BPI warns on polymer price impact
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Plastic wrap and packaging manufacturer British Polythene Industries (BPI) warned today (29 June) that uncertain demand for silage stretch wrap used by the farming industry and polymer price increases would have an adverse impact on its financial performance.
In an update on current trading ahead of its results for the six months to 30 June, BPI said these factors had caused it to reduce expectations on half year results to a figure slightly lower than for the same period of 2009. It had previously indicated that overall results for the first six months of the year would be broadly similar to last year.
The company said it had felt the impact of further polymer price increases in June and, as the relatively cool and dry weather continued, it saw less demand than normal for silage stretch wrap during the critical early summer period. .
On 22 June BPI announced the £6 million disposal of its vacated site at Stockton which resulted in a £3.5 million gain. However, the reduction in borrowings from this disposal will be more than offset by an increase in working capital as a result of this year's polymer price increases.
BPI concluded that trading across the board continued to be challenging as the impact of these polymer price increases were addressed. Polymer prices have started to ease in North America and the Far East, but remain obstinately firm in Western Europe.
