13 May 2021

FT: Brexit disruption forces German exporters to think again

“A catastrophe” is how Henrik Follmann describes Brexit’s impact on his family’s chemicals company. Based in northern Germany, it recently scrapped plans to expand its UK factory because of Britain’s departure from the EU.

Follmann Chemie had planned to invest about £2.5m in making more adhesives at the plant it bought three years ago in Andover, southern England, to boost exports to EU clients. But its chief executive said this plan was wrecked by the extra difficulties of shipping goods both ways across the English Channel: “Brexit has been a nightmare, building up costs and time.” “We were going to build extra production and storage to supply customers on the continent, but we delayed it and have now taken a strategic decision to cancel this and to expand in the EU instead,” said Follmann, the third generation of his family to run the company.

Follmann has had a tougher Brexit than many companies. But its experience of increased costs and delays to shipments between the UK and the EU is typical of many businesses grappling with the extra bureaucracy and pitfalls created by the new customs checks.

Even though the UK and EU agreed a last-ditch trade deal to avoid tariffs on most goods when Brexit came into force on January 1, trade between the two has been disrupted by higher shipping costs, transportation delays, health certificate requirements and more complex customs requirements at the border. The UK’s Office for National Statistics on Wednesday said British exports to the EU in the first three months of this year fell 18.1 per cent from the previous quarter, while imports from the EU were down 21.7 per cent. In contrast, UK trade with non-EU countries grew slightly in the same period. There have been signs of a partial recovery from the initial post-Brexit disruption, as UK trade with the EU increased in March, albeit at a slower pace than with other countries. But for the first time since comparable records began in 1997, the UK imported more in March from outside the EU than within it, underlining how British trade has shifted away from the bloc. ....

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