Polymer price rises squeeze BPI margins

BPI, which supplies about 300,000 tonnes of material each year, had originally expected figures to be similar to the same period in 2009 but higher polythene costs and less demand for silage wrap costs have reduced margins.

In a trading update this morning the company said: “We indicated in May that we expected overall results for the first six months would be broadly similar to last year.

“We further indicated that overall volumes were running some 5% above the same period for 2009, but that margins had been squeezed by continuing increases in polymer prices.

“We also added the caveat that risks remained for the growing season and demand for silage films.”

The company said it had been further impacted by “less demand than normal for silage stretch wrap during the critical early summer period”.

On June 22, BPI made a £3.5m profit on the £6m sale of its Stockton, but it said this would be offset by its escalating costs.

Full interim results are due to be announced on 31 August.

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