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Coronavirus is not only causing widespread health panics in many global locations

UK Textile Firms Should Check Insurance as China Shutdown Boosts Orders

Mar 2020

Coronavirus is not only causing widespread health panics in many global locations but also disrupting supply chains and existing production schedules, leading big-name retailers to look for alternative suppliers outside of China.

The result is that things have sometimes come full circle. Some suppliers, who lost contracts to Chinese competitors with whom they could not compete on price, are now in demand. Buyers desperate to ensure they have stock on the hangers and on the shop-floor are contacting UK-based firms, to assess what lines they could provide.

One business benefiting from this is a Leicester-based clothing producer, trading under the brand name of Paul James. The business is known for its knitwear but lost its contracts to Chinese firms three decades ago. [1]

It is not the only British firm to be back on the radar of buyers and the longer the coronavirus crisis continues, the greater the likelihood of orders having to be fulfilled by UK firms. The lead-times of a UK-produced product are far lower than those for Asian-made goods, allowing more local businesses to respond to gaps in the market relatively quickly.

Suddenly picking up big orders, needing to be produced relatively quickly, could put new strains on businesses not used to having to work at such a pace. Any UK business finding itself in demand will need to make sure that its health and safety compliance does not slip, under the pressures of trying to fulfil buyers’ demands.

Risks can quickly change within a business, if procedures are altered, or if new employees need to be swiftly brought on board, perhaps without the training required to operate some machinery or equipment. An increase in stock can also put strains on storage capacities and potentially alter fire risks.

The risk of fire is already particularly high for those businesses operating in old Victorian mills, where the presence of ‘fly’ (deposits of fluff from textiles) and the open timber-floor structure of such buildings can make them a tinderbox, should a spark, lit cigarette or other ignition source start a fire.[2]

Whilst coronavirus could present an opportunity for some British businesses to put themselves back on the retail map, any sudden demand needs to be handled carefully from an operational and risk management point of view.

Many clothing manufacturers may not appreciate the change occurring in their risk as a result of taking on new contracts and may not have the time to focus on this area, if orders need to be delivered on time. This is where working with a local broker can relieve some of the pressure. A broking expert can visit, analyse the existing risk assessments and documentation and assess where gaps in compliance may exist.

As importantly, they can advise on any useful insurance covers and discuss options available.

If you are suddenly finding your textile, clothing or other type of business in great demand, because of the situation in China, and need expert help with your risks and insurances, please use our ‘Find a Local Broker’ tool to source the assistance you require.