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It could be a big win or a big loss… But UK Tissue is ready for the Brexit Challenge

Helen Morris, Senior Editor, Tissue World Magazine

In a professionally efficient way this edition of TWM was chosen to coincide with Brexit Day – March 29, 2019.

Our UK Country Report would bring the latest analysis from both sides of the moment – midnight on that Friday – when the dramatic new future would begin for the UK economy generally, and for tissue especially. And, of course, what the new arrangement would mean for Europe itself.

We bring you the analysis, but, at the time of writing, Brexit has not as yet happened, and we now have a new word to deal with – Brextension. A flexible one as we now know all too well that a fixed timetable won’t work. Industry will have to wait longer yet for the politicians in London to reach a workable decision. In the UK there is a phrase for this … kicking the can further down the road. It’s putting the decision off till later, in the hope that circumstances will somehow have changed so a solution can be found.

Tissue companies are not at liberty to share this amount of indecision. Uncertainty ruins strategy business planning. So it was with some concern that TWM visited UK tissue companies … and discovered uplifting forward planning and optimism.

Our reports detail varying levels of preparation and prediction. Some companies are seeing an increase in trade as it swings back to the homeland.

Most don’t want a no deal scenario. Should that happen and the UK resort to World Trade Organisation rules, stockpiling is well advanced in the likely event of a sudden shock to smooth traffic at the access points. There are now many millions of toilet rolls held in reserve in warehouse at UK ports.

Fisher International suggests that initial volatility is ‘unlikely’ to be reflected in UK tissue fundamentals. Longer term, looking outside the EU should be a practical alternative.

Poppies Europe partner and technical director Armindo Marques says: “Brexit has actually opened a lot of doors for us. In 2020, we are definitely expecting a lot of business. We have invested in machinery … following the Brexit conclusion we will carry on growing.”

At Leicester Tissue Company (LTC), the unstable marketplace has been a benefit. Customers have been exploring new options, and LTC’s fitness for
purpose has brought them attention. Its own integrated paper mill is being built in 2022, which will dramatically reduce the need to import. Post Brexit foreign exchange rate uncertainty is the big issue.

Ayaz Tejani, chief financial and operations officer, says: “Brexit will bring its own challenges, and we are ready for them. Our model is that we will be able to supply the market for six weeks without any issues. For us as a company, we could win a lot or lose a lot”.

Tissue needs game-changing innovation
TWM features analysis of the crucial challenge facing the industry… the urgent need to attract young creative talent. That talent would be set to work creating game-changing developments which would attract the investors of future growth. In TW Milan, Essity president and chief executive Magnus Groth laid it on the line (see ExitIssues).

And in the Packaging Technical Theme, radical change is coming as governments and consumers demand the beginning of the eradication of plastic from across the globe.