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16. Feb 2021 | Markets & Companies

BCF: UK coatings industry faces significant challenges

A recent survey of British Coatings Federation (BCF) members demonstrates how Brexit has impacted on the coatings sector in the form of new customs red-tape and higher costs since 1st January. 
BCF members fear the new trading relationship will have a significant impact on the UK manufacturing of paints, coatings and printing inks.
Image source: TeroVesalainen - Pixabay (symbol image).

The survey reported higher shipping costs, increased costs of imported raw materials, and new administration costs to complete customs paperwork, with 30% of companies estimating increases in total operating costs of 3-10%.

As a result, the BCF sees significant risks to the competitiveness of UK production and exports of its members, despite the industry investing in preparing for Brexit (86%) and experienced exporters outside the EU (75% of companies).

According to BCF, the new free trade agreement (FTA) will have a significant negative impact on UK exports of paints, coatings and printing inks.

Key findings:
 
    • Two thirds of companies fear losing EU export customers due to the additional cost and complexity of doing business
    • Seven out of ten say their opportunities to trade with the EU will decrease
    • Only 10% see opportunities from new trade deals with the rest of the world

What is positive to note, according to BCF, is that a quarter of companies thought the FTA might mean more chances to increase trade within the UK.

Significant impact on the UK manufacturing

BCF members also fear the new trading relationship will have a significant impact on the UK manufacturing of paints, coatings and printing inks. 82% of respondents have UK manufacturing, 35% were UK SMEs and 60% foreign owned business.

Key findings:
 
    • 50% believe the new FTA will reduce the competitiveness of their UK factories compared to EU competitors.
    • 25% were concerned there was a risk their company would reduce UK production and move it to the EU
    • Three quarters of those same companies (18.5% of total respondents) believed there was a risk their company could stop operations in the UK altogether
    • Seven out of ten believe the UK diverging from EU REACH in future will reduce their competitiveness
    • Almost 60% are worried about future effects of UK REACH on raw material prices and potential lack of availability of chemical substances

Recently, we also spoke to Tom Bowtell, CEO, and David Park, Public Affairs Manager, about UK REACH, the trade deal andthe problems ahead.

 

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