The impact of Brexit on the UK plastics industry

Posted on 13 Dec 2018 by The Manufacturer

The UK plastics industry holds a strong position in the global market, consistently evolving with technology and innovation. However, Brexit is a huge challenge facing UK plastics, and it could spell disaster for both those working in and alongside the industry.

Brexit Flag Union Jack - Stock
The lack of clear understanding as to what the post- Brexit future may hold will increasingly have an impact on investment decision-making.

Our trade with North America includes £760m in exports and £990m in imports. However, this only covers 8% of our overall trade. An overwhelming 69% of our trade is solely within Europe, with £5.6bn in exports and £9bn in imports.

These statistics give us an insight into how important the plastics industry actually is for the UK. And looking forward, it is important for plastics manufacturers to be aware of this, as Brexit could have immediate effects on trade.

There are four main areas that need to be addressed by companies as we approach the Brexit date, which is currently set for 29 March 2019 at 11pm GMT.

The main areas are:

  1. Free access to the single market

As Europe is the most important trading partner in terms of plastic materials and products, companies need to invest time and resources in maintaining easy access. With plastics among the top ten exports, this is vital for the UK economy.

Some businesses have already taken steps to ensure their businesses are in the best position to mitigate what Brexit may bring. Duncan Geddes, Managing Director at Technical Foam Services, discusses the steps his company has taken:

“Having a strategy and planning ahead are key to navigating such a potentially damaging situation, and Technical Foam Services have done this by building relationships with suppliers from around the world in addition to our suppliers in the EU,” Geddes said.

“We are also dedicated to supporting environmental improvement across the industry, whatever happens. Going forward, it will be vital for other businesses in the British plastics industry to maintain their own dedication to sustainability, as well as working to mitigate the negative impacts on business that will come with our exit from the EU.”

  1. Access to skills

Currently the UK plastics industry is seeing a skills shortage and needs immediate assurance that existing EU workers can stay. This could potentially become difficult depending on the results of Brexit. A survey conducted by the British Plastics Federation found that 36% of EU nationals are concerned about their right to remain in the UK. This is something that the plastics industry will need to be aware of looking forward.

  1. Legislation issues

As the plastics industry in the UK is currently shaped by EU legislation, ensuring this parity still stands is essential to maintaining cost-effective access to the single market – this is called ‘regulatory equivalence’. Some areas that will need to be developed include the landfill directive, the waste framework directive, and the packaging & packaging waste directive.

  1. Overseas business development

As the UK looks to other options in terms of getting support, funding for overseas business development is key, alongside establishing incentives for reshoring. The result of successfully implementing both of these steps is that the UK should remain a leader in the plastics industry, but businesses will still need to be prepared for the rising costs of imported raw materials and plan ways to make savings elsewhere.

Some think that Brexit will provide the UK with a competitive edge and a global supply chain, while others predict that it will spell disaster. Regardless of the outcome, being prepared is how those working within the plastics industry can ensure they are putting their best foot forward.