Impact Brexit on water sector becomes evident

Since 1 January 2021 Brexit is a fact. Before the end of last year a no-deal scenario was avoided and a new trade agreement was presented. But what does this actually mean for companies in the European water sector? How much do they suffer from the divorce between the British and the EU or is it more or less business-as-usual? Water News Europe spoke to several European companies.

Chemical producer Kemira announced last week to raise the prices of chemicals used to prepare drinking water from 5 to 10%. The increase of prices is an indirect consequence of the Brexit. Due to transport problems between England and the Netherlands a shortage of raw materials has arisen. “The first week after the Brexit we had no problems,” states Dutch country manager Ronald Koorn of Kemira. “Later we had serious delays for weeks due to transporters who did not have their paperwork in order. Now there is almost no transporter left. Also because of the pandemic transport companies don’t want to go to England anymore.”

Shortages

Kemira transports emulsion polymers from the Netherlands for the production of British drinking water and the purification of waste water. From England powder floculants are imported for Dutch drinking water companies and waste water purification. “At the moment shortages of these products are increasing due to a lack of raw materials, high import duties and high transport costs. All these factors have forced us to raise our prices the 1^st of February.” Koorn declares Kemira has anticipated the Brexit right from the start. “We have been working on it continuously and we also started expanding our production facility in England. But at this moment it takes a lot of time to deliver our products.”

New product label

CEO Menno Holterman of Nijhuis Saur Industries also indicates Nijhuis had to raise its prices slightly for British clients due to the additional costs of import papers and the purchase of expertise. “But this price increase is not significant. We do continue to follow developments closely. The UK has recently introduced a new product compliance process. UK Conformity Assessed (UKCA) will replace the European CE mark in England, Wales and Scotland. If these rules actually come into force, we will have a year to adapt. We are currently reviewing the new requirements and the costs for complying with the new rules.”

Teething issues

Nijhuis has not suffered any delays in projects due to the Brexit sofar. “Before the deadline passed, we contracted an import expert from the UK to avoid problems. In the first week of January we managed to transport important equipment from the Netherlands to Wessex Water via Folkestone. In that first week, we deliberately avoided the Calais-Dover route. But we still expect some teething problems in the future.”

Transporters

At the end of January many newspapers mention the problems encountered by transport companiees. DB Schenker suspended transport to the UK mid-January due to problems with customs paperwork after the Brexit. The carrier explains that in only 10% of the shipments for which the company was hired, the customs forms were free of errors and missing information.

Interesting market

Despite any teething problems that may still arise, the United Kingdom remains an interesting trading partner for Nijhuis Saur Industries. “It is not without reason that we have acquired three British companies in the past seven years. Doing business will be a little more difficult because of the import process and the adjusted product legislation, but we will remain loyal to our local team and our customers. The UK is one of the largest markets in Europe. We are also encouraged by the recent statements from the UK Government on ‘Build back Greener’ which show that UK environmental policy is still in line with European targets.”

Consultancy

Jaap Flikweert has lived and worked in the UK for the Dutch engineering company Royal HaskoningDHV for many years. He expects the consequences of the Brexit for consultants to be negligible. “There is no direct restriction on the exchange of knowledge and ideas. That will simply continue. At this moment we are actively engaged in identifying and translating Dutch water innovations to the UK context, as we have done before with the Sand Motor, 3Di modelling and Nereda.”

No restrictions on expertise and thinking

Flikweert expects that exchanging staff members for longer periods will be a bit more of a hassle. “I am currently working with the Dutch company Shore, who are applying innovative coastal monitoring techniques developed in the Netherlands to our Bacton project. They might have to go through more procedures to deploy their jet skis here. We will just have to wait and see what happens in the coming months. These minor problems will not affect the wider context in which we are developing, based on Shore’s data, a digital twin of the constructed beach – because that is all about expertise and thinking.”

Tax rates

Erik Driessen, managing director Northern europe at Isle Utilities also foresees few problems. “As a consultancy firm, we don’t import or export physical products, which makes it a lot easier. Isle Utilities is British, of course. My team in the Netherland is in daily contact with British colleagues, but we have noticed very little of the Brexit so far. The only tangible thing will be a different VAT class when we send our invoices to British companies, but we already do that for customers from Norway or Switzerland. But, of course, we are only in the first month, so perhaps other things might come up that we don’t realise at the moment.