FTSE 350: Brexit puts chemicals on the line

Defra assures us that fresh legislation would "preserve REACH as far as possible, while making technical changes that would need to be made because the UK has left the EU". But without a deal, companies registered within REACH will need to transfer registrations to an organisation based in the European Economic Area, while UK downstream users currently importing chemicals from an EEA nation would face new registration requirements.

Given that it is the sole manufacturer of high-end thermoplastic 'PEEK' in the EU, Victrex is hoping to "exploit longer-term tariff mitigation strategies" there. But the company is burning cash as it stockpiles materials as a Brexit contingency, which makes last year's special dividend and growing operating profits less likely to be matched in 2019. 

Not all chemical companies have suffered at the altar of European politics. Johnson Matthey (JMAT) was less affected by changes in Brussels in 2018. Undeterred by new and rather disruptive European emissions standards, a slowing car market and the more long-term prospect of bans on petrol cars, its Clean Air Division, which supplies catalytic converters, continues to do well. Johnson will begin manufacturing battery material in 2021-22, which can be used in hybrids and fully electric vehicles.