The politics of Brexit are one thing, and the openness to the World for the UK a cause for concern… but for the leaders of our UK manufacturing companies there is now a real opportunity – in the pure business-profit sense. Over the last decade (and in the face of increasing low-cost imports from Asia and Eastern Europe) many companies based in the UK have claimed the logo and title of ‘Made in Britain’ to project a high-quality image.
As this trend propagated competition, comment began to fly as to who was really manufacturing in the UK, and who was really using British skills, engineering and capability to add value. This compared with pretenders, who bought-in and sold-on with a bit of British assembly or packaging.
Well, now the genie is out of the bottle. The ex-Governor of the Bank of England, Mervyn King, was quoted this week as saying that if we were ever to rebalance the UK economy from being an importer to an exporter the new post-Brexit levels of the pound was an inevitability. So now real UK manufacturers have the world at their feet. If we are truly adding value in £, costs in goods have suddenly become much less expensive compared with € or $ based economies.
Even within the UK market, it is time for another look at our UK costs versus all those Chinese imports priced in $. They used to be cheap, but rising Chinese costs and the new $ /£ relationship will in many cases have levelled the playing field, especially when one considers $ based freight costs. The collective UK manufacturing base should be combining to re-look at the competitive equation – looking to our neighbours for newly competitive offerings.
We also need to look at the opportunity for disruption. Large companies with complex decision-making chains will struggle against those with the capability to implement pricing changes and promotional offers overnight. Corporations based in Europe or $ based economies will be forced to reassess their pricing in the UK market, creating the inflation we all predict, but also forcing buying decisions of procurement teams across the market. Procurement decisions bring opportunity for those with newly-competitive cost bases.
Now we’ll find out who the are the real UK manufacturers and who are pretenders!