Manufacturers weathered a turbulent 2017, with Brexit uncertainty and questions around productivity just two of the challenges thrown at them.
Now, with the turn of the new year they’re looking ahead with a degree of measured optimism, thanks in no small part to the launch of the government’s Industrial Strategy whitepaper coupled with positive economic forecasts for the USA, Europe and Asia.
Ian Shott CBE, chairman of UK leading chemical and biochemical design engineering firm BPE, looks ahead to see what 2018 has in store for the manufacturing and process industries.
Brexit to kickstart reindustrialisation
For decades we’ve been reliant on Europe for imports of certain goods. With Brexit on the horizon, ministers are looking at how we can make a change and start to replace that with local manufacturing on UK soil. From the conversations I’ve been having with ministers it’s clear they see Brexit as a golden opportunity to stimulate what we do here in the UK and they’re highly motivated to support a reindustrialisation of the country supported by the Industrial Strategy and increased Government funding for Science and Innovation.
Businesses both sides of the channel to push for a fair deal
Before Christmas the CIA (Chemical Industries Association) made a joint statement with its European counterparts about what they expected from Brexit. Their expectations were identical. With the private sector united on both sides of the water, the UK government – and Brussels – will come under pressure to ensure any new regulations are fair, particularly those relating to movement of goods.
More high value product manufacturers to embrace continuous processing
Continuous processing will become even more prevalent in 2018, as increasing numbers of small volume high value manufacturers cotton on to the efficiency benefits it brings.
The pharmaceutical sector is already coming on-board, spurred on by a need to maintain profitability amidst the government’s increasing regulatory and pricing pressures on the industry. The patent cliff of the last decade was the danger warning pharmaceutical manufacturers needed to reassess their processes and look at how they could make them more efficient. Now they’re doing that by switching their small-scale production from batch to continuous. At BPE we’ve seen a marked increase in continuous processing projects in the last few years and this will continue drive opportunity going forward.
Industry 4.0, the productivity hero
The vast majority of economists expect productivity growth to remain sluggish in the UK in 2018, partly because uncertainty about the UK’s future outside the EU is expected to weigh on investment spending.
However, we think Industry 4.0 will play a significant role in boosting productivity over the next 12 months. We’re working with some big name companies to design new plants and facilities and they’re really embracing automation and a move towards a ‘smart factory’. The environment is very receptive to using technology to solve efficiency issues.
At BPE we’re using computer aided systems to design more productive plants for our customers and make our own operations more efficient too.
Government investment in the process industries
The government is desperate to catch up with countries like Germany when it comes to productivity. As a result, it’s investing heavily in innovation that will boost productivity in the important manufacturing sector.
For the first time in decades, we have a clear industrial strategy that’s underpinned by real investment. Westminster is injecting £4.7bn into innovation and research this term and promising to add £2bn more per year thereafter.
Businesses will feel this on the ground as industrial challenge funds start to open up. Arcinova, a Contract Research and Development Organisation of which I am managing director, has just won a grant of more than £1m to develop small scale modular continuous processing for drug manufacturing. We’re expecting there to be more where this came from. An Industry 4.0 fund is definitely in the pipeline and we’re predicting an industrial challenge fund for bio technology soon, which BPE could take advantage of in helping its clients to develop new processes.
Rewriting the rulebook for Hazop
As an industry we’ve been using the same approach for Hazop studies for the last four decades. When you think about the evolution that’s taken place over that time, particularly in terms of technology, it’s clear we need to reassess our approach to ensure it’s fit for purpose.
Mike Brown, BPE’s managing director, has spent the last 12 months doing exactly that and we plan to unveil a new and much more productive approach in early 2018.
Chemicals and pharmaceutical sector set for growth
There was strong growth in 2017 and we’re expecting this to continue into the coming year. There will be Brexit uncertainty but capital investment), research and development expenditure and jobs are also set to continue to grow over the next year according to research from the Chemicals Industries Association.