BPI profits increase despite ‘challenging conditions’ due to materials pricing

BRITISH Polythene Industries has posted a rise in interim profit in spite of major rises in raw material prices.

Polymer prices were said to have been low early in the year but increased by €560 a tonne between February and June, a rise of almost 50 per cent. BPI cited greater duties on supplies from the Middle East and unusually large numbers of one-off incidents disrupting production at European polymer plants, as well as exchange rate movements as factors behind the price hikes.

Chief executive John Langlands said: “It was exceedingly challenging conditions with the levels of increases we experienced. We had to go to our customers and increase our selling prices as quickly and promptly as we could.

“Our sales teams had to work extremely hard in order to achieve these increases and as always there was some pressure and squeeze on margins as they didn’t come through perhaps as quickly as we would like.”

However, BPI saw pre-tax profits rise from £14.8 million to £15.7m even as turnover dipped from £281.1m to £265.8m.

The revenue decline was attributed to the lower prices in the first part of the year and the strength of sterling against the euro.

The polythene manufacturer was helped by a return to profit at its Nor th American operations after its plant in Edmonton, Canada, became fully operational again. It turned a £600,000 loss in the first part of last year into an £800,000 profit in the first six months of 2015.

Investment at its Ardeer site in North Ayrshire, where it employs around 200, has continued with a printing press installed. An additional extrusion line is expected to be installed over the next month with one more by the end of this year as part of an overall investment in excess of £5m.

Polymer prices have eased in August with Mr Langlands stating “all the signs are prices will continue to reduce in the second half”. He also signalled the company remains open to acquisitions but is not in active talks with any potential targets.