News

MeadWestvaco, the US-based group that owns AGI in the UK, increased profits in its consumer solutions division in the half year to 30 June, but continues to be "challenged" by falling music CD packaging sales.

Profits in the consumer solutions division rose by almost 50% to £21.6m ($44m) on sales up 21% to £570m. The results included the first contribution from Calmar, the supplier of plastic, dispensing and spraying systems, which was acquired by MeadWestvaco in July 2006.

The Virginia-based group's largest division, packaging resources, which produces board, reported a 22% rise in profits to £71m, on sales of £730m.

Growth in the higher-value paperboard grades was strong, with year-over-year shipments of tobacco packaging up 23% and liquid aseptic packaging up 5%. Prices in paperboard packaging also increased by 5%, which helped to offset rising raw materials costs.

Total group sales in the first six months rose 8% to £1.6bn, with a pre-tax profit of £15m.

MeadWestvaco expects sales to continue to decline in CD packaging in the third quarter. It also forecasts "modest" profit improvements in its beverage, healthcare and speciality media packaging businesses, and continued "solid performance" in its spray and dispenser business and its packaging resources division.

Chief executive John Luke said the group was "well on track to deliver better performance in 2007 and beyond".