July 8 (Reuters) – Undeterred by Brexit, small entrepreneurs like London’s Rocaba Packaging still see the European Union as their natural market and intend to win more customers there as soon as possible.
Rocaba, with 34 employees and annual sales of about 5 million euros ($5.5 million), is racing to open subsidiaries and set up a distribution network for its products across the EU.
“If anything, the vote has accelerated the process because I want to get set up before Article 50 kicks in,” Sujan Shah, the chief executive of Rocaba Packaging, told Reuters, referring to the legal clause that will formally start Britain’s exit from the bloc.
Britain’s June 23 vote to quit the EU has hammered financial markets, rattled businesses and punished the pound.
But Rocaba, which sells to over 25,000 retailers via its website, is expanding from supplying printed paper and cotton bags to include coffee cups, boxes and food packaging.
Shah says he now wants to set up subsidiaries in Ireland, Italy, France and Spain over the next year. Rocaba’s new German website took its first order on Thursday and Shah is looking for warehousing there.
“We’re not leaving (the EU) yet, so I’m playing the cards I have at the moment, not trying to work out what cards will be dealt next,” he said.
The weak pound will hurt when importing goods from Europe and China this year, meaning profits could take a hit this year. But in the future making sales in euro zone countries will provide a hedge, he said.
Rocaba imports most of its paper bags from Europe, plastic bags from India and laminated bags and tissue paper from China.
At present, it costs around 9 pounds ($12) to ship a box to Germany from its distribution operations in Britain, but that will drop to about 3 euros when it has distribution within Germany, Shah said.
($1 = 0.7756 pounds)
By Victoria Bryan
(Reporting by Victoria Bryan; Editing by Ruth Pitchford)