The chemicals industry in the UK and elsewhere could stand to benefit from a shift towards reshoring operations, one consultancy firm has suggested.

Frost & Sullivan believes that “the time to relocate production has never been stronger as political and financial incentives present opportunities for the future”.

The organisation also pointed out that the Covid-19 pandemic has highlighted “limitations of the global supply chain”, which is a further incentive for countries such as the UK to look at reshoring some chemical production.

Other reasons to consider reshoring such activity include the uncertainty surrounding supply chains, as well as trade tariffs and increasing wages in regions that were previously considered to be low cost.

Chemical companies in the UK are grappling with the news that the country will no longer be part of the European Chemicals Agency’s (ECHA’s) regulatory framework, known as Reach.

ICIS reported that this decision could have a negative impact on UK chemical production. Head of the UK’s Chemical Business Association (CBA) Peter Newport said that without regulatory compliance with EU rules “there can be no trade” with the EU.

“The UK government’s intended actions effectively prevents access to EU markets for many UK companies and makes continued access more expensive for others,” he asserted.

However, in a letter last month, Rebecca Pow, UK parliamentary under secretary of state at the Department for Environment, Food and Rural Affairs (Defra) said that the government had decided that the benefits of the UK having its own laws post-Brexit “outweigh the costs”.

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