Europe's largest polyethylene film maker, British Polythene Industries plc, is tackling prolonged difficulties in its flexible packaging, stretch-wrap and recycling operations by closing two plants.
The firm is shutting down two printing and laminating plants in England: Flexoset Ltd. of Telford and Cedar Packaging Ltd. of Wakefield. As many as 150 jobs will be cut.
Meanwhile, the company said it will review its stretch-wrap film operations, which faced extreme pressure in 1996 and 1997 from rising raw material prices and intense import competition.
The Greenock, Scotland-based group, a recycler of agricultural and packaging film, also saw its recycling operations lose £1.5 million ($2.46 million) during 1997. It blamed poor-quality scrap sorting and high costs.
BPI cited poor results in the three sectors as a major factor when it reported a 17 percent drop in pre-tax profit to £30 million ($49 million) last year. It was the first drop in operating profit in a decade.
In a strongly worded statement, Chairman Cameron McLatchie wrote: ``We are not prepared to accept poorly performing businesses, and, as a priority, we have diverted management resources, and appropriate actions are being taken.''
The two flexibles plants, along with a third, Britannia Packaging Ltd. of Stoke-on-Trent, England, have been unprofitable. The final blow was BPI's recent loss of £15 million ($24.6 million) in sales of biaxially oriented polypropylene film with the withdrawal of a major snack-food customer.
BPI was forced to close the Wakefield plant because the unit relied entirely on that BOPP business. A decision to close Flexoset already had been made, and that facility's other work will be moved to Britannia Packaging, McLatchie said in a telephone interview.
The firm, with six stretch-wrap sites, has been hit by the strong pound sterling.
Despite its 1997 difficulties, BPI managed to raise its sales 10 percent in 1997 to £454 million ($743.5 million).