There is ‘no good Brexit’ for UK car parts boss

A Mini on the assembly line in Oxford, UK. Car-sector companies are shaking up manufacturing processes because of fears that Brexit will make trade harder. (AFP)
Updated 17 November 2018

There is ‘no good Brexit’ for UK car parts boss

CANNOCK: “There is no good Brexit!” insists Greg McDonald, chief executive of Goodfish Group, a UK-based company making plastic components for the country’s key car sector.

The small company, nestled in the Midlands not far from Birmingham, the UK’s second largest city, sells one third of its products to mainland Europe, with weekly shipments to Poland and one every 10 days to the Czech Republic.

In addition, most of what the group sells in the UK ends up being shipped overseas.

To help Brexit-proof the business — and the whole auto industry is worried about potential disruption at ports — Goodfish is looking at possibly setting up production facilities in central or eastern Europe.

“It’s our way of combating potential loss of business and also (ensuring) future growth,” McDonald, 56, told AFP.

“If you’re a business owner and all your investment and all your wealth is tied up in your business, which is mostly the case (here), you don’t wait to be told by the politicians what the final outcome is.

“You make plans to address the situation as you see it,” said McDonald, who has lived in France, Germany, Ireland and Switzerland.

Goodfish is not alone among car-sector companies shaking up manufacturing processes because of fears Brexit will ultimately make trade harder.

The industry body, Society of Motor Manufacturers and Traders (SMMT), has blamed Brexit uncertainty for plunging UK investment, warning about the harmful impact of new, post-Brexit customs controls.

The Midlands is home to 40 percent of the UK’s 186,000 auto sector workers, including Indian-owned Jaguar Land Rover (JLR), which has already taken the plunge into Europe.

JLR recently opened a €1.4-billion ($1.6-billion) factory in Nitra, western Slovakia, its first in continental Europe ahead of Britain’s planned EU departure on March 29.

UK companies’ manufacturing processes are complicated by the need to import raw materials, which have become more expensive owing to a sliding pound — caused in turn by Brexit jitters.

“Of course we’re suffering from weak sterling because of the fears of Brexit,” McDonald said.

UK manufacturers who have survived previous difficult financial cycles “are the exporters,” McDonald pointed out.

A young company with 125 staff, Goodfish was founded in 2010 and has annual turnover of more than £10 million ($12.8 million).

How it builds on its success is likely to depend largely on the final terms of the UK’s post-Brexit trade agreements.

The draft document agreed with Brussels this week states that during a transition period ending on Dec. 31, 2020, EU law will apply to give businesses time to prepare for new ties.

This means the UK will continue to participate in the EU Customs Union and the Single Market.

It allows Britain continued market access to the remaining 27 EU countries but it must respect the rules on free movement of goods, capital, services and labor without having any say in EU decision-making.

“Of course a customs union gets around most of the problems but having to follow the rules of the EU without actually having any say on what these rules are — that’s definitely a worse position” than now, McDonald said.

Banks boost Saudi stock market, Qatar hit by sell-off

Updated 2 min 9 sec ago

Banks boost Saudi stock market, Qatar hit by sell-off

BENGALURU: Saudi Arabia’s stock market rose sharply on Tuesday, leading gains in most major Gulf bourses amid a global rally after Washington temporarily eased trade restrictions imposed last week on China’s Huawei. Qatar dropped due to a wide sell-off.
The Saudi index increased 1.66 percent, with Al Rajhi Bank adding 2.2 percent and Saudi Basic Industries up 3.3 percent.
The “Middle East today is following the positive lead from global markets. Local sentiment is also better as evidenced by the strong moves in small cap stocks,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.
“We expect Saudi Arabia to continue its upward trend until at least the MSCI effective date May 28,” added Vrajesh. “Thereafter, investors need to be selective and follow a bottom up-approach. Overall, we find better value in UAE and Egypt.”
MSCI last week said it would include MSCI Saudi Arabia in its emerging-markets index, effective May 28, a move that could draw billions of dollars into the market.
Saudi International Petrochemical closed 3.4 percent higher. The firm completed the merger of equals with Sahara Petrochemical, which delisted on May 20.
Qatar’s index was down 2 percent, with 17 of its 20 stocks sliding.
The Middle East’s largest lender, Qatar National Bank, dropped 2.4 percent, while Mesaieed Petrochemical Holding plunged 10 percent, snapping a six-day winning streak triggered by the stock inclusion in MSCI’s index.
Egypt’s blue-chip index gained 1.7 percent as most of its stocks rose, with Market heavyweight Commercial International Bank gaining 0.9 percent.
El Sewedy Electric jumped 5.9 percent after it partnered with General Authority For Suez Canal Economic Zone to establish a new company with issued capital of 1 billion Egyptian pounds ($58.82 million), in which the firm will own 49 percent.
Abu Dhabi’s index closed 1.1 percent higher, led by a 1.3 percent increase in the country’s largest lender, First Abu Dhabi Bank.
Dana Gas jumped 4.1 percent after the energy firm said it had started drilling operations at Merak-1 well, offshore Egypt.
National Marine Dredging soared 13.9 percent after last week reporting a higher first-quarter earnings.
The Dubai index rose 1 percent as all but one of its real estate stocks rose.
Emaar Properties, Dubai’s largest listed-developer, increased 2.9 percent while its units Emaar Malls and Emaar Development were up 2.3 percent and 3 percent respectively.
The UAE said on Tuesday that it will grant 6,800 foreign investors permanent residency under a new “Golden Card” system after they invested a combined 100 billion dirhams ($27.23 billion) in the Gulf state.
National Cement Company was up 1.7 percent after news it had bought ARM Cement’s Kenyan assets for $50 million.
Arabtec Holding rebounded 2.1 percent, snapping four straight sessions of losses on weak first-quarter earnings.