BPI wraps up 50 job losses

Published on Tuesday 18 November 2008 20:36

BRITISH Polythene Industries (BPI) yesterday became the second Scottish packaging company in two days to announce job cuts, warning demand from the construction industry had fallen by a third.

The Greenock-based firm said it had laid off 50 staff from three UK locations, and expected "to announce further initiatives in the coming weeks to align our capacity with market demand".

On Monday, Macfarlane Group revealed it had laid off 50 staff across the UK and warned it was looking at other ways to reduce costs as demand softens.

BPI chief executive John Langlands said demand from the construction industry, which accounts for about 15 per cent of group turnover, had fallen by a third in the nine months to 30 September compared with the same period in 2007.

He added that the company's outlook for the coming period was not strong.

"We don't see any return in that sector in terms of demand going into 2009," he said.

Elsewhere demand has held up. Sales to food retailers and the agriculture sectors, which make up 55 per cent of sales, had shown "modest" growth.

Raw material prices had dropped following an easing of crude oil during the period, but margins failed to recover as the cost of electricity spiked at the start of the fourth quarter.

Langlands declined to comment on the possibility of further job cuts, or how much it was seeking to save.

BPI said it had renegotiated and extended its banking facility, giving it total debt capacity of 100m with a 57.5m revolving credit element repayable in 2011.

Langlands said that while the renegotiating was "certainly more expensive than I would have liked", the company's previous facility was due for repayment in mid-2009 and BPI took the chance to secure credit now.

Shares dropped 10p to 185p.