significantly better and easier.

I am extraordinarily satisfied, no question. We have seen an incredibly great development at this company, and that has prompted us to become even more involved as investors. Elephant Skin is going through an incredible growth dynamic. Since last year when we spoke, I have seen Elephant Skin's entry into the American market, which has succeeded. They have already signed contracts with distributors. They have not only stabilized but further expanded their business in the Middle East and the US. We have seen an incredibly pleasing development in contract signings at Elephant Skin, so I see a very strong increase in revenue in the coming years for this company. But not only revenue, but also profitability has improved at Elephant Skin. So I believe we will also be able to record dividend capability in the short to medium term for this company. We have been able to further secure patent protection for the products at Elephant Skin. So I have no reason at all to find a complaint about why I am not satisfied with it. This is one of the nicest cases that an investor can present, being so convinced of this company because it has an excellent product that can ultimately be put on such a growth trajectory.

It is primarily further market penetration in new industry areas, from bakeries, hotels to airlines and so on. So they are increasingly entering this market. The market for single-use plastic, plastic gloves, is about $17 billion. So it's an incredibly large market where Elephant Skin now offers a truly revolutionary alternative. And the other thing, besides stronger market penetration, is of course additional globalization of the business. Especially the US comes with a market potential that is incredibly large.

Well, as positive as I am, I wish for an Elephant Skin 2, 3, 4, and 5. You just have to come to us and present a good business idea, then we are happy to get involved.