The United Kingdom plastics industry will survive the ‘Brexit' vote, but market volatility is likely to hit raw material prices in the short term.
That was the message from Mike Bowell, managing director of polymer distributor Plastribution, as the country woke up to the news that the UK had voted to leave the European Union – and the announcement by David Cameron that he would resign in the autumn.
“The industry will survive,” Boswell said. “We will be more competitive in the value-added arena, although raw material costs will likely rise as sterling falls against other currencies.”
Boswell said sterling, currently being hammered by the markets, had been here before: “It was probably overvalued before the crash of 2008, but post-crash industry boomed.”
The former president of the British Plastics Federation said there could be implications for investment on the back of the ‘Leave' vote, a view echoed by Mike Matthews, managing director of automotive supplier Nifco UK.
Commenting that Europe would remain the firm's largest market, Matthews said: “We have to continue making superior, high-quality products in this country. That is essential.
“Investment decisions will be crucial in the months to come. As an industry we need to show that we are creative and innovate, as we did before.”
Matthews expressed concerns at the possibility of rising logistics costs, and noted the fall of sterling against the US dollar, since his company imported a lot of equipment priced in the latter currency.
“If it falls significantly we will become uncompetitive,” he said.
Meanwhile, Philip Law, director general of the British Plastics Federation (BPF), said the ramifications of the vote were currently not known or understood.
“However the BPF will continue working with government, members and other stakeholders to make sure the interests of the U.K. plastics industry are protected and developed.
“We will also be working closely with members to help them interpret the impact these changes will have on their business.”