Croda stocks European warehouses ahead of Brexit

Croda makes chemicals for Unilever, Procter & Gamble, LOreal and Boots
Croda makes chemicals for Unilever, Procter & Gamble, LOreal and Boots
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FTSE 100 chemicals giant Croda International is moving stock into European warehouses as it prepares for Britain’s exit from the European Union.

Snaith-based Croda said it is acting now to prevent disruption in case of a hard Brexit.

Steve Foots, chief executive of Croda, said: "We've got a Plan B for Brexit. We've got four sites in the UK and most of the output goes abroad. We are moving stock into European warehouses although we are not stockpiling.

"If there is a cliff-edge Brexit, which we don't expect, our job would be to minimise the disruption at the borders."

The company, which lists 96 per cent of its sales and 80 per cent of its production outside the UK, is reviewing which ports could be used in future.

"None of our business goes through Dover/Calais. It's all through Felixstowe, Harwich and Immingham. We are very well placed," said Mr Foots.

Croda also said it was re-registering UK products sold in the EU to ensure compliance, mainly with the EU’s Reach programme, which requires companies to register the substances used in production.

The company, which counts Unilever, Procter & Gamble, L’Oreal and Boots among its customers, was speaking about Brexit as it announced a £270m windfall for shareholders.

Croda has raised its ordinary dividend by 7.4 per cent, while stronger cash generation has allowed an additional £150m special dividend.

The group said adjusted pre-tax profits rose 3.5 per cent to £332m for the year to December 31.

Mr Foots said the group has just launched a new product called Infraveil, which protects against infrared rays rather than ultraviolet. Infrared rays accelerate photoaging - premature aging of the skin.

"We plan to sell it to all the big brands. We are just launching it now," said Mr Foots.

Analyst Adam Collins at Liberum said: "Croda's outlook statement says conditions remain challenging but further progress is expected.

"The statement reveals there has been an unexpected problem in starting the new US biosurfactants plant (a gasket leak) which will mean it will be shuttered until later this year resulting in a £2m operating cost per quarter."