BRITISH POLYTHENE IND.
Profits fall 11% / Structure to be refocussed / Rationalisation of retail bags sector business
Europe´s largest producer of polyethylene film and bags is undertaking a major review of its current business methods in the light of a 9% fall in operating profits and a 11% decline in pre-tax profits in 1999. British Polythene Industries (96 Port Glasgow Road, Greenock, GB-Scotland PA15 2RP) says its existing divisional structure will be changed into a number of large, focussed businesses in order to reduce costs and meet the demands of packaging customers experiencing increased competitive pressures.
BPI´s retail bag business is continuing to suffer from the presence of lower-priced imports and will now undergo further rationalisation following a six-month period said to be the poorest the company has ever recorded. The impact is likely to fall mainly on the Alida Packaging operation (Heanor, GB-Derbyshire DE75 7RG) where around 80 jobs are expected to be axed. “Despite previous restructuring in our manufacturing facilities ... we are unable to compete profitably against product from the Far East,” confirms chairman Cameron McLatchie.
McLatchie says the group´s rationalisation programme, which has seen the closure of a woven intermediate bulk container operation and a gravure printing plant in the last three months, will accelerate during 2000. It is likely to continue for several years.
Despite a sales decline of 4%, to GBP 452m, an operating profits slide to GBP 21.8m, from GBP 25.4m, and an 11% reduction in pre-tax profits, to GBP 19.2m, McLatchie termed the 1999 results as a creditable performance. This assessment was based, largely, on BPI having to absorb much of the 70% increase in polymer prices during the period April-December because of the difficulty in passing on these extra costs to customers during a period of low inflation.
1999 saw good volume gains in silage stretchwrap in Europe and refuse sacks in the UK. But despite its experience in the recycling of post-consumer waste films, BPI says it has yet to make an acceptable return for this business. The waste film plant at Heanor is currently operating at a loss, says McLatchie, blaming poor thinking by the UK Government with regard to subsidised collection schemes for waste film from farms.
Despite facing a GBP 1m charge for the proposed Climate Change Levy in the UK that will put it at a further disadvantage with global competitors, McLatchie believes the restructuring programme will enable BPI to meet future challenges and capitalise on available opportunities. Volumes in the first quarter of 2000 are similar to 1999, although some reversing of the millennium stock-build has dampened aspirations for growth.
BPI´s retail bag business is continuing to suffer from the presence of lower-priced imports and will now undergo further rationalisation following a six-month period said to be the poorest the company has ever recorded. The impact is likely to fall mainly on the Alida Packaging operation (Heanor, GB-Derbyshire DE75 7RG) where around 80 jobs are expected to be axed. “Despite previous restructuring in our manufacturing facilities ... we are unable to compete profitably against product from the Far East,” confirms chairman Cameron McLatchie.
McLatchie says the group´s rationalisation programme, which has seen the closure of a woven intermediate bulk container operation and a gravure printing plant in the last three months, will accelerate during 2000. It is likely to continue for several years.
Despite a sales decline of 4%, to GBP 452m, an operating profits slide to GBP 21.8m, from GBP 25.4m, and an 11% reduction in pre-tax profits, to GBP 19.2m, McLatchie termed the 1999 results as a creditable performance. This assessment was based, largely, on BPI having to absorb much of the 70% increase in polymer prices during the period April-December because of the difficulty in passing on these extra costs to customers during a period of low inflation.
1999 saw good volume gains in silage stretchwrap in Europe and refuse sacks in the UK. But despite its experience in the recycling of post-consumer waste films, BPI says it has yet to make an acceptable return for this business. The waste film plant at Heanor is currently operating at a loss, says McLatchie, blaming poor thinking by the UK Government with regard to subsidised collection schemes for waste film from farms.
Despite facing a GBP 1m charge for the proposed Climate Change Levy in the UK that will put it at a further disadvantage with global competitors, McLatchie believes the restructuring programme will enable BPI to meet future challenges and capitalise on available opportunities. Volumes in the first quarter of 2000 are similar to 1999, although some reversing of the millennium stock-build has dampened aspirations for growth.
31.05.2000 Plasteurope.com [17366]
Published on 31.05.2000