A POOLE company has withdrawn its plans to build a £2.2million factory in the town because of ‘market uncertainty’ following Brexit.

Alfatronix Ltd, which manufactures voltage converters and power supplies, already has a head office and manufacturing plant at Newtown Business Park in Parkstone.

Plans were in place to build a second, much larger, factory at Fulcrum Business Park - less than two miles away.

However following the vote to leave the EU in June the firm has seen a “rapid decline” in sales.

According to the firm’s managing director Keith Reilly the business exports most of its production to customers outside of the UK - the majority of which are in Europe countries.

“Around 70 percent of our sales come from Europe - not just EU countries but Norway and Switzerland as well,” said Mr Reilly.

“But in July we saw sales into Europe rapidly decline, dropping by 30 per cent. This is a little bit more than we are used to especially considering we have had a very good year.

“And we can only really put it down to the Brexit effect.

Prior to the EU vote Mr Reilly sat on the ‘remain’ panel at the Dorset EU Referendum Debate where he discussed the effects that a Brexit vote could have on businesses including trade agreements and business confidence.

“Uncertainty really is one of the most uncomfortable situations in the business industry,” added Mr Reilly.

“I’m sure the UK and the EU will get some sort of agreement sorted, but it’s unlikely to be for two or three years.

“And until then I’m not sure what I’m dealing with. Depending on how negotiations go some EU countries may decide they are not going to buy our product any more.

“Or we could get a deal where we are out of the EU but trading conditions remain the same.

“The thing is we don’t know and we’re not going to but big investment into the UK if in the long term that looks to longer be viable for us.”

Founded in 1979, Alfatronix, which also manufactures USB chargers for onboard trains and buses, employs around 40 people at its Newtown Business Park site.

As well as most of mainland Europe, the firm also exports its products to the USA, Mexico, South America, South Africa, Australia and New Zealand. Although these exports only make up five per cent of sales.

“We were going to build a bespoke factory that was going to be more than double the size of our current premises and would have meant more employment in the town,” said Mr Reilly.

“It would have been the biggest expansion to the firm in many years but at the moment we just can’t risk it. We will have to wait until the dust settles and go from there.”