Brexit is just on the horizon, and the fastener industry should ready themselves for the potential impact. Discover the ways you can start preparing for Brexit before the deal this October.
Although many fasteners and fixings are sold within the UK, a great number are traded in from the European Union, and further countries too. This means that, when Brexit hits, trade between fastener companies and their customers could become difficult.
We, at the Fastener Exhibition and Conference, want to ensure you’re completely prepared for what’s around the corner. That’s why, today, we’ll be discussing the Brexit strategies that a number of the biggest UK fastener companies have worked on.
Put into place before the proposed March 2019 Brexit date, these strategies still apply. Learn how you could be affected by Brexit, and how to prepare for Brexit, from fastener companies who’ve done so themselves.
1. Differentiate Between Short-Term and Long-Term Consequences: Tim Co. Wholesale Supplier
Tim Co. have made a point of differentiating between Brexit’s long-term and short-term impacts, to form a plan. So, what’s their verdict:
Short-Term Brexit Consequences
Exchange rates are one of the main concerns, which are extremely important within the fastener business. Indeed, with the fall of the pound, US transactions will become around 10 percent more expensive than previously. This could affect not just the companies, but their customers too, who could have to pay more for their fastening products if there’s a shortfall.
Long-Term Brexit Consequences
That said, it’s not all doom and gloom. Indeed, although economists have complained, Tim Co. believe that the long-term economic impact may be better than expected.
In fact, it could end up opening up more market for negotiating direct trade links. For example, EU’s Anti-Dumping tax on China, in relation to fixings and fasteners, can now be tailored to suit the UK’s needs, alone.
2. Order in Surplus Stocks: Hexstone
Hexstone is one of the UK’s largest fastener and fixings suppliers, acting as the umbrella brand behind five other fastening solution companies. With this in mind, the company would have a lot to lose if they didn’t put forward some safeguards against potential Brexit problems. Their action plan includes:
- Ordering in £3 million worth of extra stock, to be stored in their warehouse.
- Becoming an HMRC Authorised Economic Operator, which will grant them ‘fast track’ clearance when trading at ports. So, if any disruptions occur, their products will be prioritised above others.
By doing so, they’re ensuring that they can continue with business as planned, so their customers are protected.
3. Keep Track of Currency Concerns: Clevedon Fasteners Ltd. and Clevtec
Clevedon Fasteners Ltd. supply a huge range of fasteners and fixers to a wide variety of companies. In many cases, their suppliers are UK-based, however, their main suppliers outside the country are their wire distributors.
The main unknown that they’re concerned over is the exchange rate; with a no-deal Brexit, GBP value will significantly drop. Although they don’t feel they will be majorly affected by Brexit, as most of their suppliers are from the UK, they will be keeping an eye on these figures.
4. Track the Supply Chain to Limit Fallout: TR Fastenings
TR Fastenings are a global fastening company, which design, manufacture, and distribute fasteners across the world. They’ve taken Brexit extremely seriously, setting up a designated
Brexit Strategy Group, specifically for their plans.
Meeting regularly, they’ve decided to focus their attention on the immediate currency weakening that Brexit would bring. Attempting to limit the impact to their customers as much as they can, they’ve analysed their supply chain and customer data, back-to-front, to identify all potential risks. These identifiable risks include:
- Importing and exporting
- IT challenges
- Tariff changes
- Border delays
- The workforce
- Weakening currency
Some of their relevant solutions to these potential problems include:
- Avoid delays by increasing lead times
- Increase buffer stock held locally
- Alter distribution routes
5. Planning Makes Perfect: Hafren Security Fasteners
Hafren Security Fasteners are manufacturers of security and tamper-resistant fasteners, based in Wales. They’ve worked closely with the Welsh Government to minimise potential fallout. Their key focuses have come down to four main points:
- Supply Chain: communicating with suppliers and logistics to ensure they have prepared accordingly.
- Financial: Hafren have built up cash reserves to safeguard against the falling value of the pound.
- Customers: identifying sales geographically to reduce the risk of a breakdown in supply.
- Resources: adding extra space in their warehouse for additional stocks purchased before the Brexit cut-off.
Preparing for Brexit is Simple!
With so much uncertainty around the corner, Brexit may seem worrying. That said, as many of the companies above have stated, it’s possible to make preparations, just in case.
At the Fastener Exhibition and Conference, on 11th and 12th September at the NEC Birmingham, you’ll have the chance to engage in head-on discussions with fastener experts, over the course of two days! Don’t miss out on the opportunity to see how other companies are preparing, and get your FREE tickets, now.
We can’t wait to welcome you there!