The coatings industry could suffer severe disruption, a loss of millions of pounds and a drain on investment with less than three months to go before Brexit, warns the British Coatings Federation, the trade association for paints, coatings, printing inks and wallcoverings manufacturers.
The £4bln “just-in-time” industry, which has more than half of its suppliers based in the EU, has been forced to activate “no deal” contingency planning following the controversial deal secured by the Prime Minister.
“No deal” planning for the industry consists of stockpiling key raw materials and finished goods, hiring more warehouse space and setting up legal entities in the EU. BCF members are also preparing to grapple with different sets of chemicals regulations, and face tariffs of 6.4% on both raw materials, half of which are sourced in the EU, and on finished products, costing the industry an estimated £150m. The impact of tariffs could lead to the loss of some of the £1bln UK exports of paints, coatings and printing inks, making them significantly less competitive to customers in the EU.
The BCF cautions that delays at the border of even hours will send ripple effects through the UK manufacturing industry- for example, a delay of one hour could cost the coatings manufacturer tens of thousands a day in penalties to many major automotive and OEM customers.
The BCF’s Head of Public Affairs and Policy, Ellen Daniels, who highlighted the above to the Environmental Audit Committee’s inquiry into Chemicals Regulation after the UK has left the EU, said: “Our members are already planning for “no deal” Brexit, which will result in a huge loss for our industry and UK GDP as a whole. Being a just-in-time industry with huge amounts of foreign direct investment, we need to ensure that the UK is still an attractive place for manufacturing. 98% of BCF members have some form of trade with the EU, with the top seven export destinations for coatings being in the EU, so it’s vital we maintain frictionless, tariff-free trade and have access to the EU’s chemical regulatory framework, by staying part of the European Chemicals Agency, which is impossible in a no deal situation”
“Whilst political point scoring is going on, real businesses are making decisions that will impact the future of the coatings industry in the UK and the contribution of the sector to jobs and the UK economy. Avoiding “no deal” is vital to the survival of manufacturing in this country.”