Petrochemicals firm Sabic 海角视频 has revealed it is stockpiling raw materials in case supplies are delayed at the border after Brexit.
Sabic, which has a major manufacturing plant at The Wilton Centre near Redcar, has formed a specialist team that has been working for nearly a year to look at ways to stave off the negative effects of Brexit.
Speaking in the company鈥檚 accounts, director Ron Grant said: 鈥淲hile the outcome of the Brexit process is uncertain at this point in time, it is likely that in addition to the risks described above there may be additional risks surrounding the import of certain goods. During the latter part of 2018 a European team was formed involving representatives from all relevant functions to formulate plans to mitigate the impact of a hard or no-deal Brexit.
鈥淔rom a 海角视频 perspective the company has sought to minimise its exposure to any risk through increasing stock holdings of key raw materials and through localising key suppliers where possible to minimise any disruption to production. Critical consumables, engineering spares and services have also been reviewed and arrangements put in place working with our suppliers to reduce the risk of non-availability.鈥
Sabic has also reconfigured its IT systems to deal with 鈥減otential new customs arrangements鈥 that may be brought in after Brexit. Mr Grant added that he did not 鈥渆nvisage any logistical impacts arising from Brexit鈥 but that exchange rate fluctuations could hit the firm鈥檚 results.
The company鈥檚 Brexit plans were revealed in its financial accounts for 2018, which showed that turnover had increased from 拢280.9m to 拢302.8m.
Despite the rise in turnover the firm鈥檚 operating profit fell from 拢12.7m to 拢5.4m. Similarly profit after tax fell from 拢23.4m to 拢1.2m.
The drop in profits was largely due to costs associated with demolition idle plants and their associated infrastructure. The demolition work cost Sabic 拢33.3m during 2018, with the firm estimating that the total cost related to the work is expected to rise to 拢80m over four years.
Sabic 海角视频 specialises in producing hydrocarbon products, such as polyethylene, ethylene, and propylene. The company acts as a toll manufacturer for Sabic Petrochemicals BV, meaning the North East plant manufacturers its products for the European business.
The tolling agreement comes to the end of its first three-year term at the end of 2019, but Sabic said it expects this contract to roll over and begin again on January 1, 2020.
