Brexit seen threatening UK links in EU supply chain

May 13, 2018

Mandy Ridyard knew Brexit was going to be a challenge for her aviation components firm, but it was still a shock when she heard a French company bluntly ruling out British suppliers from an international bid for a contract in China. 

There was just too much uncertainty about Brexit to include British companies in the group, a representative of the firm told a meeting of business representatives and government officials from Britain and France in February.

“The elephant in the room was Brexit,” Ridyard said of the meeting, which was organised by the British embassy in Paris to spur more bilateral business but only served to increase her anxiety about Britain’s departure from the European Union.

“If companies are not currently looking to the UK for their products, then we will be losing out on a generation of strategic deals,” Ridyard said. “That business will be gone.”

One of the biggest concerns for manufacturers as Britain heads into crunch Brexit negotiations this year is over one of the building blocks of cross-border trade: a customs regime.

There are signs that many EU companies are holding back on using British firms in their supply chains – which can involve parts criss-crossing borders several times – because of what they still don’t know about tariffs, regulations and the potential for costly delays at the border.

Jeegar Kakkad, policy director at ADS, a British aerospace trade group, said big aviation firms were now asking British suppliers to warehouse a month’s worth of stock at their own expense, to offset the risk of Brexit border delays.

“That is going to be a significant challenge in particular for smaller companies,” he said.

Britain’s economy has slowed sharply since the Brexit vote in June 2016, but Ridyard’s firm, Produmax Ltd, is so far riding out the storm.

In its plant in Shipley, a historic manufacturing centre near the northern English city of Leeds once famous for its wool and cotton mills, workers using precision milling machines and lathes turn chunks of steel and aluminium into flight-critical parts used in the flaps of plane wings.

The company, which Ridyard and her husband Jeremy bought in 1997 and employs 71 people, will soon open a second site.

However, new work recently has been in one-off jobs that other suppliers could not fulfil, not long-term strategic contracts.

“There’s no point complaining about it,” said Ridyard, the company’s financial director. “We’re still investing. But we’re just a bit more hesitant than we were.” -Reuters

 
 

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