Philips threatens to pull out of Suffolk in case of 'hard Brexit' - putting 500 jobs at risk
PUBLISHED: 13:40 09 July 2018 | UPDATED: 13:59 09 July 2018
The Dutch electronics giant Philips has warned that it could move its production out of Britain in case of "hard Brexit", putting 500 jobs at risk at the Philips Avent baby factory in Glemsford.
The company’s executive director Frans van Houten said that any changes in current free trade agreements, the single customs union and current EU product certifications “is a serious threat to the competitiveness of this factory,” adding: “we need to do worst case scenario planning.”
The company has an 82-year history in Suffolk, as Cannon Rubber, a family business established in 1936 manufacturing hot water bottles, created the sub brand ‘Avent Naturally’ in 1984 to launch a new type of baby bottle that was short with a wide neck.
Avent was the first baby feeding company to produce teats from odourless and tasteless silicone, as well as other patented innovations such a steam and microwave steriliser and piston-free breast pump.
The company was acquired by Philips in 2006 and now sells more than 30 million bottles and 27 million soothers every year.
Philips is the latest company in a chorus of major industrial players, including Jaguar Land Rover, BMW and Airbus, to warn about the negative impact of an acrimonious split between the UK and EU.
Philips spokesman Steve Klink said he was “deeply concerned” about the competitiveness of the company’s UK manufacturing operations, which are primarily focused on export from the UK. “Take our factory for baby care products in the UK,” he said. “Already today, our costs are negatively impacted by the volatility of the British pound.
“Moreover, for its UK exports, Philips relies on the single customs union, as well as current European Free Trade Agreements and EU product certifications.
“We estimate that the cost of the exported products will increase substantially under any scenario that is not maintaining the single customs union.
“We estimate the additional costs to be in the order of high-single-digits as a percentage of sales.
“This is a serious threat to the competitiveness of this factory, so we need to prepare for a broad range of scenarios, including a worst case scenario in case of a ‘hard’ Brexit.”
The Amsterdam-based Philips group employs around 1,500 people in Britain, including around 500 people at its exports factory in Lower Road, Glemsford. In 2012, millions of pounds were invested in equipment to enable the plant to manufacture a revolutionary new baby bottle.
Brexit is also being blamed for the loss of 12 jobs at the French company Sanofi’s site in Haverhill.
The pharmaceutical group has confirmed that it plans to transfer several activities from its Haverhill plant to alternative EU sites outside of the UK.
The move enables Sanofi, which has been at Rookwood Way in Haverhill since 1982, to adhere to the regulatory requirement for medicines used in the EU.
A spokeswoman for Sanofi said: “We will be transferring Qualified Person (QP) release, Quality Control (QC) testing and Label and Packaging for all medicines destined for the EU. This will lead to 12 planned job losses across several functions by summer 2020 although we are doing all we can to mitigate redundancies where possible.”
The Rookwood Way site has around 300 staff and manufactures Sevelamer Hydrochloride and Sevelamer Carbonate, which are the active ingredients in renagel and renvela, both used to treat people with chronic kidney disease.
Suffolk Chamber of Commerce chief executive John Dugmore said: “The ongoing success of our local and national economy depends on creating trading conditions which support the investment plans of both British and overseas-owned businesses.
“These firms are telling us that aside from ending the bickering and uncertainty, what they most want from the negotiating teams is a deal that supports and facilitates as frictionless trade between the UK and the EU27 as possible.”