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in the EU – the new Chemicals Strategy for Sustainability, Green Deal, ongoing reappraisal of substances etc – will have an impact on our members too.
TTJ: THE UK IS A NET EXPORTER OF PAINT – ARE EXPORTS STILL STRONG AND HAS THERE BEEN ANY CHANGE IN EXPORT DESTINATIONS? TB: At the moment exports are holding up. Our surveys found that just over four- fifths of exporters to the EU are planning to continue to export but are having to deal with extra costs and complexity. Only 7% said they were still exporting and had seen no real differences since Brexit. However, 4% had stopped exporting due to the new burdens and another 5% were reassessing the situation now they saw how the new trading relationship works. We have not picked up on any large- scale shift in terms of export destinations, although this may change if and when Free Trade Agreements with other countries come into force. Having said that, we have seen a change in behaviour in terms of the UK being used as a distribution centre. The new Rules of Origin have impacted on the UK being used as an EU-UK-Ireland distribution point, and the same with Non-EU to UK to EU movements. Many companies are now shipping to the Republic of Ireland direct from Europe, for instance.
TTJ: HAVE THERE BEEN ANY SUPPLY CHALLENGES – INITIALLY DUE TO BREXIT BUT ALSO DUE TO COVID? TB: There is an ongoing raw materials shortage across the globe, which is hitting our members hard. Access to pigments, resins, solvents, and some polymers are in particular short supply. There are various reasons for this, ranging from force majeures (fires at factories, extreme weather events etc) to global logistical problems, and from Covid cases hitting production, to economies rebounding from Covid shutdowns creating surges in demand, to a whole new industry around PPE and hand sanitiser production competing for solvents etc.
Brexit doesn’t seem to be a driver of the raw material shortages in the UK – it is a genuine global problem – but it perhaps exacerbates certain situations, such as making a similarly multi-national shortage of HGV drivers worse, or maybe making the UK a less attractive proposition for EU companies to sell raw materials in short supply because of extra customs costs.
TTJ: ARE COMPANIES ABLE TO BUILD THE INCREASING COST OF RAW MATERIALS INTO THEIR SELLING PRICES? TB: We know that raw material costs account for half of all costs to the industry and
so availability issues and associated cost increases will have a significant impact to our members’ companies.
An information note we published in November estimates that members will have seen overall raw material price increases of between 15%-35% in Q3 2021. However, some raw materials have seen prices rise significantly above that, into three figure percentages: solvents are a prime example. Members have generally tried to absorb these increases as best as they can, but we have now reached the stage where most, if not all, will have had to have passed on at least some of the inflationary pressure to customers.
TTJ: THE BCF IS COMMITTING TO THE NET ZERO BY 2050 TARGET – HOW IS THE INDUSTRY IS GOING TO ACHIEVE THAT? TB: The UK coatings sector wants to be proactive in making itself more sustainable and the BCF board pledged in October 2021 that the coatings sector would meet Net Zero commitments by 2050.
BCF is now in the process of drawing up detailed baseline data and future KPIs in roadmap documents to be published in 2022 for each of our sub-sector member groups: decorative paint; industrial and powder coatings; printing inks; and wallcoverings. Each group will need a different set of priorities and targets as their manufacturing processes are different. Incidentally, our sector has achieved a lot already in the way of improved environmental performance over recent
years. So, for instance, in 2020 only 6% of all coatings and ink production waste was sent to landfill compared to 21% in 2010, and 75% in 1996; and 2020 energy use per tonne of coatings and ink production (165kWh) is only a quarter of 1996 levels (646kWh) and has halved since 2010 (317kWh). We highlight these facts not to rest on our laurels: quite the opposite. By looking back at what we have achieved it is a reminder that we can make progress despite the size of the obstacles ahead. And we should remember that as we confront the huge challenge of meeting Net Zero by 2050. We will publicly share details of our progress through BCF’s new #SustainableCoatings campaign. The campaign will be the travelogue of our industry’s sustainability journey, explaining over the coming months and years our starting point, our destination, and the experiences and issues we encounter along our path.
TTJ: HOW DO YOU SUM UP 2021 AND WHAT DO YOU PREDICT FOR 2022? TB: 2021 was one of the most challenging years our members have ever had to face: Brexit, Covid, and raw materials shortages all hitting together to create a perfect storm. 2022 will continue to pose problems but our members have proven they are nothing if not resilient and BCF will continue to provide regulatory support and guidance, as well as proactive lobbying, to help them add value to their own operations and navigate their way through the months ahead. ■
Above: Just over four-fifths of exporters to the EU are planning to continue to export PHOTO: SHUTTERSTOCK
www.ttjonline.com | January/February 2022 | TTJ
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