Since the UK Referendum on membership of the European Union Sella Controls has been continually assessing the likely impact of “Brexit” on our business and working to mitigate the impact; whatever the eventual outcome in March 2019.
Our primary objective is to ensure continuity of service to our customers by working closely across our supply chain and our risk management is focused on a constant review of supply chain planning in light of the anticipated risks around various Brexit scenarios; taking in to consideration the latest publicly available information.
Our current assessment is that the likely impact on our business will be low as our operations are based entirely in the UK however we have international customers and suppliers and have implemented continuity planning as follows:-
- The major area of risk is around future customs arrangements. We trade internationally and are already experienced at importing and exporting within and beyond the EU; working within existing customs declaration procedures with a UK EORI Number, which will facilitate customs clearances, should there be a no deal scenario.
- We are working closely with our import / export agents and transporters to ensure there is a smooth transition and they are able to declare goods on our behalf. We are also engaging the Customs Declaration Service (CDS) to assist in smooth transactions through borders.
- We have undertaken a mapping of our supply-chain with high (Tier 1) to low (Tier 4) risk and are working with Tier 1 companies obtaining their direct support to ensure our supply chain is prepared in the event of no deal. All Tier 2-4 suppliers have provided us with statements on their own Brexit preparations.
- We have held meetings with our UK wholesale suppliers who in turn have their own non-UK supplies and obtained assurances that they have appropriate plans in place and are carrying stock levels to meet our needs.
- We have undertaken a review of all of our non-UK suppliers and discussed with them arrangements to bring forward delivery of critical components scheduled for the March / April period.
- To assist our staff internally we have a help file with links to relevant HMRC advice to ensure that shipment details are as accurate as possible which will further mitigate potential delays at customs points.
- We have set aside working capital funding to facilitate increased levels of stock holding.
- We provide control systems through our engineering expertise and our technicians and engineers are predominately UK residents. We do not envisage any issues with residency of our current workforce and continue to monitor this.
- We trade in a number of currencies including the Euro with our inflows in foreign currencies aligned to our respective outflows and see little exposure should there be a short-term devaluation in sterling. Should this be longer term we will adapt our currency exposure risk management accordingly.
- We recognise that under certain scenarios Brexit may impact the Standards and Regulatory environment in which we operate however our current view is that there is insufficient clarity around this area against which to plan; other than to continually assess updates from industry bodies and regulatory authorities.
In summary, we are not aware of any issues likely to seriously impact our business but continue to monitor this closely. Any disruption we envisage will be short-term disruption at borders and customs clearance and we have mitigated this by targeted early delivery of critical equipment and strategic stock holdings; both directly and through our suppliers; as set out above. With what we know today we have appropriate plans in place, which are under constant review. As an SME we are able to react quickly to the impact of various Brexit scenarios and this has a high priority on our Risk Register and is under regular review by our Board of Directors.