Brexit: The good, the bad and the ugly

David Caulfield

Sales and marketing director of BA Components explores the repercussions of Brexit and what it will mean for the industry

As the Kitchen & Bathroom industry powers on in what has been a turbulent 2017 so far, we at BA Components have marked this year by celebrating the Magnificent7, our all-inclusive collection of kitchen, bedroom and bathroom brands that will take us through Brexit and beyond. There is no doubt 2017 will be known in the history books for the triggering of Article 50 as we gather pace to head for the Brexit doors but what has this meant for BA Components and our industry?

I see only too well the current and future repercussions of the decision to leave. Like a Spaghetti Western coupled with mixed direction, Brexit has catapulted the UK into the European and global spotlight changing the way we as a country operate. Weak currency and the impact on foreign exchange has had a major impact, for us all, in terms of buying power from European raw material and finished goods suppliers. For BA Components, and many of our colleagues, the future purchase of the latest production equipment from Italy, Germany and across Europe has added financial pressures.

Securing trade deals

It is imperative our government is focused on negotiating and securing a deal that will enable both British and European businesses in all sectors to flourish, invest and innovate to continue with the production and free flow of trade. I imagine the original plan for government after calling the Referendum was to run the “Remain” side close enough to frighten the EU into bigger concessions but it backfired spectacularly on June 23rd with the result to leave and that’s why it’s taken time to start getting a game plan in place and trigger Article 50.

Kitchen and bathroom businesses will hope the UK government can secure the best possible deal on trade and market access, for a planned exit in 2019, with five years of trade negotiations, and a transitional phase to bridge the two. The challenge for us all is to consolidate and have a plan in place to survive that particular journey and continue business growth.

Adapting to change

Our sector is an especially resolute and diverse group. Like most companies, BA Components are concerned about exchange rate fluctuations, labour pressures and higher indirect taxation. But we are also taking a range of practical measures to prepare for this new transition. These include a cost-effective supply chain management, increased export business development outside of the EU, and new sources of financing for further factory investment and innovation. BA Components will continue to grow its horizons as we now export to 27 countries in Europe, Asia and America. But looking at the UK, specifically, our business has always enjoyed continued growth and success due to our ability to adapt to market trends and conditions.

Our HQ is in Northern Ireland where we have a unique situation due to us bordering the Republic of Ireland (EU member) and hence with Brexit now right on the border. The Prime Minister has said the government wants to maintain the Common Travel Area between the UK and the Republic of Ireland; however, there is uncertainty about how this can be maintained given the government’s aims on immigration control and ability to negotiate a new customs agreement with the EU. There are on-going consultations on the impact of Brexit taking place across the Republic of Ireland and Northern Ireland, so in the short term we carry on regardless of our goals.

Businesses in the kitchen and bathroom sector of the UK are rolling up their sleeves as they prepare for life outside the EU and are committed to making it a success. Leaving the EU will be a highly complex process, and all sectors of the economy are making their priorities clear to get it right. Talking to other industry professionals I’m getting the usual mixed messages, common across business at this time, but I trust the kitchen and bedroom sector have realised Brexit will demand a burst of innovation from both the private and public sectors if the UK is really going to reach new global markets.  

This renewed focus with new markets with its potential has BA Components engaged and open for new opportunities, all of which requires a sea change of creative thinking to implement this company goal. We will all continue to monitor the Brexit situation carefully and manage our own businesses accordingly. The last thing we need is an economic downturn.

We work and operate in a fantastic, resilient and innovative industry and whatever Brexit brings to the nation as a whole, remember our customers will still cook, sleep and brush their teeth. We need kitchens, bedrooms and bathrooms, and all we bring to ensure the comfort of our fellow citizens' lives. 

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