BPI gains £3.5m in profit from factory sale

BRITISH Polythene Industries has banked a profit of about £3.5 million after selling a manufacturing site in Stockton-on-Tees.

The Greenock-based company announced 18 months ago that the factory, which made heavy-duty sacks and specialist films used in construction and agriculture, would close with the loss of some 160 jobs.

The plant has been scaling down its operations since then with production finally ending this month.

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Yesterday, BPI said it had sold the site for 6m in cash compared with a book value of 2.35m.

The 3.5m gain, which will be included in the firm's results to 30 June 2010, will be used to reduce BPI's borrowings which stood at 52.5m at the end of 2009.

The factory's closure was blamed on a reduction in demand from the construction sector which accounted for more than 40 per cent of its output.

The Stockton site was lossmaking with the deficit reaching 2.5m in 2008.

At the time of the announcement, BPI said closure costs would be 5m which were accounted for in the firm's 2008 figures.

Shares in BPI closed up 6.5p at 220p.