COVER STORY JANUARY 2020
www.manufacturingmanagement.co.uk
18
AGM Batteries is
looking to the
domestic supply
chain for growth
A streamlined supply chain
One such smaller company is
battery manufacturer, AGM
Batteries. Based in Thurso
in the far north of Scotland
(factory pictured, left), the
company is at the cutting
edge of an expanding global
market. Despite this, explains
the company’s CEO, Kevin
Brundish, the solution may be
to look towards streamlining
the supply chain. “There’s a lot
of economics involved in having
a large component on the high
seas if you were importing
chain. Our supply chain
has historically been based
overseas, but for the same
reasons we’re looking to
onshore and we’re working with
chemical companies in the UK
to establish a national supply
chain so that we can serve the
domestic market.”
The changing tariff s post-
Brexit could cause headaches.
For instance, under WTO rules,
55% of a ‘British’ car must be
made from parts sourced in the
UK. The average for British car
manufacturers is just 40%, so
caused signifi cant headaches. “We manufacture
steel in both the UK and the Netherlands,”
says Deirdre Fox, director of strategic business
development at Tata Steel (pictured, right). “We
have optimised our operations across those two
sites, so that each can support the other and we
can change what’s made where. Once you put a
hard border up between that, it entirely changes
the way those decisions are made. In addition,
it entirely changes the way your customers’
decisions are made. A quarter of what we make in
the UK is exported to mainland Europe, so that
could be disrupted.”
Santander’s report also demonstrates the EU’s
importance to UK exporters. Two-thirds (67%)
of the companies surveyed are currently active in
the Eurozone, with even more (71%) exporting to
the EU outside of the Eurozone. However, when
it comes to where businesses expect to see future
growth, the EU sits at just 11%, compared to 28%
for the Asia-Pacifi c region and 27% for North
America (see table, below).
“The Trade Barometer shows that there is
quite a big diff erence between where businesses
are currently active, and where they actually see
the most growth potential,” comments Ruotsi.
“Europe will continue to be a key market for
UK businesses, but this shows that they are
recognising potential markets elsewhere as well.
Seven out of the top 10 countries for future
potential are actually not in EU markets the
three that do make the top
10 being Germany, France
and Ireland. If we look at
the global growth fi gures for
GDP, Europe is not one of the
highest-growing continents
in the world at the moment,
and most research or forecasts
will predict that the majority
of future economic growth is
coming from elsewhere. Europe
hasn’t gone anywhere, it’s just
that businesses are hesitating to
see where investment lies.”
Fox, who will be speaking
on the subject of supply chains
Manufacturing
Conference in
London on 25
February (see
p34), has the
following advice
for anyone still
concerned. “You
can think you’re
but until you’re
you just don’t know,” she says.
“If you’re a big manufacturer,
like Tata Steel, the key lies in
close relationships with your
customers and working with
them to look at the key pinch
points and how to deal with
them – does stock need moving
around ahead of a deadline, for
example? This means having a
having a close relationship with
organisations like HMRC or
Make UK so that you’re aware
of the key issues. This is fi ne for
larger companies, but smaller
ones are likely to struggle.”
it from somewhere like
China,” he says.
“There’s a lot of
capital caught up
in that. There’s
also a lot of
uncertainty
about post-
Brexit tariff s
and trade deals,
especially when
you’re locked into
an off shore supply
at the Make UK National
very well prepared,
faced with the reality
International trade by region
Region Where businesses Where businesses
are currently expect to see
active future growth
EU outside Eurozone 71% 11%
North America 67% 27%
Eurozone 67% 15%
Asia-Pacifi c 64% 28%
Europe outside EU 63% 14%
Middle East & North Africa (MENA) 44% 11%
South America 41% 8%
Eurasia 34% 5%
Sub-Saharan Africa (SSA) 25% 6%
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