BREXIT is continuing to create a lot of concern with many customers and we are receiving requests to advise about potential disruption of supplies, the effects of REACH, increasing costs due to import tariffs etc. expected after the 29th March 2019. It is very sad that we still have little insight about what is truly going to happen. There is still much speculation about having a ‘deal’ or ‘no deal’ situation or the stability of our government.
We are continuing to take the following view.
Potential delays in obtaining materials
We are asking our suppliers the same questions with very few clear responses because of the continued uncertainty. We are monitoring critical products to our business with a view of increasing our stock levels on materials where possible, however due to the vast number of products we supply this cannot be the case for every product. We are therefore creating a priority list to identify which products stock levels will be increased and this continues to be a work in progress.
An area which will be impossible for us to manage is where customers only buy one or two drums of a product during a year. This is very difficult for us to predict and in these cases, where these items are critical for production we are suggesting customers increase their own stock levels to cater for potential supply delays.
The position regarding REACH is still very unclear. There is a proposal that a simple registration system to transfer registrations for the UK to a UK body. Fortunately, at this stage very few of our products would be affected and we are watching this situation to determine any action that may be needed.
Effect of potential tariffs and surcharges
The chemical industry imports the vast majority of chemical materials directly or otherwise from Europe and therefore many products may have tariffs imposed. We currently have no insight regarding what level of tariffs may apply if any. For that reason, we are delaying any general price decisions until the middle of 2019 when we anticipate having a clearer view.