Brexit will push up costs, warns Combilift chief

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Brexit will push up costs, warns Combilift chief


Expansion: Combilift managing director Martin McVicar aims to double the size of the company over the next five years
Expansion: Combilift managing director Martin McVicar aims to double the size of the company over the next five years

Combilift managing director Martin McVicar said he is confident about dealing with the Brexit challenge, but warned the UK’s departure from the EU will cost Irish business and industry money.

The Co Monaghan-based, forklift manufacturer, which had a turnover of €235m in 2017, is a classic example of a company fully exposed to a Brexit fall-out.

“The biggest problem at the moment is uncertainty,” said Mr McVicar.

“The sooner any business has clarity, the better. When we know the outcome, we will figure out a solution,” he added.

Mr McVicar warned of the negative consequences of a hard Brexit on the Irish economy, because so many companies rely on business with the UK. However, he said he was confident that Combilift products would still be in demand there.

But he said UK companies also would be hit hard, potentially facing World Trade Organisation (WTO) tariffs of 4.5pc for his products “and that is only one example”.

Combilift exports 98pc of its products – 25pc to the UK.

It made 6,000 forklifts last year, and the raw materials used in their manufacture originate either in the UK or transit through the country.

The company relies heavily on trucks, which are a cheaper mode of transport than containers, for both its imports and exports.

But Mr McVicar told the Irish Independent that in a Brexit scenario, filling containers with goods exclusively for Combilift would make more sense, but that they would be more costly.

To ease out some of the red-tape associated with Brexit, Combilift has applied to become an Authorised Economic Operator (AEO), a status that will give the company authority to transit its own goods through customs more freely

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At current output level, they would need about 47 containers a week to import raw materials and another 47 leaving the country with the finished product, destined either for the UK or an EU port such as a Rotterdam for onward transit.

“It is going to cost more,” he said. “We can only absorb so much; it is going to cost the client more in the longer term.”

Despite Brexit uncertainty, the company – which has more than 600 staff – remains in expansion mode.

It expects to recruit about 100 more employees over the next year. However, Mr McVicar acknowledged that there was no way of anticipating the Brexit repercussions on his markets.

Combilift, which is 20 years old, has more than doubled in five years. Mr McVicar, who has ruled out an IPO, plans to double it again over the next five years, based on a strategy of innovation and new markets.

Funding that ambition will come from ploughing profits back into the business.

Irish Independent

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