Companies in the UK waste and recycling sector have been putting in place contingencies to protect themselves against any post- Brexit impacts related to the obtaining of parts for machinery and equipment manufactured in Europe.
One anaerobic digestion operator told MRW it had fully audited its technology provider’s spare parts help in the UK, and had put in place a short-term increase in the number of stock items of its critical parts.
Kent-based waste management firm LKM Recycling said it was “increasingly looking to UK suppliers at the moment”. It has recently invested in equipment by Northern Ireland-based Kiverco, giving it more peace of mind about servicing and parts.
Simon Baxter, LKM Recycling marketing manager, said: “One of our other new machines, a Lefort Amazone 1250 shear, was installed just before Christmas but had been on order for a number of months. We are hoping that spare parts will not be an issue, since the firm has UK offices, but it will obviously depend on whether it holds them in the UK or they need to come across from Belgium.”
LKM has been working with the Dover Chamber of Commerce in planning scenarios around a no-deal Brexit.
Baxter added: “We are holding off from further investments until there is a bit more certainty in the economy. The challenge, as ever, is that if a piece of equipment is specialist and only made in, say, Austria, we will have to think twice about investing if the cost is prohibitive or there is a large tariff on parts.”
Phil Gudgeon, managing director of Luton-based waste management firm Cawleys, explained the that the business has put in place a plan to ensure there is no disruption to its operations.
“With regards to our MRF facility, it is the case that much of the equipment was originally manufactured within the EU. Cawleys has put in place a recovery plan that we are confident will go a long way to mitigate the possibility that spare parts might not be as easy to source from Europe in the event of a no deal,” he said.
“We are investing a seven-figure sum to increase the range and volume of critical parts we hold in the UK, so that our clients get what they need.”
Marcus Brew, Untha
“This has been done by sourcing equivalent supplies of items such as bearings and electric motors from UK manufacturers. It has been more difficult to source bespoke parts within the UK, but we have prepared for this by identifying and ordering double stock of the parts that we replace most often. As such we don’t envisage any major disruption within the MRF.”
Gudgeon added that Cawleys had also pre-ordered wheelie bins manufactured in Germany and Spain, which will arrive in the UK before the end of March.
He said: “The real difficulty has been not knowing the effect Brexit is going to have. With this uncertainty, it has been challenging to plan for every eventuality. But we are confident that we’ve allowed ourselves plenty of breathing space with minimum risk to the business until normal passage of goods can resume.”
Blue Group, a specialist provider of materials processing equipment for the sector, has issued a policy statement on Brexit, reassuring its customers that it is “fully prepared” but warning that its prices are subject to review from 29 March.
The statement said: “Having made suitable preparations with all our suppliers, we are confident we will see no interruption of supply of equipment or spare parts post 29 March 2019.
“However, we must also recognise the current unclarity at a national and governmental level with regards to the possible introduction of new import tariffs and/ or levies post-Brexit, as well as possible adverse currency fluctuations caused by the same.
“As a consequence, Blue Group and its associated companies would like to make it clear that our current pricing policies will be subject to review post-29 March.
“In addition, and in the interim period, all quotations issued where delivery is quoted after 29 March 2019, will be offered excluding any and all import taxes, duties or levies that may be required post-Brexit, and all sterling prices based around a fair exchange rate backstop.
“In the event that the exchange rate falls below our backstop point, then we reserve the right to reprice and requote accordingly.”
Marcus Brew, managing director of shredding technology provider Untha UK, said the business has been monitoring Brexit developments “very acutely”.
“We have made plans to offset the worst possible outcome – a no-deal – in the hope of minimising disruption to our colleagues, existing clients and potential new customers, should that happen.”
This includes increasing its UK stockholding of critical parts and continuing to upskill its UK team as part of Untha’s global training academy to ensure there are no changes to the level of service offered to customers.
As the company’s headquarters are based in Austria, Brew explained: “We are investing a seven-figure sum to increase the range and volume of critical parts we hold in the UK, so that our clients get what they need from Untha, when they need it.”
On pricing of its shredders and customer support packages, he said: “All indicators are pointing to a large drop in the pound should we end up with no deal. This will inevitably have an impact on the price of all goods – it’s a sad economic eventuality of a weakened currency rather than a choice made by businesses such as ours.
“We would be wrong to say we can protect that. However, in the event of a deal that the markets like, we should see the pound strengthened which would mean prices will drop. This applies to everything, from our shredders to our parts packages.”
Brew conceded that it could be more complex for shredders to pass through customs after Brexit: “I’ve worked with organisations on every continent during my career, and there is far more to factor into a shipment than the distance – customs often prove tricky to navigate when equipment crosses union borders.
“If Theresa May’s deal is agreed, there shouldn’t be any issues. In the event of a no-deal, however, we could see machines delayed.
“Our Austrian colleagues sell shredders to virtually every corner of the globe and their advice to customers is always the same: it is important to realise that customs officers work at their own pace, so potential delays should be factored into project scheduling.”
“We are confident that we’ve allowed ourselves plenty of breathing space with minimum risk to the business until normal passage of goods can resume.”
Phil Gudgeon, Cawleys
Tomra Sorting, which claims to have provided 80% of the UK’s sensor-based sorting equipment, is investing in a new 12,000sq ft facility in Meridian, Leicestershire, to ensure that the company will be able to offer UK customers business continuity and availability of spare parts.
Brian Gist, head of Tomra UK and sales director metals, said: “Currently, when UK customers require spare parts for their sorting equipment, these are delivered to the UK from mainland Europe, with us historically holding only a small stock of spares in the UK.”
He explained that the firm’s investment in new UK premises will mean that €1m (£876,500)- worth of spares will be available for immediate delivery to customers, ensuring continuity in their operations. The premises are due to open in March.
Bywaters’ View: ‘The world will carry on turning’ after Brexit
John Glover, managing director of London-based waste management firm Bywaters, said he was “quite sanguine about Brexit”.
He explained his business has a “substantial new installation” of equipment by German suppliers, due to be completed before the end of March 2019 and that he has “every confidence” in the supplier.
On replacement parts, he said that if they are not available easily from abroad, “we have a UK industry that can make almost anything and most of our spares are now UK-sourced, for convenience”.
He added: “Whatever happens, I see our particular overseas partners as solid and reliable, inside and outside Europe. If there is no deal, there will be a period of difficulties, but it is in everyone’s interest, particularly the Europeans, to allow normality to settle down as soon as possible.
“Of course, we will all suffer inconvenience, but we have had all sorts of ‘end-of-the-world issues’ in the past – financial issues, foreign exchange, Y2K, worldwide problems and so on. The world carries on turning.”