Last year, our focus was on whether or not the UK would leave Europe. Now the uncertainty is around how we will leave the EU. Just like any other business we will feel the effect of Brexit, but just how we feel it remains to be seen.

 

Import tax could potentially be the most significant difference we see and we’ll be closely monitoring any changes to import tax as the details of Brexit become clear. In addition, sourcing raw materials from abroad may become more expensive, therefore, we’re putting plans in place to ensure our supply options are as broad as possible.

  

Despite the uncertainties of Brexit, manufacturing in the UK is in a strong position and 72% of manufacturing businesses in the UK have confidence that conditions are good for growth.¹ Development of commercially valuable products with high export demand, an in-depth knowledge of changes in legislation, and continued development of core values can all fuel a company’s growth strategy forward.
 

We are implementing a three-pronged approach in the face of expected changes in 2019.

 

Firstly, we are establishing a new manufacturing presence in Europe, working with a partner to be our contract manufacturer on the continent. With production expected to commence early next year, the aim is to eliminate costs associated with transporting products in a post-Brexit Europe.  This was part of our long-term strategy anyway, but with the possibility of a ‘no-deal exit’ looming, this move will remove potential export issues. Having our products produced and delivered within the EU will place us in a strong position, strengthen our place in the European industry and avoid any penalties associated with export in the future.

 

We are also employing an ambitious plan to implement a European-focussed sales strategy from within, with the help of locally-based chemical specialists to introduce Airedale Chemical to key industry leaders within carefully targeted countries.

 

Finally, we are very much focussed within the procurement division of our business. We are actively expanding our supplier base of raw materials, particularly for peracetic acid (PAA). By increasing supply options of key raw materials we are increasing the security of supply.

 

We have established a European manufacturing facility to negate export issues and increase our brand and sales presence. Simultaneously, we’re growing our supply partners within the EU feel confident about navigating the waters from next year onwards. The current uncertainty surrounding Brexit presents challenging conditions, but this is actually a very exciting time for us.

 

There are also changes stemming from within the industry which have the potential for significant impact on chemical businesses.

 

For example, with the final phase of REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) implementation upon us, those who haven’t done so already should make preparations and develop contingency plans, as it covers all chemicals within the EU. All chemicals imported into the EU or European Economic Area need to be registered, tested and authorized by the European Chemicals Agency (ECHA), which is likely to affect businesses of any size in almost all industries. Although there are a few exceptions for some substances such as waste, radioactive materials, and those used in the interests of defense,  almost everything else is likely to be affected in some way by REACH regulations.

 

It is likely that REACH will remain an important and evolving issue for some time, and the key to maintaining a smooth-running operation will be two-way communication throughout the supply chain between upstream and downstream users.