Advanced Materials – our take on Brexit

Advanced Materials - our take on Brexit

The uncertainty over the outcome of Brexit is affecting most businesses within the UK manufacturing industry.

At Advanced Materials we have been concerned about the changes in tariffs from European suppliers and delays in European supplier delivery times affecting our ability to supply customers within the expected time frames.

A no-deal or ‘hard’ Brexit, could mean an increase on delivery times by 7-9 working days from our suppliers and we want to ensure this doesn’t affect our lead times to you.

In planning ahead for any potential issues with supply, we have increased capacity to allow us to hold an extra 12 tons of compound, which will allow for delays if our suppliers have to increase their lead times to us.

We have also placed orders in advance for the full year of 2019, to ensure we can maintain supply.

In addition, we have spoken to key suppliers, who have mentioned plans to buy space in the UK in which they can store their products – this should reduce issues with delivery from Europe and give us the ability to increase capacity as needed.

Brexit should not affect the cost of our products materials wise; however, it may affect the costs of delivery.

We have done everything we can to ensure we can continue to deliver our products on time and to the quick lead times our customers have come to expect.

The global silicone shortage

In addition to the uncertainty over Brexit, which is affecting the UK manufacturing industry as a whole, the ongoing silicone shortage has increased our material costs dramatically.

Supply of silicone has continued to remain tight, and the resulting global silicone shortage has pushed up silicone prices by between 15 – 30% on standard grades and as much as 80% on special grades in 2019.

Tight silicone supply is expected to remain an issue well into 2019. However, suppliers are undertaking investments to increase their production capacity and Advanced Materials has taken a series of measures to mitigate any shortage.

The Advanced Materials team are aware of the present situation and are closely monitoring inventory levels to meet the demands of their customers and minimize short-term disruptions.

Relationships with our suppliers mean we have been able to negotiate reasonable terms and we have taken on some of the increase by maximizing the efficiency of our processes, lowering rubber waste and ordering higher levels of stock, which means a better price over all.

Our aim is to limit the effects of Brexit and the global silicone shortage, both with regard to cost and the impact on lead times.

We are looking forward to continued successful business relationships with our customers and suppliers in 2019 and will ensure that we do all we can to decrease the risks associated with Brexit and the silicone shortage.