BPI targeting farmers and retailers

Plastic packaging maker British Polythene Industries (BPI) continued to target agricultural and retail markets in the first half of this year as demand from its customers in the construction industry dried up.

The Greenock-based company said yesterday that it managed to maintain stable profits despite “challenging conditions” as investments to improve margins, such as closing a loss-­making site in Wales, paid off.

Chief executive John Langlands said that demand from the UK construction sector in particular continued to be far below the level seen before the financial crisis.

He noted that sales of packaging to builders merchants and building materials firms had dropped by a further 10 per cent this year, reflecting the stunted property market. BPI’s sales to the sector dropped by as much as 40 per cent following the 2008 housing market crash.

“We’ve been seeing a shift towards more reliable sectors,” Langlands said. “There’s an underlying growing demand for our agricultural products, particularly silage stretch [wrapping], and we are also developing products to help grow that market.”

Operating profits for the first half were down 1 per cent at £14.8 million, although they fell 12 per cent on a pre-tax basis to £13.3m because of currency fluctuations and other factors.

In line with its strategy since borrowing costs spiked, the firm cut its debt to £23.2m, from £38.5m a year earlier. It also hiked its interim dividend by 
5 per cent to 4.2p.