Annex C -Business Litmus Test

Five businesses have been interviewed following the public consultation exercise in order to determine the cost impacts of the proposed amendment as well as any benefits than might accrue. It has been difficult to identify 'small' businesses who are also able to quantify the cost impacts, particularly in respect of re-engineering costs that they may incur.

Company: Door Manufacturer

Business: Bespoke door manufacturer, makes doors for UK market from raw materials

Turnover: £2 million

Size: 25 people

Key points:

• Wide range of door types so potentially large impact as large number of designs would need testing. Impact currently unclear.
• Possible one-off cost of £350k to conduct testing (and re-testing) to meet European standards (which assumes all pass first time). Cost could be higher if any failures which would require re-testing.
• Cost of about £300k per annum re-engineering costs if pursue EC labelling route. Include intumescent seals to meet 30-min test, but more involved construction for 60 min test and above.
• 15% increase in cost (based on turnover) which it would be difficult to pass on entirely to customers.
• Costs of literature not considered but would be present.
• Feel EC route does not bring any benefits at all but would be forced to go down this route because of commercial imperatives. Not really a level playing field because feel that there would still be barriers to trade despite passing European tests. Feel that there is a need to manufacture in the country you want to export to.

Company: As below

Business: Wallpaper company

Turnover: £60 million (Half products in UK, rest abroad)

Key points:

Although in UK CE marking is not mandatory they feel they are forced to go down this route even though consumer is not concerned with this.

Feels French and German competitors are just realising the implications of the new testing regime.

Would have to test and re-test their existing products. Currently they pay £766 for each fire test under BS system for each of their 8 generic group products. This gives a cost of £6k which is repeated every 5 years or so to coincide with the revision cycle of Part B. Now may be required to pay £1,585 for equivalent new test and then a further £890 for an additional two tests if the result for the first test is borderline. Therefore, testing cost could be as much as £2,475. Also, testing may be required for each of the 3,000 'colourways' as opposed to 8 generic groups. Therefore, total cost could be as much as £2.7 to £7.4 million (perhaps 10% of turnover). This may have to be undertaken more frequently than the current 5-year cycle. Feels that this is excessive as response to fire is primarily determined by the substrate rather than the product itself, so queries the need to test all colourways.

Feel that there would be no re-engineering costs.

Unable to pass on costs to consumer as main competitor is the paint which because is not part of the CPD is not subject to the same testing regime.

Can see no benefits. Certification is normally only requested by Trading Standards Officers and Fire Officers in the context of public buildings.

Company: As below

Business: Plasterboard production

Turnover: £1,662 million

Key points:

Main impact is need to move from 12.5mm (key product) to 15mm board to meet new tests.

Currently spend £1/4 million on fire testing for product development but anticipate spending extra £125,000 (as a one-off cost) to re-test existing products (in order just to stand still)

Will also have additional costs for haulage (larger product) and production (increased drying and energy costs). Would also involve a drop in production by about 20% (currently operating at full capacity) which is not good for business.

Probably pass on at least some of the costs to consumers who are going to have a higher specification board. Overall cost impact is difficult to quantify because they sell the product onto a merchant and so they do not know whether the product is used in a fire regulated or non-fire regulated application.

Although most of their product is for the UK market they probably will go down the CE route because of commercial pressures, although this is no greater hardship than that already envisaged.

Company: Fire Damper Manufacturer

Business: Fire dampers and other products

Turnover: £18m in total but £6-7m in respect of dampers (about 30% of UK market)

Key points:

• Under new regime of extended field of application expect the UK fire damper 6-7 companies to each pay £290k for 29 separate fire tests giving a total one-off cost of some £2 million.
• Estimate that payback on this would be 5-10 years assuming no profit in those years.
• Could well incur re-engineering costs of over £100k to cover re-design and re-tooling.
• Company might be large enough to absorb the cost but other smaller companies may not.
• Currently not able to sell into Europe (principally France and Germany) because their product needs to meet insulation requirements which would require expensive additional testing.
• Cannot pursue CE marking route as currently there are no test and product standards although these are under development.

Company: Flooring Products

Business: Flooring products

Turnover: £16.5 million (UK market primarily)

Key points:

• Currently assess adequacy of its products of basis of tables in BS8810 Part 2, i.e. performance in fire on basis of given thickness of concrete.
• Looking at new Europe test means that need to use more concrete (thicker floors) in order to achieve same times (e.g. 60 minutes), estimated to be about 10%.
• This will have implications in terms of increased material and haulage costs. Material costs are estimated to be £3.9 million per year and haulage costs at £2.4 million per year.
• New testing would therefore mean additional annual costs of £390k (material) and £240k (haulage).
• There will also be re-test costs but these are uncertain at the moment.
• The company's focus is primarily the UK market and will not pursue CE marking.
• Overall, they feel that concrete floors are not really an issue in terms of fire so cannot see any benefits.

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