Craven Arms business set for German move as Brexit bites
A company in Shropshire that employs dozens of people is to register its head office in Germany – and is blaming Brexit for the move.
Commercial Vehicle Linings in Craven Arms says it needs to act in order to tackle the effect of Britain's withdrawal from the EU on its business.
The firm, which supplies lightweight linings for commercial vehicles such as vans, has been impacted by the collapse in the value of the pound since the EU Referendum.
It has also seen Eastern European staff depart the business in response to the outcome of the vote.
Munich-born boss Klaus Kolleth said the cost of raw materials on the business had increased from 24.1 to 38.7 per cent of the company's turnover, significantly impacting margins.
"We buy our timber direct from China which we pay in dollars," he said.
"We buy plastic materials from Germany and some other products all paid in euros and dollars and that's where it hit us the hardest. It's huge."
He said he had the paperwork ready to register the business in Germany, capitalising on the far better margins which the company can achieve on the continent.
That does not mean the company will close its Craven Arms factory, however.
"Craven Arms will always be, because the factory is owned by myself," he added. "It can run but the more profitable ones are on the continent.
"Nobody really knows how Brexit will affect us going forward. That's why we are going to Germany and two or three years time we can make a decision about what it is.
"I wouldn't have even thought about going back, now I have to do this."
The company is likely to hold the Craven Arms factory as a separate business from its main German operation, which would mean it continues to pay tax on its profits in the UK. It will also retain its workforce – although some staff have already departed because of Brexit.
"I've lost four Eastern Europeans, they have gone home," Mr Kolleth said. "Two definitely because of Brexit, one in Germany who will come back to work for me there but he won't work in the UK.
"I don't feel alienated, but something inside me says maybe it is time to go back."
Mr Kolleth took over the business in 1998, changing its name to CVL in 2000. Among the major contracts it has won, the business fitted out more than 1,000 ‘white vans’ for BT's Openreach division.
