Made in Brexit Britain: How local manufacturers are weathering the UK's exit from the EU

British manufacturers are using Brexit to profit from the global market

Matt Mears (left), is building 'British' bikes with parts from overseas (Temple)

Matt Mears was studying engineering at Bristol when he set up his first business building road bikes. He fell in love with the proportions of British models like Reynolds, made with steel from Sheffield before the advent of carbon fibre frames. When he finished his degree he decided to design bikes in homage to classic British bikes, combining a steel frame aesthetic with modern gearing.

Temple Cycles, founded in 2014, is part of a new crop of local manufacturers proud to be British, but taking advantage of opportunities to save costs by importing materials and parts produced overseas.

With Brexit on the horizon, the falling value of the pound is making quality “made in Britain” products more affordable for consumers overseas, boosting business.

“Despite Brexit, British design is a sellable thing,” Mears says. “What motivates me are other businesses like us who, rather than offering a service like a lot of startups, produce something that can be exported. I see us becoming a big exporter globally.”

The industry for British-made bikes is growing rapidly. Official data shows that in 2014, sales of UK manufactured bikes rose 69 per cent. The UK has the second largest bicycle market in Europe, second only to Germany, according to the Confederation of the European Bicycle Industry. But even on home soil there is tough competition: Halfords has recorded strong sales in recent quarters and is responsible for one in three bikes sold domestically.

“There’s a big disconnect when you buy a bike through a brand,” Mears says. “They buy it from a bike shop, who buys it from a distributor. They are trying to convince you to upgrade every year to the fastest, lightest, brightest thing, with new colours.”

Mears, by contrast, wants to make bikes that will last: “I want to make a timeless object that people will hand down to their kids; to make bikes that will become vintage.”

He believes people come to Temple and other local manufacturers because they can speak to him personally and see that the work is being done locally: “A lot of people come to us for their first bike, or they are getting back into cycling, or they want to invest in locally-sourced products.”

“Despite Brexit, British design is a sellable thing.”

 

Temple bikes come in two models starting from around £700. The bikes are designed by Mears and assembled by the five-man team in Bristol, offering customers a local product. But some of the parts come from overseas, like the frames, which are produced in Taiwan.

“There’s no one in the UK who can batch produce frames to a reasonably quality,” Mears says. “There are artisan frame builders who will make you a custom, handbuilt frame to your exact specifications, but you’re looking at a lot of money. Even though bikes are expensive, we price our bikes at the middle market because want to create room to grow. We want to sell a lot of bikes rather than a few high-end ones.”

The business is growing, posting revenue of £125,000 in 2016, an increase of 118 per cent on the previous year. A successful crowdfunding round in February raised £198,870, some way over the target of £150,000. Mears plans to spend the money hiring up to 20 mechanics and renting a larger assembly facility in Bristol.

That will allow Temple to grow its export business, which stands at around 15 per cent of bike sales and 20 per cent of accessory sales.

Boosting exports is one way that British brands have combated the higher cost of imports because of the falling value of the pound since the UK voted to leave the EU.

Millican, a sustainable bag maker based on a farm in the Lake District, has also had to increase exports to offset extra costs accrued since the Brexit vote.

Jorrit Jorritsma, co-founder, says: “The immediate impact of the Brexit vote has been a significant increase in our costs, due to the change in the dollar/pound exchange rate. As a result, we have increased our efforts to export more of our products, since that allows us to offset part of the exchange rate variance.”

Millican, like Temple, describes itself as a local company with a global outlook. Jorritsma says says the team travelled as far as Taiwan and as near as Scotland and their hometown in Keswick in the Lake District to find the materials for their range of rucksacks.

“We use local Herdwick wool for insulation and padding in our Originals Collection, which are hand-finished in our own workshop,” Jorritsma says. He believes, like Mears, that the longevity of the products and the stories of the local people making them add value that is recognised by overseas buyers. Eighty per cent of Millican bags are sold outside the UK.

Mears says that Temple has been able to combat price rises on imports by ordering parts in bulk. As exports become more important, Temple wants to make it easier for buyers to customise their bicycles if they are ordering online from overseas and cannot have a conversation with Mears and the team in person. Some of Temple’s crowdfunding money will be spend on research to develop a bespoke frame builder to help people decide the colours and components they want.

Temple is also working with Frome Bicycle Academy to work out the most cost-effective way of producing frames in the UK. “The bigger picture is to develop the bicycle industry in the UK,” Mears says. “The UK used to be the hub for the manufacture of bicycles and that eventually got outsourced abroad. We’re trying to bring back the aspects that we can do affordably to the UK.”

In the meantime, Mears believes customers respond to the quality of the product, regardless of where the parts come from.

“People don’t mind that the frame is from Taiwan and the gears are from Japan, because we’re sourcing and buying them and then putting the bikes together,” he says. “They see that we are doing as much as we can in the UK and they buy into it that way: a local brand that is trying to do it a bit differently.”