Business

RPC Group's future shape became clearer today after three more closures were announced in half-year results that showed a 16% rise in turnover but a pre-tax loss.

Two Dutch plants and a Czech factory are set to close as part of the group’s strategic review, in which at least eight plants will be closed or sold and around 550 staff will be laid off.

The update on the strategic review came as RPC reported a 16% increase in turnover to £381m for the half-year to 30 September 2008, largely thanks to acquisitions. However, it reported a pre-tax loss of £1.7m compared to a profit of £3.7m in the first half of last year.

However, RPC chief executive Ron Marsh today told Packaging News that the falling cost of oil and polymers as well as the effect of the strategic review had put the group in a stronger position than many to face the recession.

"At present, everyone is focused on cash, bad debt and credit risk. Our cash generation is pretty good. And we’re in the sweet spot in terms of the oil price coming down," he said.

"We’ve finally reached the end of input costs being the main issue. The issue for the second half is volumes falling in the markets we serve, although as about half of our work is for the food industry, we are pretty robust."

On the review, Marsh said that work from the factories to close would move to others in the RPC network and that with recruitment at those plants, the total drop in headcount would be around 325.

Marsh added that he expected to announce another closure by the end of the year, but would not be drawn on where it would be. "The review is pretty wide-ranging geographically and across the processes," he said.

The Dutch plants that will close are blowmoulding plant Halfweg, which makes bottles for a number of industries, and injection moulding site Ravenstein, which specialises in DIY, household and stationery products.

In the Czech Republic the Aš site, which produces thermoformed tubs for spreads, will also close. It is RPC’s only site in the country.

In the firm’s Beauté division, Mozzate, the Italian plant whose closure was announced in September, will close by the end of June next year. Its operations are moving to the Marolles site in France, which has become part of the Bramlage-Wiko division.

Marsh said that the merger would create new sales opportunities between the divisions for clients such as Estée Lauder. "There will be a significant amount of cross-selling – it’s a critical issue," he said.

Marsh also revealed that the company has succeeded in moving all but two of its German factories to a 40-hour week, representing an increase of 2.5 hours per week for staff at the plants.

RPC half-year results
Turnover: £381.0m (2007: £329.7m)
Operating profit: £4.5m (2007: £8.4m)
Pre-tax profit/loss: £1.7m loss (2007: £3.7m profit)