BRITISH Polythene Industries is spending £5 million upgrading one of its Scottish plants after reporting a 20 per cent rise in profits.
The polythene and stretch wrap maker, which has its headquarters in Greenock and operations around the world, confirmed it is making further substantial investment into its site in Ardeer, North Ayrshire, where it employs around 200 people.
That will see a £3m printing press arrive by the end of this month with two new extrusion lines, which process raw plastic, being installed over the course of 2015.
The business is expecting to spend at least £20m enhancing factories during the course of this year.
John Langlands, chief executive, said the decision had been taken to invest further in Ardeer after seeing substantial improvements from a new extrusion line put in during 2014.
Mr Langlands said: "These will be further significant investments in our plant there.
"[It is] at least a £5m investment in Ardeer in 2015 on the back of significant investments we have made over the years as well.
"It gives us greater capacity to improve our performance and become more efficient, improve our quality and give our customers better service."
That came as BPI, which employs around 350 of its 2,200 staff in Scotland, revealed a sixth consecutive year of profit growth even though revenue slipped back from £507.5m to £499m.
Production volumes rose by more than one per cent to 274,000 tonnes.
Mr Langlands said the UK construction market was improving while agriculture also had a strong year.
Investments in factory improvements in recent years are believed to have helped performance with both the European and UK and Ireland businesses seeing profits increase.
But there was a reversal in North America, from a £900,000 profit to an £800,000 loss.
That was attributed to a previously highlighted problem in Canada where there was a 10-week delay in the installation of a new production line at the Edmonton factory.
Mr Langlands said: "The key thing that caused the loss was the problem with the line.
"It is now up and running well so we would expect a much more normal year and also be looking to grow our volumes where we can.
"The whole point of investing in the line was to improve products and we will start to see the benefits of that come through as well."
Overall pre-tax profits rose from £18.5m to £22.2m while BPI also increased its dividend from 10p to 11p.
Mr Langlands said: "It has been a good year with growth in our UK and European businesses. Yes we had a setback in North America but we would expect to see a recovery in 2015."
That view was echoed by chairman Cameron McLatchie and he said: "We anticipate a much better year in North America, continued progress in the UK, and another good performance in Europe and we look forward to the remainder of 2015 with confidence."
Net debt was trimmed from £30m to £24.1m which helped to reduce finance charges from £1.9m to £1.6m.
BPI has agreed with the trustees of its pension scheme to revalue what it pays based on the consumer price indices rather than the retail prices index.
BPI said it will make a one off payment of £11m to the scheme in June this year as part of the agreement.
Mr Langlands stated BPI was in a strong position to look at takeover deals.
He said: "Now having got our borrowings down to an acceptable level and having grown the business successfully over the last number of years we are in a position to look at further acquisitions if they become available."
Mr Langlands acknowledged low oil prices had led to reduced polymer prices towards the end of last year and in the first few months of 2015.
He indicated that a price rise is expected later this month and said: "As always these prices continue to be a little bit volatile.
"If you look at our results then despite significant increases we have managed to maintain increases in our operating profit.
"We have become good at managing this polymer volatility."
Mr Langlands said the company was watching for the outcome of the forthcoming UK General Election particularly with the possibility of a referendum on leaving the European Union should the Conservative party remain in power.
He said: "We continue to monitor that very closely as we have a business in Europe and we export a considerable amount from the UK into European countries."
John Lawson, from Investec, raised his rating on the BPI stock to a buy.
He said: "Management has put a lot of effort into improving the operational performance of the business and, together with an astute investment programme in all of its key geographies, further productivity gains should be realised in the coming years."
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