How Might Brexit Effect the Supply of Cardboard Packaging?
We have been asked by a number of our customers what plans we have in place for post Brexit to ensure continued material supply and the maintenance of lead times and service levels.
We have been consulting with our customers (as the effect Brexit has on them will invariably have an effect on Dairi-Pak) and a range of industry experts. The following is an informed summary put together by the Sheet Plant Association (our trade body) for your reference. This was delivered by, Andrew Large (Director General of Confederation of Paper Industries - the CPI) at the recent 97th SPA Conference.
For much of the UK corrugated industry, there is a significant proportion of paper being sourced from the main domestic suppliers’ factories in UK. Domestically produced recycled grades will remain available, as long as Mills don’t choose to take unexpected down time for maintenance.
Beyond UK shores, a large amount of new recycled capacity is coming on board across mainland Europe in late 2018/early 2019. We believe that the paper supply situation is easing overall, and in turn supply and availability of paper from mainland Europe will continue as before. In turn, for certain recycled grades, it is possible to source alternative supply from outside of mainland Europe too, should the need arise. In reality the potential imposition of tariffs is not really the main concern, as paper is already exempt under WTO rules.
The primary risk is the potential for increased bureaucracy leading to delays at ports, holding up shipments and impairing the ability to effect “on time” deliveries. It is noted however that the majority of EU paper suppliers hold stock across the UK, the levels of which we are reassured they would manage should a potential NO DEAL be approaching, and thereby help to mitigate the effect of any one-off or ongoing border delays.
It is possible that any ongoing extra administration, additional delays or supply chain costs that are incurred as a result of the changes post-March, and through the effects of Brexit, may have their effect on the price of paper in the UK. A potential falling market for paper may or may not mitigate for these extra costs.
If you need to discuss contingency planning for your business in more detail, or need support building contingency stock levels, please do not hesitate to get in touch with me email@example.com