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BPI's spending power will lead to acquisitions

BRITISH Polythene Industries (BPI) has cited the return of more favourable conditions to negotiate with banks as it unveiled new credit facilities worth £70 million on longer and improved terms.

PROGRESS: BPI chief executive John Langlands said it has taken advantage of favourable conditions.
PROGRESS: BPI chief executive John Langlands said it has taken advantage of favourable conditions.

The plastics and polymers manufacturer, which supplies customers in agriculture and construction, said it will continue to seek acquisitions after securing five-year revolving credit facilities with its four existing banks.

The arrangements, announced as BPI held its annual general meeting (AGM) in Greenock, increased its total facilities to more than £85m, including overdrafts, up from its current £75m.

Noting that its current facilities had been due to expire in 12 months, chief executive John Langlands said: "What we have also done is taken the facility to go for five-year revolving terms, which means we are extended right through to 2019.

"And conditions are more favourable now for renewing than they were three years ago, because we've got slightly more favourable conditions which will help us going forward."

Asked whether the firm was now a stronger position to make acquisitions, Mr Langlands said: "We made a small acquisition which we announced at the AGM last year and we certainly continue to look for acquisitions and will look at things that are available."

Beyond acquisitions, Mr Langlands said BPI, which has manufacturing and recycling plants in Greenock, Ardeer and Dumfries, was committed to investing £20m a year to expand production and install new equipment at its sites.

Noting that BPI employs about 350 of its 2200 staff in Scotland, he said: "We have made significant investments in the agricultural business, both in our plant at Zele in Belgium and in our plant in Edmonton in Canada.

"And we again are continuing to upgrade our facilities and we have made new investments, for example in Ardeer we have put in new extrusion lines which will give us benefits in terms of improving efficiencies, reducing energy costs and reducing scrap."

BPI told investors its current financial year had started well, with underlying volumes similar to the same period last year.

Mr Langlands said: "Trading is OK. We have an exposure to agricultural markets and that has been a little bit slow this year in starting off because of weather conditions.

"We do see some progress in areas like construction that we also have an exposure to and we have certainly seen better volumes coming through from our construction activities as well."

Mr Langlands was speaking after the BPI AGM had passed smoothly, with shareholders voting unanimously in favour of 19 resolutions from the board. These covered the re-election of directors, the directors' remuneration report, and the approval of a final dividend of 10p per share.

Asked what impact a yes vote in the independence referendum would have on the firm's plans, chairman Cameron McLatchie said: "It would certainly have implications for us, but until we see the exact nature this will take we are well placed to cope with whatever happens to the business. It would give us complications on currency, pensions, there are a number of issues, but at the end of the day we have a lot more factories in England and abroad than we do in Scotland."

Shares closed up 1p at 640p.

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