From London to Vantaa, Brexit chaos is already hurting Finnish businesses

The uncertainty around the UK's departure from the European Union makes life increasingly difficult for Finnish companies that do business with Britain.

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File picture of Colly Company MD Juha Nyberg / Credit: News Now Finland

On an industrial estate in Vantaa, the effects of Brexit are already being felt.

Even though the United Kingdom hasn’t yet left the European Union, the uncertainty of what comes next after 29th March makes life both complicated and worrying for Finnish companies that do business with Britain.

Colly Company is a small engineering firm, with 15 staff and an annual turnover of €7 million. The company has been around for more than 40 years, and started off as a family business but grew to become part of a larger corporation. They specialise in industrial grade filtration systems for air, oil and water in kitchens, hospitals and laboratories.

Colly’s most confronting problem as the Brexit clock counts down, is that its two biggest suppliers of specialist equipment have their European distribution hubs in the UK.

With Brexit supposed to happen at the end of March, Colly Company managers don’t know if they’ll need to hire a customs agent, what the extra fees will be to import equipment from Britain, and what the lead time or delivery arrangements will be. They’re almost certainly looking at price increases as well, despite fixed exchange rates in their contracts.

What’s happening in the Vantaa industrial estate is being mirrored at companies across Finland, and the uncertainty is bad for business.

“For us it’s been a miserable time. You know that somebody is going to shoot you, but you don’t know with what, or where. It’s a very unpleasant situation” says Colly Company Managing Director Juha Nyberg.

Exterior of Colly Company office in Vantaa / Credit: News Now Finland

There’s not only uncertainty for the Vantaa office, but also their UK suppliers who are operating in the dark as well.

The suppliers have been looking at options to move their bases to continental Europe but again, with a complete lack of concrete information about what is going to happen after 29th March, those suppliers don’t even know if it’s something they should do. And in any case, moving a whole operation to another country is not something that can be done simply or quickly.

“For us, we are screwed if something goes wrong and there’s no way to get out of it” Nyberg tells News Now Finland, adding however that he thinks the potential financial impact would be “reasonable”.

“It might be that the biggest impacts are about the paperwork and bureaucracy that is coming. That is the part I am a little bit afraid of. It might be that the work is quite extensive, and it might mean further delays in our deliveries. Things we get now in one week, is turning to two weeks. It sounds not big, but if there’s an urgent delivery it’s huge” Nyberg explains.

Detail from Colly Company reception desk / Credit: News Now Finland

Trying to plan for Brexit

Colly Company has bought some extra stock from the UK in advance, trying to hedge their Brexit bets. But it’s not a profitable way to do business with equipment sitting in a warehouse without a confirmed buyer.

“It’s very bad for our working capital, because it means that our stock value is really now going up and for us that’s a traumatic situation as well. It means we are buying things that we don’t have orders, and it might mean they are staying very long in our stocks. So I would say for that reason it has been a poor decision to go to Brexit, and we have been very unlucky that our main suppliers have been from that island”.

Britain is still the world’s 5th largest economy, and from Prime Minister Theresa May, to the British Embassy in Helsinki, the message has been that the country is open for business, despite it’s chaotic handling of the Brexit process.

So does Colly Company Managing Director Juha Nyberg think Britain is open for business?

“Currently not” he says.

In fact, if it was possible he would move his business away from the UK and source the specialist equipment elsewhere. He’s looked around Europe, but Britain is the only place to get the components his customers in Finland need.

“I hate what it has been the past half year, even longer, when you realised there’s no real plan”.