Production at Securon has increased due to the need to stockpile
Production at Securon has increased due to the need to stockpile © FT Montage/Charlie Bibby

William John has a warehouse packed with the bolts, springs and other components that go into the seat belts and harnesses his company has been making since the 1970s.

It is the most visible sign of the preparations Securon — a small family-owned UK company that manufactures its equipment for diggers, tractors and other off-road vehicles — has put in place in case of a no-deal Brexit.

“Until the end of January most of our European customers were laid back about Brexit,” said Mr John, director at Securon, from its base in Amersham, Buckinghamshire. Then, “they all suddenly panicked”.

Several customers in mainland Europe wanted to have six months’ worth of Securon products on the other side of the Channel in case of disruption at the border if the UK crashed out of the EU without an agreement on the originally scheduled Brexit date of March 29.

Securon responded by stockpiling components and ramping up production, and the extra sales helped the company report record first-quarter turnover of £3.9m.

Securon in Amersham. They are stockpiling components that they use to make seatbelts in case of a no deal Brexit. Picture shows a warehouse full of twice the normal amount of components.
Securon in Amersham has been stockpiling components in case of a no-deal Brexit © Charlie Bibby/FT

Securon is not alone. Across the UK, big as well as small manufacturers have increased output of their goods and stockpiled things that go into them because of the risk of a no-deal Brexit and delays at the border.

The manufacturers’ customers outside Britain were initially worried about a disorderly exit on March 29, and then on April 12, after EU leaders last month shifted Brexit to the later date because of the parliamentary deadlock over Theresa May’s withdrawal agreement.

Last week, EU leaders shifted the date a second time, to as late as October 31, and there still remains a risk of a no-deal Brexit because MPs have rejected the withdrawal agreement three times.

Britain’s mini manufacturing boom borne out of the uncertainty has been confirmed in official data and business surveys.

Manufacturing output in February was at its highest level since the financial crisis, according to figures published last Wednesday by the Office for National Statistics. Meanwhile, the IHS Markit’s PMI stockpiling sub-index for the UK reached its highest ever level last month for a member of the G7 club of leading industrialised countries.

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But there is a likely flipside to the boom: with UK manufacturers’ customers in mainland Europe having committed to larger than normal purchases in the first quarter of this year, they could well buy lower volumes through the rest of 2019.

Mr John conceded Securon may be facing a lull in orders at some point, although he said the company has “a reasonable amount of new business coming in from June”.

Securon in Amersham. They are stockpiling components that they use to make seatbelts in case of a no deal Brexit. Picture shows Director, William John.
William John: 'Until the end of January most of our European customers were laid back about Brexit. [Then] they all suddenly panicked' © Charlie Bibby/FT

As in the case of Securon, Robinson Brothers’ customers in mainland Europe asked it to increase production this year, and the extra sales helped lift the intermediate chemical maker’s first-quarter revenue £1m above forecast.

However, Adrian Hanrahan, managing director of the West Bromwich-based company, accepted that some of these sales will be lost in the second half of 2019 as customers run down their extra purchases. 

Anthony Towers, commercial director at Kiowa, a manufacturer of industrial hoses used in the agriculture and construction sectors, said he had also boosted production in response to European customers’ requests.

As a result, the value of the company’s inventory — a mixture of raw materials, components and finished products — has risen from £1.7m at the start of 2018 to £2.2m in February.

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Mr Towers is in the process of analysing why Kiowa, based in Sleaford, Lincolnshire, recorded an 18 per cent increase in order intake in February and March. “We are doing the analysis and trying to figure out is it temporary, or is it because of new business won and sustainable?” he said. 

Cornick and Morris, which makes plastic injection moulding products for sectors including automotive and construction, is one company that has not stockpiled.

Steve Cornick, director at the company in Malvern, Worcestershire, said customers urged him to hold extra inventory but he resisted because of concerns there would be a temporary period after Brexit when they would not require anything.

He has spent time managing individual customers’ demands. One Hungarian power tool maker placed an order with Cornick and Morris at the end of February for delivery in March of products that would last all the way to November. Mr Cornick persuaded the customer to spread the order out.

Several manufacturers expressed frustration at the parliamentary deadlock over Mrs May’s withdrawal agreement, and the fact that uncertainty over the form of Brexit could persist until October 31.

“You watch the pantomime in Westminster on television,” said Mr Hanrahan. “The unfortunate thing is we are living in the real world.”

One manager at a Welsh engineering company likened the Westminster impasse to the former TV game show Deal or No Deal hosted by Noel Edmonds. “It feels like a game show but it isn’t,” he said.

Mr John voiced concern at the amount of management time devoted to coping with Brexit and its changing deadlines, which distracted from efforts to grow the company over the long term.

“My frustration is you haven’t been able to move [the business forward] as much because you have to protect what you’ve got,” he said.

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