Who knew what a mess Brexit and the negotiations into our exit would be when Great Britain chose to divorce the European Union over three years ago? As the media warns of impending doom and the clock counts down ever closer to 31 October – when we’re set to leave the EU with or without a deal, one local company is confident in their preparations for whatever comes after the Brexit deadline, Derbyshire manufacturer HL Plastics.
No Deal? What’s the big deal?
The first issue we have to address is what exactly is a ‘no deal’ Brexit? Whilst we’ve heard the term as part of scaremongering tactics over the last three years – they don’t tell you just what that means.
In general terms, a ‘no deal’ scenario sees Great Britain severing all ties with the EU without agreements in place to handle trade, tariffs, customs and freedom of movement. These each impact industries differently and for HL Plastics the pressure comes from finished goods and raw materials which are sourced from outside the UK. Without agreements in place, those companies who’ve not planned for probable delays and penalties will be stuck playing catch up – and risk not only the jobs of their employees because of delays and disruptions but also have a customer service nightmare on their hands.
Hope for the best, prepare for the worst…
Brexit’s impact – whether on manufacturing companies, supermarkets or pharmaceuticals begins at top of their supply chain – where they get their products from.
As no-one knows exactly what will happen on 31 October when we leave the EU, Group Managing Director for HL Plastics Ltd explains how the company has prepared for the eventuality of Brexit, and what other manufacturers in the East Midlands can do to minimise the impacts of a ‘no-deal’ scenario:
“HL Plastics’ Senior Management team began planning for Brexit as soon as the results from the Referendum were announced in 2016.
“Our business imports many of our raw materials from outside the UK – so, we recognised Brexit as a business risk very early on. Since then, we’ve been quietly making plans so disruption would be as minimal as possible when Brexit does finally happen.”
A ‘no –deal’ scenario essentially means an immediate exit from the Customs Union – putting a full stop on all goods coming and going between the UK and European States. That resulting action will culminate in severe tailbacks at ports and border crossings, goods piling up and additional checks on goods before they are allowed to enter the country. There is something that businesses can do to alleviate this eventuality, Martin explains:
“The Customs Union we’re in currently allows the free movement of goods between the UK and EU member states, without it exporting and importing could be significantly longer. To prepare for this, we helped prepare our suppliers for Brexit.
“Inevitably it was about preparing for the worst and hoping for the best. It began with meeting at the Port Authority in Antwerp with Customs, government officials and experts.
“To alleviate any disruption for our suppliers who receive their raw materials from the EU and for suppliers based in the EU, we worked with everyone in our entire supply chain to help them attain Authorised Economic Operator (AEO) status. This status allows their goods to be fast-tracked through customs, essentially arriving at their final destination all the quicker.
“Critically, we’ve invested an additional £2 million of working capital to ensure we have sufficient stocks of raw materials and finished goods to allow for initial delays at the end of October. This is a substantial investment, and one which our parent company Quanex has been happy to provide in order to ensure our service levels remain the best in the market.
“This is all in line with Liniar’s overall philosophy of ‘doing the right thing’… at the end of the day, ensuring the continuity of the supply chain affects more than just Liniar employees and their families. Our ability to deliver on time, in full, affects the families of hundreds if not thousands of workers – and being as prepared as possible is the responsible thing to do.”
“We’d also encourage everyone in the supply chain to build their own stocks of critical components as much as they can before the leave deadline – hope is not a strategy, and we’d rather be over-prepared than suffer potential disruption.
“Whilst the team at HLP has prepared for every eventuality within our business, like most manufacturers we rely on a complex and robust supply chain. It’s up to everyone in the process to deliver on their Brexit promises.”
With just a handful of weeks remaining, it won’t be long until we find out what the future of UK business looks like post-Brexit.