Burning issue
Brexit survival guide for manufacturers
Since June 23rd, 2016, Brexit has been at the forefront of most manufacturers’ minds with a concern about how it will impact business. Allison Howgate, finance director for Mansfield Pollard – the Bradford-based manufacturer of energy efficient ventilation and sound management equipment – shares what effect she thinks the process will have, and how Mansfield Pollard is planning for the forthcoming changes
How do you expect the Brexit process to impact your business? In a wider sense, we are obviously concerned about the high levels of uncertainty which currently exist. It’s effect on organisation’s willingness to invest, and the ramifications, are concerning for anyone operating in project driven environments. From an operational perspective, we have been examining several areas of possible impact. Firstly, the opportunity to strengthen our export business and capitalise on the weaker sterling position. Additionally, in order to protect our cost base from this currency deterioration, a substantive review of our procurement chain has taken place. Whilst the agreement of future trading deals are hoped to be successful, we have also considered the impact the possible imposition of quotas and tariffs may have, given our proposed exit from the customs union. If we can capitalise on the opportunities for additional or improved export markets, control our cost base and continue to drive innovative solutions, we are optimistic. We are hopeful that a willingness to embrace the changes that will inevitably ensue will place us in as strong a position as possible to capitalise on what is undeniably going to be a period of great challenge and of immense change.
Have you changed your business strategy as a result of Brexit? Brexit has most definitely led to changes in our strategic approach. An increased focus on growth in our export market would otherwise have taken place in a different time frame. We are also cognisant of the potential boost to
www.heatingandventilating.net Allison Howgate, Mansfield Pollard finance director
the UK’s internal markets, and how we may best capitalise on this opportunity, as customers try to limit their exposure to the weak pound and source components and products from within the UK. Additionally, whilst we are not specifically reliant
on EU sourced labour, there is an expectation that labour costs may be driven up as the possible impact of losing free movement of EU labour, and therefore cheaper labour rates, takes hold. Being cognisant of this potential change in our cost base, and maintaining the pace of change to a multi- skilled flexible workforce, is imperative. We have also felt it prudent to examine our
market place and active industry sectors, to ascertain any potential loss of access rights to certain opportunities once we have lost our EU member status. Whilst we anticipate the underlying spirit of any new legislation to remain the same as that previously enacted under EU directives, we will be considering the changes that may occur as new statutory instruments are driven by nationally derived sovereign interests, including the possible impact on internationally recognised standard of quality and technical compliance. We have also felt it judicious to examine existing long-term contracts and framework agreements, to better understand if any rights or obligations in those contracts might be subject to change once we lose our EU member status.
Will you be sourcing more components from the UK rather than EU countries? Yes, it is an area we are currently focusing on and will continue to do so, at a level of detail that we might otherwise not have undertaken within this time frame. Understanding our immediate supplier base and in turn their exposure to raw material prices in light of Sterling’s weakening position, is paramount to keeping our cost base under control and maintaining our ability to be competitive in the market place
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