Wales

Brexit: How Welsh businesses are preparing for new deal

Sion Pearce on his six-wheel hybrid wheelchair Hexhog
Image caption Sion Pearce, from Denbigh, designed the six-wheel hybrid wheelchair Hexhog - but is holding off expanding production during Brexit negotiations

Hope for the best, plan for the worst.

It is a motto that could be pinned to the wall of many UK businesses in the countdown to Brexit.

There is obviously still uncertainty, but businesses cannot wait for an outcome and have already started planning for trading in a post-Brexit world.

The UK leaves the EU a year today, although a near two-year "implementation period" has been provisionally approved which the UK government hopes will help smooth the transition.

Control Techniques in Newtown, Powys, which employs 530 people, has enjoyed a boost to its business from the weaker pound which has made their products cheaper abroad, but any trade barriers would impact on their business.

The company was bought by the Japanese corporation Nidec after the Brexit vote and manufactures variable speed drives, which are used on production lines.

It exports 98% of its products, 60% of which go to the EU.

President Anthony Pickering is optimistic about how they will handle any impact of Brexit, but would like more guidance from the government.

He said: "The tariffs... that may come in by leaving the EU [are] worrying because the customers are worried that we'll have extra cost but... we're working always on reducing the price of our products through efficiency, automation and offset anything that's going to impact us."

He said the firm was addressing possible future delays in getting goods across borders by holding more stock in European centres.

Image caption Control Techniques president Anthony Pickering is optimistic they will succeed through Brexit

Other firms are also worried about filling skills gaps, even though for many voters, restricting the free movement of people was a key reason to choose leave.

Ben Underwood is chairman of the Cardiff Hoteliers' Association, whose members are reliant on EU staff.

He said some workers have already returned to the EU and fewer are arriving so the association has increased efforts to work with colleges to recruit staff.

He anticipates it will take time for enough people to come up through the ranks and said this could lead to a rise in wages as businesses try to address skills gaps.

Recruitment is not an issue for Graham Wheeler, managing director of Real Pet Food, in Bodelwyddan, Denbighshire, who employs 70 people and has found a good pool of local workers.

However, his company imports much of its supplies from the EU.

"We could see increases in costs of up to 10%... obviously we would then need to look at how we cope with that," he said.

The company is looking at finding the supplies it needs within the UK or from cheaper sources.

Alternatively, price increases may be passed on to customers, but if that is not realistic, job cuts could potentially follow.

'Wait and see'

For some, the uncertainty has put a brake on progressing their business.

Sion Pearce, 35, from Denbigh, Denbighshire, has worked on the six-wheel Hexhog for five years and sold prototypes in Europe. It is a hybrid wheelchair all-terrain vehicle, but classed as a mobility device.

He is ready to upscale production but is unsure whether to wait and is concerned about possible barriers to trade.

"The machines will be assembled in Wales and then there'll be a tariff going out, lots of paper work, it's really going to slow everything down," he said.

"I won't be able to get my product into Europe efficiently, which is the biggest market for these machines."

He has had offers from European companies to manufacture it under licence, giving him about 8% of the profits, but no jobs would be created in Wales.

A Department for Exiting the EU spokesman said: "The UK and EU negotiating teams reached agreement on the terms of an implementation period that will give businesses the certainty they need.

"Both sides are now ready to talk about our future trading partnership and we are confident we can reach a balanced, ambitious and wide-ranging deal that covers more sectors than any other free trade agreement in the world today."

With a year to go to Brexit, the UK government will be hoping all businesses continue to trade with the same confidence.

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