In a major restructuring, top European film producer British Polythene Industries plc has shut or sold five plants and cut 10 percent of its work force this year.
BPI has cut 500 jobs since January, in the wake of a 17 percent drop in 1997 pretax profit to $38 million — the firm's first fall in operating profit in a decade.
BPI expects the cuts to save £5 million ($8.3 million) next year.
Officials at Greenock, Scotland-based BPI said they still are on the lookout for acquisitions in Britain and continental Europe, where BPI now has plants in Belgium, Poland and the Netherlands. Operations Managing Director Jack Paton said BPI expects to announce some deals by the end of the year.
BPI's Flexibles Division was hardest hit by the restructuring. Last year, three plants lost biaxially oriented polypropylene film sales of $24.6 million from one major snack-food customer. As a result, BPI closed the Parkside Leeds Ltd. plant, in Leeds, England.
This move, along with job cuts at Cedar Packaging Ltd.'s printing and laminating unit in Wakefield, England, led to a total of 130 job losses.
BPI cut another 67 jobs with the closing of English printing and laminating business, Flexoset Ltd. at Telford.
In the Films Division, Widnes Films Ltd. of Ellesmere Port, England, was closed, trimming 45 jobs. Neighboring stretch-wrap plant Roll-A-Rap Ltd. picked up the slack.
BPI is consolidating shrink films operations, too: cutting 37 jobs at Brithene Films Ltd. in Bridgwater, England, which makes shrink and stretch wrap. BPI added shrink film capacity in December 1997, when it bought Low & Bonar's Minster Polythene Films Ltd. shrink film plant in Leominster, England.
BPI's Industrial Products Division trimmed 66 jobs by closing its Agritay Ltd. woven polypropylene plant in Dundee, Scotland.
BPI cut more jobs in its Packaging Services and other divisions, the company announced last week when it released its second-quarter financial results.
``This restructuring has not been an easy process for any of those involved, nor is it highly productive in the short term,'' BPI Chairman and Chief Executive Officer Cameron McLatchie, said in a news release.
``We have improved our efficiencies and are eliminating many of our problems. This will give us a sound framework on which to bolt subsequent acquisitions,'' he added.
BPI made one small purchase: Clifford Packaging Ltd., a new PE converter for the carton industry. It bought the Milton Keynes, England, company for $332,000.
McLatchie reported that the company's post-consumer film recycling business reduced its 1997 losses, thanks to customers' compliance with the industry efforts to boost packaging recycling.
The new Labour government's review of the packaging producer responsibility regulations should remove uncertainty over the value of investing in recycling, he said.
BPI expects to continue with a program of capital investment this year. It still has up to $15 million from its $33 million annual budget for bag-converting and extruding equipment, Paton said.
For the first half of 1998, BPI reported operating profit up 8 percent to $22.9 million on sales of $412 million.