A PLANNED expansion of an Andover business worth millions of pounds has been cancelled due to the ‘catastrophic’ impact of Brexit, according to its owners.

German-based Follmann Chemie was set to expand its factory Sealock, in Scott Close on Walworth Industrial Estate, to export more products to the EU.

However after Brexit, the firm said its shipping costs have risen significantly, causing the £2.5million project to be cancelled.

Henrik Follmann, chief executive of Follmann Chemie, said that Britain’s exit from the European Union has been “a catastrophe” for his firm.

“Brexit has been a nightmare, building up costs and time,” he told The Financial Times. “We were going to build extra production and storage to supply customers on the continent, but we delayed it and have now taken a strategic decision to cancel this and to expand in the EU instead.”

Follmann Chemie was founded in 1977, and is a family business specialising in chemical products based in Minden in eastern Germany.

Three years ago, it bought Sealock, an Andover-based family firm which produces industrial adhesives used by the likes of Amazon, Marks & Spencer and Primark. It also produces tailor-made adhesives for specific industries.

At the time, Henrik Follmann said the purchase was a ‘perfect’ fit for both firms, saying: “In selling these products through the Follmann organisation, we will be able to develop significant growth opportunities, especially for the German market, where Sealock Ltd is not running any business activities yet.”

The firm had planned to expand its exports to the EU by investing in upgrading the production and storage facilities at its site on Scott Close in the Walworth Industrial Estate. In 2018, this saw a warehouse extension completed, increasing the amount of storage at the site by 30 per cent.

Chris Young, the managing director of Sealock, said the move would “allow further room for production expansion needed to support our continued growth”.

However, this further expansion has now been cancelled after Follmann decided to upgrade facilities within the EU instead, after revealing its shipping costs to the UK have increased by 30 per cent following Brexit changes.

The CEO described the UK’s departure from the European Union as “a catastrophe”, though Mr Young told the Advertiser exports only make up a tiny part of their business.

He said: “We were potentially looking at transferring some of our products in the UK to the German markets but at this point in time, we have held fire due to delays in transportation. Our main target has and always will continue to be the UK market.”

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