British Polythene Industries Plc (BPI.L) said it currently expects an overall reduction in first half volumes, despite another year of growth in sales of silage stretchwrap. Another damp summer, both in the UK and mainland Europe, should ensure that the silage season continues well into July.
The company had indicated at the time of its AGM on 11 May that it anticipated that the first half would produce a result, at the operating level, broadly similar to 2011, and its unaudited results to the end of May confirm this position.
As indicated, demand from the industrial and construction sectors remains subdued, and British Polythene can confirm that volumes from these sectors continue to weaken. Overall volume from the retail and service sectors has been flat, with steady demand and a number of customer and product gains offset by the continued trend towards thinner films.
As the company signalled earlier in the year, it anticipated that April was likely to have been the peak of the European polymer price. Since then British Polythene Industries has seen an easing in polymer prices. It is difficult to predict how long this trend will continue, but the current drop in feedstock costs for polymer producers may herald some longer term relief from the very high polymer costs which have impacted on margins, with particular severity in the retail sector.
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