Robin Penny managing director of Derbyshire-based lifting equipment manufacturer Penny Hydraulics Group says the prospect of a no-deal Brexit has led him to increase his stocks in preparation for border delays
When did you first notice that Brexit would have an impact on your business?
About a month ago when the negotiations got to the point where no deal looks to be a distinct possibility. I think that up until then everybody thought that there was going to be some sort of a deal and that there would at least be a two-year transition period, but it’s getting very close to March now and people are placing orders for things, quite a lot of which are on three-month lead times. It’s getting to the point where if there is going to be a hard Brexit we need to start overstocking.
How much trade do you do with Europe?
We only export about 15%, but when you look at all the components we use, virtually everything is imported whether it’s the steel or the plastic or the fittings, everything comes in from somewhere to start with. We do get a large number of items from the Far East, but I would say that 75% is from Europe or Eastern European, which is going to be affected by any border controls down at Dover and Calais.
What are you doing to prepare for Brexit?
The possibility of there being no deal will cause tremendous hold-ups at the borders. So we are planning to overstock. We are looking at renting extra warehouse space so that we can overstock just to keep our customers serviced. That will probably give us a couple of months grace, by which time hopefully something has happened and goods start to flow again. I can see there being a problem for a month or more down at our borders, where normally stuff comes through without any checks.
So you have had to make a considerable investment in space and extra stock?
Yes, that’s what we are doing now. We are also ringing our suppliers to ask what they are doing about it. We are going out to see a supplier in Italy in November to see how they are going to supply stuff to us and what their plan is. We are starting to get a plan together to mitigate the problems because I think now that whatever happens there will be some sort of disruption. Even if there is a two-year conversion point then all we are doing is pushing that back. This could just be a trial run for two years’ time, but at some point, there is going to be a problem.
What is the reaction from your European suppliers to Brexit?
They think that it’s our problem, so we’re going to firmly tell them that it is also their problem. If they can’t get stuff here, then we are not going to be buying from them. For stuff coming in from China, there are established routes. There is somewhere to put the containers while they go through customs. That supply route is sorted out, but for stuff coming in from Europe there is no infrastructure, there is nobody to check it, there is nowhere to park the vehicles.
What do you think that the Government should be doing to help SMEs like yourself through the Brexit process?
There is a lot of information on Government websites about what we should be doing, but none of it is very constructive. There needs to be somewhere to park lorries that are coming in from Europe and going to Europe and it’s just not going to be there. I think that businesses are just starting to realise that there is going to be one almighty cock up in March no matter what happens. I am losing any hope that they are going to sort it out and if they do buy two years, we are only putting it off and then there will be an almighty cock up in two years time.