BRITISH Polythene Industries remains on course to hit full year expectations even though its sales volumes have dropped.

This is mainly due to "subdued" activity in the industrial and construction sectors.

However the plastic bag, silage and packaging specialist said sales to the agricultural sector have been robust with concerns over poor growing conditions and lower rainfall appearing to be misplaced.

The Greenock company, headed by chief executive John Langlands and chairman Cameron McLatchie, hopes European raw material prices may have peaked in April but they remain well ahead of imports from the Far East.

An easing of European prices is expected over the next few months.

The company said: "We have been passing through these increases to our customers and, as anticipated, the inevitable lag in this process is having a short-term effect on our margins."

Trading is broadly in line with 2011, where turnover was £508 million and pre-tax profits £19.2m, with improvements in the UK performance and the European arm continuing.

The company said: "This is a good outcome, achieved in a difficult period, where we have seen raw material increases and poor volumes from certain sectors and a lower contribution in sterling from Europe."

The company makes more than 300,000 tonnes of polythene each year with its products used in more than 50 countries.