Plastic fabrication, signage supplies and large-format print specialist Wrights Plastics has this week suggested that the introduction of the Living Wage in the UK next April will mean manufacturing must improve productivity in order to remain competitive.
The National Living Wage of £7.20 an hour for employees aged 25 and over comes into effect in April 2016, rising to £9 by 2020.
Wrights Plastics employs around 100 at its West Bromwich base. Commercial director Andy Watkins said this week: “We fully welcome the introduction of National Living Wage but there is no escaping the fact that it will have a significant impact on costs, especially for many small and medium sized manufacturers like ourselves. We also compete with companies in the Pacific Rim where labour costs are already significantly lower.”
Some businesses may consider reducing staff levels but Watkins said Wrights Plastics has made the decision to invest in the very latest technology as a way to increase productivity and reduce waste instead. The company has invested close to €500,000 in the latest machinery and plant – including large-format digital printers and cutters - in order to compete with rivals worldwide. “Again for a business like ours this level of investment has seen us increase costs at the very time that we are having to fund higher wages but without this investment we simply cannot remain competitive in a global market,” said Atkins.
“Cutting-edge technology enables us to produce at a faster rate with less waste and an improved finish quality. These improvements help us increase output, reduce costs and win new quality-driven business. That will allow us to meet the requirements of the new pay legislation – and hopefully continue to take on more staff too.”
Established in 1969 family-owned and run Wrights Plastics has an annual turnover of around £10m and an expanding print and signage arm. It was awarded ‘Manufacturer of the Year 2014’ by the Birmingham Post and named ‘Manufacturing Champion’ at the 2015 Express and Star Business Awards