Last spring the UK experienced a growth in reshoring manufacturing, following the industry trend in North America. 18 months later, how has this evolved and what will be the impact of Brexit?
Family-run, UK plastic injection moulding company Pentagon Plastics have continued to experience a resurgence in reshoring. Over the last year they have welcomed an increase in enquiries from customers that have previously used overseas suppliers.
Paul Edwards, Managing Director, highlights that companies looking to bring their manufacturing back to the UK have faced challenges overseas. For example, their prospects were often faced with the issue of having inserts that don’t fit UK bolster sets and problems with not owning the complete tool. Such complexity with overseas tooling is putting UK manufacturing back on the map and it’s seen as a merit to ‘keep it local’.
“We’ve discussed such issues with a UK electronics company. They originally chose an overseas manufacturer due to price and lead time, despite language barriers, inflexibility and late delivery to the approval stage.
After a difficult project, approved by the Financial Director against the recommendation of the chief engineer, they have taken a company decision to manufacture all future tools in the UK. This puts another feather in the cap of UK manufacturing.”
Further growth with Brexit?
As we enter 2017 and the prospect of leaving the EU, it’s difficult to call the impact it will have on reshoring. At present, Bangladesh and Pakistan are tipped to become manufacturing forces by the BMI as Far East prices are rising, yet we may see further growth in UK reshoring.
The reason for this is two-fold; the landscape is changing and there is an understanding that customers want more control over the manufacturing process and want to see products transform from a CAD design to a real functioning part first hand. This means customers need to be within an appropriate travelling distance. Whilst travel always improves, language barriers and cultural differences still exist and can draw customers back to the UK when combined with a comprehensive service, modern equipment and skilled staff.
Secondly, if the UK can gain free access to the single market it can only be a good thing. The EU is the UK’s single most important trading partner for plastic materials and products, and plastics are one of the UK’s top ten exports as reported by the BPF. The UK is however reliant on imports: for example in 2015 £1.8bn of raw materials were exported to the EU and £3.8bn imported.
An area of concern in the manufacturing sector is the severe skills shortage in the UK and it is imperative that existing EU workers remain in the plastics sector. The UK needs to maintain access to international skills in the future, whilst looking inward at developing home grown staff. This can be achieved through awareness in schools of the opportunities in manufacturing and investment in training existing staff.
If the UK uses Brexit to help develop businesses and invest to support the plastics industry through grants and match funding initiatives, it will allow UK manufacturers to become more competitive on price and lead time, facilitating reshoring opportunities. The Far East and China in particular are going through change and we’re in the position to capitalise. To do this we need to sell our services to those placing new work and most importantly, deliver on our promises.
Plastics companies in the UK are working hard to look at investment into plant and equipment, with recycling also high on the agenda. It is essential to be lean (streamlined), competitive and provide a high level of support to customers, as well as manufacturing high quality repeatable production to the markets.
Focus on quality
Paul Edwards adds, “Although price obviously plays a part in being competitive in the UK market, service is just as, if not more important, giving customers confidence in your ability to supply, be responsive and visible in all key elements.
We get very positive feedback when we welcome customers into our factory allowing them to see all areas of our business where their products are manufactured, also enabling them to meet the team who will be working on their projects. We look forward to also showing customers around our new tooling acquisition, Phoenix Engineering, adjacent to our current site.
Talking the talk is important but we also have to back it up and achieve the promises we make. Our facilities need to be clean and the work flow fluid through the manufacturing process. In essence, transparency and honesty are key as well as the investment in skills and equipment.”
The future may be bright for UK manufacturing and reshoring, as long as the appropriate investment is made available to companies to ensure their skillsets and assets continue to be competitive and grow in a global sense.