Cheeky Panda keeps toilet roll business sustainable by setting up French business

Perthshire born and raised Chris Forbes has made two significant changes to his Cheeky Panda business to cope with the planned departure of the UK from the European Union.

His business has set up a European business entity and a new supply chain.

Forbes says that the fact that the sustainably made toilet roll business is still young – having only been established in 2016 – probably makes easier for a business like his to make changes rather than longer-established ones. “We don’t have long-integrated vertical processes and ‘this is how we always do things. We’re actually quite a nimble organisation when it comes to looking for solutions.”

Despite their youth as a business Cheeky Panda, run by Forbes along with his wife and business partner Julie Chen, is selling into 15 different countries -– in mainland Europe and the Middle East.

“Because our mainland European business has taken off quite dramatically we set up a French entity about six months ago. The reason was because French supermarkets will only deal with French companies, so it kind of forced our hand to do that, but from a Brexit point of view it’s quite good because it gives us a European Union entity as well as a British entity.”

Cheeky Panda’s products, which range from toilet rolls, through kitchen rolls, baby wipes, pocket tissues are manufactured in China. So it means that the products destined for mainland Europe can be shipped through Antwerp rather than Felixstowe, thus avoiding any Brexit-induced shipping delays on the way in or out.


“Our products don’t need to touch UK soil in order to be able to trade in the European marketplace. We just needed to set up a new supply chain. We’ve been working with our supply chain partners to look at European distribution hubs and looking at doing it by sea and by rail as well.”

Moving the product by rail actually benefits the business by lessening the amount of time it holds stock.

“We used to have to carry about 60 days of paying for the goods before we could sell them but bringing it in by rail it’s only about 16 days. So it releases about 45 days of working capital and it means that the goods are readily available. It’s a bit more expensive but that’s offset by availability and turnaround time.”

Forbes says that the biggest problem they have experienced is servicing the Irish market, sending goods from the UK to Dublin. “If there is a No Deal, there’s a certain degree of uncertainty about how we’re going to continue to service the Irish market. They’re not at the level of spending where we would just move containers directly into Ireland and warehouse them there.

“What we’re doing in the interim to make sure we’re covered is that we’re putting three months additional buffer stock into the Irish market just in the event of a No Deal Brexit on the 29th and then we’ll see what to do after that.”

Forbes says: “We take quite a proactive and positive view on these things and it’s like it doesn’t really matter whether we’re selling goods in Spain or Italy or the UK or Bahrain or Dubai, two of our other markets. It’s how are we going to service it, how are we going our goods to distributors and how are they going to take it from there.”

Forbes says they are thinking about shifting over assets to the French entity “so it sits under a European system rather than a UK one”.

Cheeky Panda’s turnover is growing fast. He says: “We have an every day sustainable commodity. Regardless of what happens in Westminster and what the politicians do in Brussels, there’s still going to be a demand for our products.

“I thought that Brexit was an excuse for people not to do stuff, people have been waiting to see what the politicians will do. I don’t think the politicians know themselves what they’re going to do so for us it’s kind of like business as usual.”

This interview was conducted over the phone with Chris Forbes speaking from Nuremberg with Cheeky Panda looking to do “a big launch in Germany next year.”

“People are still going to need to use our products, it doesn’t matter how we book it, whether we book it through the European company and how we transfer the assets back in a different way. It’s not going to impact our trading strategy.”

He goes on: “In a lot of ways it creates a natural FX hedge as well. If the pound tanks and I’m making more money in the European market it creates a natural buffer. If the euro tanks and the pound strengthens then it kind of evens itself out. If anything Brexit has been even more of a reason to push into the European market.”


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