Page last updated at 17:53 GMT, Tuesday, 2 March 2010

British Polythene Industries profits hit 12m

Shopper in supermarket with basket
British Polythene Industries has been unhurt by packaging cuts

The drive to cut food packaging has done nothing to harm the profits at one of Europe's leading plastic wrapping and bag manufacturers.

British Polythene Industries has reported pre-tax profits for 2009 that are three-times the level of last year, reaching nearly £12m.

Despite the increase, revenue for the firm fell 12% to £425m.

The company has also reduced its full-year dividend from 14.5p per share to 11p.

The Greenock-based firm saw a 10% drop in the volume of plastics produced, to 275,000 tonnes.

This was accelerated by the slump in the construction industry and by changes in demand for food packaging.

Parts of the UK public sector now face many years of reduced spend and this could easily result in reduced demand for some of our products
BPI results statement

But with the announcement of its annual figures, it said retailing customers were seeking thinner, stronger materials.

It is also increasing its capacity to provide plastic packaging for mail order and online shopping businesses, with new investment in its Swansea plant.

BPI is also expanding its Ardeer plant in Ayrshire to meet demand for plastics in agriculture and horticulture.

One new production line, worth £4.5m, has a capacity of more than 15,000 tonnes of plastic production each year, and is capable of producing films up to 25m wide.

'Potential outcome'

BPI was last year working through the closure of its Stockton-on-Tees plant, with 30,000 tonnes of production being moved to other sites.

In January this year, it announced closure of its factory in Brampton, Cumbria.

Company bosses said they believed demand for its product remained resilient in agriculture, retail, transit packaging, healthcare and refuse bags.

Construction is "around the bottom", according to chief executive John Langlands, and likewise industrial and non-food retail will get no worse.

However, the results statement read: "The UK and Irish markets are in the grip of a prolonged recession for their construction industries, with little sign of any light on the horizon.

"Parts of the UK public sector now face many years of reduced spend and this could easily result in reduced demand for some of our products."

Chairman Cameron McLatchie added: "It would be imprudent not to have a sense of caution when looking at the potential outcome for 2010, but, at the same time, we are confident that the group continues to take steps to produce the best results we can in what remains a very challenging market."

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