Coatings Industry Warns of Serious Consequences of a No-Deal Brexit
COVENTRY, UK — The coatings industry is urging government to avoid a no-deal Brexit at all costs, given the significant ramifications for the sector, according to the British Coatings Federation (BCF), the trade association for paints, coatings, printing inks and wallcoverings manufacturers.
The industry relies heavily on the UK’s membership of the European Chemicals Agency (ECHA) in order to access chemicals, which has been thrown into disarray since the EU referendum. 60% of the sector’s raw materials come from the EU, and each chemical the industry uses will have to be registered in a separate UK REACH IT system, if there is no deal to maintain a relationship with ECHA. In addition, leaving with no deal is likely to have a significant impact on sterling, which will add to the cost of importing raw materials and more than counter the proposed removal of 6% tariffs from chemical imports from outside the EU.
The Chemical Industry Association estimates that a separate UK-only set of chemicals regulations will cost the chemical industry £500m, and this is bound to have a financial impact on downstream users like coatings, putting the UK at a disadvantage as an attractive manufacturing hub in the EU.
Tom Bowtell, Chief Executive of the BCF, said, “Many coatings and printing ink manufacturers from Europe, USA and Asia have plants in the UK to supply the EU market, and the future of these will be in jeopardy if we leave with no deal. Our members are preparing for a no-deal Brexit. With just over two weeks to go until the UK leaves the EU, businesses have already started implementing contingency planning, such as stockpiling raw materials, up-skilling staff and changing suppliers. Membership of the European Chemicals Agency is key to our members, in order for them to access raw materials. With the prospect of expensive duplicated chemical regulations, potential delays at the borders, and additional non-tariff barriers, our industry is bracing for extra costs and the potential of losing customers.”
For more information on the BCF and how Brexit will impact the industry, watch Bowtell explaining the repercussions here.