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Brexit & Nonwovens
As Britain prepares to exit the EU, nonwovens industry members face uncertainty.
Peter G. Mayberry,
Contributing Editor
T
his month’s column is intended to shed light on a narrow
issue—Brexit’s impact on the nonwoven fabrics industry –
based on an unprecedented and historic development that
occurred less than a month before the column went to print. The
intended goal is to set a benchmark for industry opinion—or a
“snapshot” —taken as close as possible to Brexit Ground Zero.
To that end, a survey was circulated through LinkedIn.com
to nonwovens industry members all over the world just a few
days after the Referendum vote. The survey sought non-political
opinion on Brexit’s expected impact to individual operations over
the next 12 months. Industry leaders on both sides of the Atlantic
were also contacted separately for their insights.
Input came through emails, interviews, and conversations with
more than a dozen industry leaders along with independent re-
search. This column seeks to convey that input, sometimes col-
lectively but most often directly from the source.
Uncertainty
A near-universal theme is that “uncertainty” is bad for global
industries of all sorts and Brexit promises a whole lot of uncer-
tainty for a really long time. Uncertainty alters/delays invest-
ment, stalls decision making and unnerves board rooms. For the
NAFTA market at least, this phenomenon was recently dem-
onstrated in the aftermath of 9/11 and the collapse of Lehman
Bros but can also be seen in market-driven economies around
the world.
What makes Brexit stand out is that its associated uncertainty
is tsunami-esque in proportion. With Brexit, that is, the only
current certainty is that implementation will produce a hydra-
headed beast of decisions that must be made—many of which
carry multiple possible consequences with an unimaginable
number of unintended potential outcomes—at the highest lev-
els of the U.K. and EU governments. On deadlines. Brexit, in
other words, all but codifies uncertainty for all global industries
– including nonwovens – for at least the next six to 10 years.
Some inputs were less concerned with uncertainty issues
than others. Several comments underlined the fact that the
nonwovens industry is less impacted by uncertainty than other
industries because its product portfolio includes many items
deemed essential to everyday life: diapers, wipes, hygiene
28 • NWI www.nonwovens-industry.com August 2016
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products, filters of all sorts, wound care...it’s a long list.
Perhaps to be expected, input expressing some of the great-
est concern about uncertainty came from the EU. As EDANA’s
general manager Pierre Wiertz writes: “Like many, EDANA (In-
ternational Association serving the Nonwovens and Related In-
dustries) was surprised at the results of the U.K.’s June’s refer-
endum on membership to the European Union, but recognizes
the results, and [intent] of the voters. While the current status
of the U.K.’s departure, and any agreement on the transfer of
regulations or trade agreements are unclear, we are committed
to assessing the potential impact for our industry and helping
our member companies navigate the regulatory environment
for nonwovens and related products through this transition.
“In those areas we will continue to monitor and anticipate
changes within the mission of our staff and EDANA’s working
groups, supported by expertise from our global member compa-
nies, and in close liaison with partner organizations in the U.K.”
To Wiertz’s point, it’s going to take years to sort out trade is-
sues and transfer of regulation processes alone. But those ne-
gotiations are mostly limited to the EU and those portions of
the U.K. that adhere to Brexit’s referendum results so EDANA’s
concerns are completely understandable.
INDA president Dave Rousse also cited uncertainty over Brexit
outcomes as a potential drag on the North American nonwovens
industry, but he was more optimistic—even a bit bullish.
Internationally, Rousse notes that the nonwovens industry is
“dynamic” and “flexible,” and predicts any negative impacts due
to Brexit will be “headwinds” at most.
As for impacts on the North American nonwovens industry
specifically, Dave pointed out that the U.S. is globally known for
its low energy costs, reliable infrastructure, educated workforce,
reasonable wages, and stability. This knowledge, Dave asserts,
has already attracted “substantial investment” from EU nations
over the past few years and should drive more growth for years
to come.
All in all, Rousse looks for the North American nonwovens mar-
ket to“thrive”no matter what outcomes Brexit eventually brings.
Trade, Mobility, Money
Other input from the EU and the U.K. (England and Ireland)
7/26/16 1:55 PM
 was almost universally dire, especially
with regard to currency issues. Consid-
ering the fact that the British Pound lost
about 10% of its value overnight on June
29 and has pretty much stayed at the de-
valued rate since, this is understandable.
While weaker currencies tend to increase
a nation’s exports over time, they can also
spark inflation and generally reduce na-
tional buying power.
U.K./EU input also notes uncertainty
related to border issues including tour-
ism, travel, and work privileges. As one
industry member laments, “If I can’t get
work on the continent because I’m a Brit-
ish citizen I’m just screwed.” Another
pointed to Brexit’s potential impact on
the Good Friday Agreement that has uni-
August 2016 www.nonwovens-industry.com NWI • 29
28-29 Cap Comments 0816.indd 29
fied North and South Ireland since 1998.
As Gerry Adams, a member of Ireland’s
Parliament, explains: “By its reckless ac-
tion, the British government has set aside
the democratic consent that was central
to the Good Friday Agreement and set
a course that would fundamentally alter
the relationships between the North and
South of Ireland, and between Ireland
and Britain.”
Echoing input received for this col-
umn, Adams goes on to note: “The first
and most obvious impact will be on the
North-South border. In the past, this was
marked by checkpoints, military bases
and customs posts. Today, thanks to the
peace agreement, the long stoppages and
searches are gone, and the border is al-
most impossible to discern.
“As a consequence of Brexit, that near-
vanished border will become an inter-
national frontier between the European
Union and an external state. Ireland’s
economy and people will face the re-
newed imposition of checkpoints, as
well as blocks to trade, services and the
free movement of workers. Communities
united by the Good Friday Agreement
will be divided once again.”
This scenario doesn’t sound particular-
ly conducive for doing business but only
exists on the presumption that Ireland
will break away from the U.K. and join
the EU instead, which is certainly pos-
sible but considered unlikely at present
(ditto for Scotland).n
7/26/16 1:55 PM
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