In a proactive move to fortify its supply chains, the UK government’s Department for Business and Trade has introduced a Comprehensive Imports and Supply Chains Strategy. The initiative is designed to ensure the uninterrupted flow of essential goods, including minerals and semiconductors crucial for the future of the domestic automotive industry. The strategy extends its protective measures to encompass various manufacturing sectors and pharmaceutical supplies.
The overarching goal of the strategy is to enhance the resilience of manufacturing and pharmaceutical supply chains, safeguarding them against global trade disruptions triggered by events such as the Covid-19 pandemic, Russia’s invasion of Ukraine, and recent attacks on cargo vessels in the Red Sea. Notably, disruptions caused by Yemen-based Houthi rebels led Suzuki and Volvo to announce production stoppages last week due to supply shortages.
The government’s strategy recognizes the significance of automotive supply chain constraints, particularly for electric vehicle (EV) batteries, encompassing battery packs and critical minerals required for battery production in the UK. To build resilience into the EV supply chain, the government is undertaking various actions, including funding British Lithium’s pilot plant in Cornwall through the Automotive Transformation Fund (ATF) and Innovate UK, along with the £2 billion ($2.5 billion) Advanced Manufacturing Plan.
The Critical Imports and Supply Chains Strategy will provide businesses with guidance on identifying and mitigating supply chain risks. This includes regular updates on export bans imposed by other countries on critical everyday goods. The strategy incorporates an online portal allowing businesses to swiftly report red tape or disruptions affecting critical imports, with the government committed to removing obstacles to save time and money for these businesses.
To facilitate collaboration, the strategy establishes a Critical Imports Council, fostering cooperation between the government and businesses in identifying risks and developing responses.
From an automotive perspective, the Society for Motor Manufacturers and Traders (SMMT) has welcomed the strategy. Mike Hawes, Chief Executive of SMMT, emphasized the importance of the strategy in supporting manufacturing agility and responsiveness in the automotive industry, especially as it accelerates the production of environmentally friendly vehicles and the required batteries.
In its guidance, the government emphasizes the collaborative nature of the strategy, highlighting that while the government bears responsibility for resilience and security, business ownership of the majority of critical supply chains is crucial. Over 100 UK firms, including those represented by the SMMT and Green Lithium, a mineral processing company planning a large-scale lithium refinery in the UK, are actively engaged in partnership with the government to strengthen the nation’s critical supply chains.
