News & Views

BMA statement on conflict in the Ukraine

In the last few days, I have been liaising with bathroom manufacturers to better understand the implications of the conflict in Ukraine on our sector. Over and above any business considerations, everyone’s initial thoughts have been with the plight of the Ukrainian people as they defend against unnecessary aggression. The human tragedy of the war is foremost in our minds.

There are some indirect impacts of the conflict that affect all UK-based bathroom manufacturers. Our industry has been struggling with inflationary pressure on raw materials, logistical costs, and energy for two years. The dependence of Europe on Russian gas is likely to exacerbate that inflationary pressure especially for those product categories that entail energy-intensive processes, such as ceramics. Copper and nickel are two important raw materials that are expected to be in short supply and are important in the manufacturing of plumbing products. Further price increases are therefore unavoidable.

Other parts of the economy are subject to similar or worse inflation. Continually spiralling cost of living may dent consumer confidence, as will the unwelcome cloud of a war on our continent for the first time in over generation. We’re currently in a historic period of high demand in home improvement; manufacturers hope that a de-escalation of the conflict, a thoughtful response to the crisis by policymakers, and the requirement to use savings before they are depleted by inflation will help maintain demand.

The Government has already warned that cybersecurity is a key threat, and while UK-based bathroom manufacturers have robust protections in place vigilance is being stepped up. The sector is also watching the wider geopolitical ramifications of the conflict closely. Russia has aligned with China in recent years, and Beijing’s response to their ally’s aggression may be a bellwether for the future of the world order. This is of critical importance to bathroom manufacturers with around half of bathroom imports into the UK originating in China.

For some companies, there are more direct impacts that are causing consternation right now. Many bathroom manufacturers are part of global groups with Russian and Ukrainian subsidiaries. Inter-group trading has been made a lot harder, and in some cases impossible by sanctions. Reconfiguring internal supply chain arrangements is not a straightforward or quick endeavour.

A few bathroom manufacturers have been working directly with Ukrainian factories and the burgeoning supply chain in the region. Those partners are now understandably out-of-reach, risking supply on certain product lines and in one case seriously affecting a critical launch. Nevertheless, the companies concerned have expressed the desire to support their partners with a commitment to return to working with them when possible.

It is manufacturers’ duty to consider the implications of the crisis on their business, and of BMA and our friends at the CBI to pass on that understanding to Government. Nevertheless, the sector is united in our concern for the people of the Ukraine and our hope for peace.

Written by by Tom Reynolds, Chief Executive, BMA

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