Member Article

Thornaby manufacturer defiant despite £170k Brexit blow

Alex Ingham, MD of Thornaby-based workwear manufacturer M.I. Supplies, says his company will lose approximately £170k this year due to an increase in importing materials, as a direct result of the slumping pound post Brexit.

Insisting that the business remains in a healthy enough position to deal with the blow, the losses are remain no small feat equating to around a tenth of the firm’s costs base.

Ingham explained: “Since the end of June and the Brexit vote, we’ve generally had price increases from virtually every supplier, averaging 9-10%, when normally it would be 2-3% every couple of years.

“Every single day we get a letter or email from one of our main suppliers, advising their prices are going up due to Brexit. If there is no negotiation and we need to get our goods, then it does make it difficult.

“They’re all putting it down to the weakness of the pound, and the majority of product that comes into us from abroad is bought in dollars or Euros, so I can see why it’s causing many firms a lot of problems.”

Mr Ingham, however, says the business has already absorbed the price hikes so that he doesn’t pass it on to his customers.

Moreover, he says his company’s strong financial performance of recent years – sales have grown 205% in the last five years – has put it in good shape to deal with the challenge.

He continued: “I think it’s going to cause quite a lot of heartache in the UK over the next six months or so. Prices are going to keep on rising, and it’s going to make it quite challenging for a lot of companies. The 10% increase is a major deal – a lot of companies are barely making 10% profit on their sales as it is.

“We haven’t passed anything on to our customers yet, and we’re trying not to. Instead, we’re looking for efficiencies in other areas – utilities, courier charges and anything that takes costs out of the business so we don’t have to pass it on to the customer.”

M.I. Supplies has been supplying a wide range of workwear clothing and accessories for more than a decade after celebrating its 10th year in business in 2015.

The firm enjoyed 205% growth in the last five years and expects to achieve another record turnover this year, up to £2.5m from £2.25m in 2015.

He added: “Whenever we take on a new customer, we guarantee to fix their prices for two years.

“In fact, one major client has had 13 years of fixed prices from us, which is unheard of in our industry. We’ve taken a bit of a gamble on that over the years but we’re still in a strong position which enables us to do that.

“We turned over £2.25m in 2015 and expect to hit £2.5m this year, but the increase buying in our goods has already cost us £170,000 so it will affect the bottom line, but thankfully we’re in a good position to absorb that and carry on business as usual without affecting our customers, which is our ultimate aim.”