It is all about March 29th and getting ready for the UK's departure from the European Union, says John Byrne.
The chief executive of Hygeia, the Co Galway-based agri-chemical and garden care business, is planning for a no-deal Brexit on that date because the political divisions in the UK parliament leaves him with little hope of an agreement being reached in time.
“It is the not knowing that is the most difficult part of it,” said Byrne.
Hygeia, an 80-year-old family business in Oranmore, operates in a highly regulated market and sources up to 80 per cent of the components for its products from the UK.
Springtime is the busiest time of year for agri-businesses such as Hygeia. Brexit has made it even busier as the firm has been forced to bring forward manufacturing and storing product to get it into Ireland in case there are tariffs introduced after a crash-out Brexit.
Byrne says many businesses have brought forward the production of almost a full season of products because of Brexit, making suitable storage space more difficult to find.
The company has carried out “a huge amount of work” identifying the components that go into its final products and checking with suppliers to make sure their materials would meet regulatory standards in a no-deal scenario.
“We are all racing to this March 29th deadline,” said Byrne. “We are manufacturing product now that we would not have to manufacture until April or May because we are trying to beat that deadline.”
He says that the company would have undertake a vast amount of research and analysis if it had to change the chemicals that go into the company’s products to ensure the products meet strict European standards.
“To untangle that would take potentially take up to five years on some key products,” he said.
This is all senior management time wasted on Brexit that should be going into thinking ahead to the next season or devising three- or five-year plans to grow the business, he says.
“It is an absolute necessary distraction because it is so real,” he said.
Materials
Brexit has also forced Peter Morrow, whose company Skylark makes electric attic stairs, to change how he is running his business. Skylark buys the €600 worth of materials that go into his product directly from the manufacturer in Denmark rather than through its subsidiary in the UK.
Ever since the Brexit referendum in 2016, Morrow has been steadily reducing his company's exposure to the British market, from 60 per cent to 40 per cent, by finding new customers in Belgium, the United States and Australia.
This was prompted by sales dropping by 80 per cent in the summer of 2016 after the vote because he was so heavily dependent on the UK.
Now, he is fearful of another drop in the value of sterling and post-Brexit tariffs of 10 per cent on his exported product to the UK. A crash-out Brexit would be “an absolute disaster not just for us but for the UK itself”.
“It is the uncertainty that is the big problem for everybody,” he said. “An extension [delaying Brexit] would be welcome. The ideal thing would be some kind of clarification, a deal or something happening.”
