Formica on Brexit

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Formica, Brexit & the importance of British manufacturing

Peter Rush 

A word from our President, Peter Rush

Introducing our second issue of Forward; our quarterly newsletter

Thanks to the customers who provided us with feedback from the first edition. It is most welcome and I sense that we got the mix of information just about right. Plenty of things to talk about as you will see in the contents of this edition, but notably our optimised washroom range, Formica Prima® coming home and the potential impact of Brexit.

With the decision to leave the EU and political uncertainly, we have been thinking carefully about the potential impact of such change and how we can adapt our business model to ensure there is limited impact on you and your business. We want you to be assured that Formica Group and our parent company, Fletcher Building are fully backing the UK market with substantial investment at North Shields and continued expansion of the UK team.

I am very proud to have been associated with many great UK manufacturing businesses, of which Formica Group is one of them, it’s great that we’re able to take on apprentices for Engineering at our North Shields plant and continue the growth of our UK workforce.

Please keep communicating with us both good and bad – that is one of the key ways that we will improve.

Mark Adamson 

Fletcher Building investment

Mark Adamson shares his thoughts on the UK market

Back in March, Mark Adamson, CEO of Fletcher Building visited the Formica Group European head office to check on the progress of our office move. Two months later and we’re settled back to where we belong and look forward to welcoming Mark back in the North East later in the year. Mark, who was born in North East England, started with Formica Group almost 20 years ago and has successfully worked his way to the top of our parent company, Fletcher Building, he still regularly visits the place he started all those years ago.

“We are looking at getting it back at the plant, and our HQ workforce has now moved back in. There are 80-plus people in IT, marketing, HR and administration roles and they will augment the 300 people already at the site.”

“It’s a plant that’s been around since the 1940s. We’ve spent money in North America and Asia so now we’re upgrading the North Shields facility. It’s a three year programme and represents fairly major investment in brand new machinery.”

The £40m investment is being spent in stages and there is a real buzz around the place as significant improvements are made to the factory. There is constant work going on to improve the facility and the investment will be imperative for product innovation and attracting the best people around the area: “We require new types of machinery to make new products, and we will need to increase our workforce to do that. It’s too early to say how many, but we will need new people.”

Following the decision to leave the EU and potential uncertainty it’s great to see that doubt has turned into optimism and we now look forward to opportunities Brexit brings, as we are the only HPL manufacturer in the UK: “Myself and the board came down on the side that having a productive business in the UK is a good thing.” Between 90-95% of Formica® laminate required for the UK market is manufactured at North Shields (excluding selected ranges such as DecoMetal®). 

With all of our competitors manufacturing overseas and having to import laminate into the UK, we are far better positioned to provide some stability from exchange fluctuations and will not be affected with potential import fees. We are investing into the UK, supporting British manufacturing and helping the UK economy with local taxation. With a stormy few years ahead, we’re ensuring that partnering with Formica Group will reduce the risk and continue to grow stronger together.

Question time

What does Brexit mean to Formica Group & our customers?

On March 29th, 2017, MPs backed the Brexit bill and article 50 was officially triggered. The UK is scheduled to leave the EU by the end of March 2019 and do we really know what the future holds? Mark Adamson, CEO of Fletcher Building has shared his strategic plans for Formica Group Europe and in particular the UK market, but questions were raised from a range of departments and our 300 strong workforce at our North Shields plant. We gave the opportunity following this announcement back in March, for Formica Group employees to ask our European leadership team what Brexit actually means for them, their futures and our stakeholders. We’ve summarised a few key discussion points but we’d love to hear from you with any other questions, comments or suggestions. Please email and we’ll ensure this is shared with the relevant department in our organisation.

Will our customers be impacted with Brexit?

Current trading conditions within the UK marketplace remain competitive and challenging. The pressure of rising raw material costs, combined with economic and political uncertainty are factors that are clearly important and influence our customer’s decision making process. At Formica Group we recognise the importance of the need for excellent service and constant stock availability, supported with a fair and competitive pricing structure. That’s why we’re setting ambitious targets with service, lead-time and stock availability to ensure we’re protecting our customers from uncertain market conditions.

So, what are we doing to support these customer requirements?

A lot is happening with our customer service processes and now that our new ERP system is live, there will be some significant improvements in the coming months to ensure we will become the number one laminate manufacturer for simplicity, support and service. We are also very pleased to confirm that across our UK primary distribution network and the Formica Group UK warehouses we have in excess of 2 million square metres of our promoted collection in stock, ready to instantly serve our customers requirements.

Will Brexit mean that we’ll be making more laminate for the UK market?

Yes, with the recent multi-million pound investment and new machinery which will be introduced, we plan to increase our capacity and take advantage of being the only HPL manufacturer in the UK. 50% of what we currently make stays within the UK, and certain brands and product lines are exclusive to North Shields such as Formica InfinitiTM. Furthermore, with the recent launch of Formica Prima®, we now have two worktop brands being manufactured in Newton Aycliffe.

What are we doing to drive demand?

We have a new sales structure which includes a big increase in the size of our specification team, enabling us to serve architects and designers throughout the UK. Already we’re seeing the significant benefits of this investment, with the last quarter returning a record number of Formica Group specifications. We are committed to generating business for our customers, and our focus on specification over the coming years will ensure that Formica® laminate is in high demand. To compliment this, our commercial teams track Formica Group specifications and help our distribution and fabrication partners secure projects. We offer tailored marketing, technical and fabrication support; including bespoke training courses to help all areas of their businesses, something we believe nobody else can offer.

How important is British manufacturing?

We feel very strongly about supporting British manufacturing and ensuring the quality of our laminate and service is the highest in the market, but more importantly remains consistent. Having manufacturing facilities in the North East of England means we can be more flexible and look to reduce lead times unlike our competitors who are importing from Central Europe and further afield. As a British manufacturer, we can offer greater currency stability and are proud supporters of the Made in Britain campaign, with Formica Group being one of the most prestigious brands in their directory of UK manufacturers.

How do we get customers to come and see us?

We are working on reintroducing fabricator forums and inviting our customers to the factory. We have our fabrication support unit (FSU) now welcoming fabricators to their workshop for training programmes and have an organised factory tour for any of our customers who want to visit. No longer will customers need to meet office based staff in a business park and travel to the factory. We can see customers together, all under one roof which we are now doing.

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