UK becomes more attractive as a manufacturing base

Interest in establishing UK manufacturing bases for European food supply is increasing after years of a trend towards off-shoring, according to Dan Myers, business unit director at Norbert Dentressangle Logistics (NDL).

“We deal with a number of customers manufacturing outside the UK,” said Myers. “But we’ve seen a greater interest in manufacturing in the UK for certain businesses. There’s been a significant change in the exchange rate, so it has become potentially less expensive.”
There had been a discernable shift away from off-shoring by certain types of business, said NDL account director Robert Reader. “Certain customers will always manufacture on the Continent.” For example, some French pastry companies took that attitude, he said. “Certain others are more commoditised, so they are always following the lowest cost.”
He said the prevailing mood of manufacturers made it likely they would be looking to consolidate all operations here. “With the on-cost of the exchange rate, it’s becoming increasingly difficult to manufacture on the Continent, then package and distribute in the UK.”
The weakness of sterling also made the UK a more attractive market for overseas processors, said Reader. “Labour costs are cheaper [in the UK] and you have the potential for people coming in and taking advantage of the exchange rate.”
The comments follow warnings from Unilever chief executive Paul Polman that any future government needed to relieve the tax burden on UK businesses or risk them moving elsewhere.
Polman reportedly urged the government last week to invest in research and development and avoid an oppressive tax regime that dampened consumer spending and hit entrepreneurship.