Brexit: Impact on Chemicals How Chemical and Pharmaceutical Companies Prepare for the Brexit

Editor: Dominik Stephan

Britain's vote on leaving the Euopean IUnion has set Europe's process industry in alarm mode: Companies in chemical and pharmaceutical industries, both in Britain as well as in continental Europe are busy making arragements for the Brexit. A new study shows that a considerable number expects the decision to significantly impact their business.

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London/United Kingdom – The Brexit vote at the end of June is keeping chemical and pharmaceutical companies in Europe busy. A recent study by Camelot Management Consultants has revealed that two thirds of large chemical and pharmaceutical companies have made or will be making arrangements for Brexit.

20% of them expect significant consequences for their business from Brexit. SMEs in the chemical industry are more relaxed about Britain’s exit from the EU. According to the study, Brexit’s biggest impact will be on the choice of location for production facilities and company headquarters, as well as company takeovers and mergers.

For the study in July and August this year, Camelot Management Consultants surveyed 200 key decision-makers in the chemical and pharmaceutical industries. “Overall, reactions to Brexit are split in the chemical and pharmaceutical industries. While the large, internationally active companies are expecting consequences for their business and are already making arrangements, SMEs appear to be taking a wait-and-see attitude,” says Dr. Sven Mandewirth, partner at Camelot Management Consultants, summarizing the survey results.

50% are Making Arrangements

When asked about the arrangements for the exit, there is also a mixed picture. While 50 percent of companies surveyed do not intend to make any arrangements for Britain’s exit from the EU, over ten percent have already started. A further 40 percent also intend to take action once the specific outcomes of the negotiations are clear.

Here too there are differences in relation to company size. Two thirds of managers of large companies will be making arrangements or have already started. In contrast, only seven percent of SMEs surveyed have already taken action. Over two thirds of managers of SMEs see no reason to do so.

Expected Company Changes as a Result of Brexit

Around half of German chemical and pharmaceutical managers believe that Brexit will have a significant / major impact on the choice of location for European company headquarters (53%) and production facilities (42%) as well as merger and acquisition activities concerning British companies (47%). Three quarters of those surveyed are also expecting consequences for the sales markets and supplier structure in Europe, but only to a small extent.

Impacts of Brexit on Europe’s Economy

The majority (61%) of those surveyed see no negative impacts of Brexit on economic development, whereas one third of managers are expecting a deterioration in the economy for the chemical and pharmaceutical industries as a result of Brexit. Six percent of SMEs on the other hand are actually hoping for an improvement. Just one quarter of managers are expecting an impact on business as a result of further withdrawals by EU Member States.e