News

Huhtamaki, the Finnish consumer packaging manufacturer, has announced that it is to cease production of rigid plastic consumer goods packaging in the UK, due to volume decline and increases in manufacturing and energy costs.

The company said it would start a consultation process with the 160 employees affected at its Portadown and Gosport sites.

A spokeswoman said the two sites would continue to operate, and only the rigid plastic consumer goods lines would be closed.

Huhtamaki added that it would cost €8m (£6.4m) to close the loss-making lines. However, it said the annualised earnings improvement is expected to reach €3-4m.

The move follows a review of the different strategic options for its rigid consumer goods business unit.

Hutamaki said it would continue to serve UK consumer goods customers with specific products, mainly paper based from its other facilities. The manufacturing of foodservice products at the Gosport site will continue.

The announcement came as the company reported a 47% fall in earnings before interest and taxes to €20m(£16m)  in the first quarter of 2008. Its net sales fell 3% to €548.6m. The company said it was affected by a weak performance in its films unit, high raw materials costs and adverse currency translation.