Opinion: Alex Foreman, Managing Director of Total Recycling Services, comments on the change in the recycling industry since the Brexit vote and looks to what it could potentially mean for his business and clients in the future.
The initial vote was a bit of a shock for everyone in the business, we weren’t expecting the result to leave and in the beginning my initial worry was that the business would suffer because of the decision.
At Total Recycling we look after a wide range of international companies such as Cepac, Responsive Engineering and Aldi who all have bases and factories here in the North East. My main concern was that if we no longer had free trade throughout Europe, how would that affect them? Would they be tempted to move to a country where their goods could move freely across borders?
We were left in such uncertainty after the vote, we were almost waiting for something to change, many media outlets were producing scaremongering stories about larger companies preparing to leave the country, but for us it was a waiting game to see if anyone would actually make a move.
Another worry was whether our customers would still be working to the same level of business themselves. We work closely with our customers to ensure they’re on the correct waste management plan and monitor their collections carefully. When our customers are busy, we’re busy because of the higher level of waste and recyclables they produce. Therefore it’s in our interest to be encouraging our customers to grow not scale down.
Months on and so far there has been no shift within our clients, we closely followed the most recent news about £556m Northern Powerhouse funding and its allocation here in the North East and so far our industrial client base looks like they are also confident in the UK’s ability to move forward from Brexit.
One main difference we have seen however is in the price of recyclables. For us, 90% of what we recycle is sold overseas. If we exchange these recyclables in the Far East we get paid in dollars or in Europe, it’s Euros.
The weakness of the pound, coupled with our high tonnages, means we are benefitting from a good exchange rate when converting from Euros and Dollars back to pounds. This alone could put almost £1million on our turnover.
However, there is always a downside, we specialise in our work for companies in hazardous waste recovery and run a state of the art hazardous waste recovery facility on our Darlington site. This 55,000 sq ft includes a chemical drum decontamination and recycling plant, waste sampling laboratory and our own fleet of tankers and vehicles. Because this is such a big part of what we do, we collect a lot of hazardous waste and of course this can’t be sold abroad, we have to pay for this to be properly treated and disposed of, an instance where the weak pound goes against us.
I think we’re now over the initial shock of our exit from Europe and on reflection I also feel there are good things to come. There’s still a lot of uncertainty and also a lot of red tape and legislation that we need to go through and not just in our industry. However, we can also look at this as a positive.
If we work to take away the red tape and barriers that businesses currently face underneath European legislation, surely that could encourage more companies to move over to Britain.
There is still a lot of uncertainty in the industry and in my opinion export tax and trade deals will be key to securing our future as a country and also for the industry. Nevertheless, looking at the impact over the last few months I am optimistic about the UK’s future standing, our customer bases’ future bases in the country and my initial worries have been quashed.
For us we’ll be following the industry and our clients very closely and ensuring to pre-empt any upcoming changes.