Materials

Rising input costs and customers moving overseas could be key factors in RPC Group’s decision to close a third UK factory this year.

The rigid plastics group said it would shut its injection-moulding and thermoforming plant in Hereford because it had been “impossible to bring it into sustainable profit”, despite investment in new business. The plant, which employs 150 staff, produces tubs for, among other products, spreads and ice cream.

The news follows the announcement in July that RPC planned to close its Beauté plant near Middlesbrough, with the loss of 160 jobs, because of the “rapidly declining UK customer base” for its products. In March, 50 staff lost their jobs after RPC closed a plant in Bristol. RPC said it would make “every effort” to help the 310 employees at the Hereford and Middlesbrough plants to find alternative employment.

Europa Partners packaging specialist Nicholas Mockett said that, given the current climate, RPC would have to take the necessary steps to “remain a successful supplier”.

“If your customer decides it’s better to manufacture in Poland than the UK, there are not a lot of options, even if your product can be shipped,” he said.

But he argued that RPC was not the kind of company to have taken the decision lightly. “It would have been considered and utterly unavoidable,” he added.

Since the beginning of the year, RPC has warned of the need to increase prices because its margins are being hit by high raw material prices. Its annual pre-tax profits for 2006 fell by more than a quarter despite an increase in sales.

Chief executive Ron Marsh has told Packaging News of the need to “make a fuss” about the competitive disadvantage for European producers facing higher polymer prices than those in North America and Asia.