BRITISH POLYTHENE INDUSTRIES
Agreement to buy Wavin's film and sack business / 1996 "year of steady progress"
The long-awaited move into mainland Europe has finally been made by Europe's leading polyethylene film extrusion company, with the announcement in the company's annual results, that British Polythene Industries PLC (BPI, 96 Port Glasgow Road, GB-Greenock PA15 2RP) has reached an agreement in principle with Wavin BV (PO Box 173, NL-8000 AD Zwolle) to acquire its industrial film and sack businesses. Neither development comes as any great surprise. Wavin has been divesting its non-pipe operations, while BPI, which has built a formidable position through its acquisitions in the UK market, has long been expected to make a purchase on the European continent.
The announcement follows a year in which the company reported steady progress, but with mixed results for some of its divisions, reflecting the highly competitive nature of many polyethylene film markets. Overall turnover was up 17% to GBP 412m (GBP 352m) with a 16% increase in operating profits to GBP 34.5m (GBP 29.7m).
The retail bag businesses of Alida Packaging and Bibby & Baron, which account for around 10% of turnover, predominantly in sales to supermarkets, had a poor second half year, caused by imports eroding market share. Although BPI can combat these imports through its Chinese subsidiary, some "significant restructuring" of UK operations is expected with further rationalisation within the Retail Division. Its recycling division too was hampered by delays in the introduction of the Producer Responsibility Regulations in the UK. Post-consumer waste tonnage for the year increased to 22,100 t but there is unutilised capacity of at least 5,000 t.
BPI continued its fast pace of acquisition during the year adding 11 further businesses. The company also increased its stake in its Chinese joint venture operation in Xinhui to 80% and plans to double this plant.
READER SERVICE: Preliminary results for British Polythene Industries PLC (English): PIE-No. 40654.
Plasteurope.com Comment:
Is it a coincidence that BPI has waited until the pound is at its strongest for years before finally making its move into Europe? The company has built its position as Europe's leading polyethylene film producer by a series of astute purchases, and the decision to buy Wavin's industrial film and sack operations in Belgium and the Netherlands looks in keeping with that tradition. BPI already dominates the heavy duty sack market in the UK, while Wavin has its own proprietary f/f/s technology for sacks which can now be used by BPI's UK operations, as well as opening up markets for it on the Continent. The question now is where next? Given its tradition of growth through acquisition and the troubled state of many film operations throughout Europe, further opportunities for the group to expand in Europe are bound to arise. However, with many polyethylene film products becoming increasingly uneconomic to produce in Europe, the group may prefer to expand its Asian presence.
The announcement follows a year in which the company reported steady progress, but with mixed results for some of its divisions, reflecting the highly competitive nature of many polyethylene film markets. Overall turnover was up 17% to GBP 412m (GBP 352m) with a 16% increase in operating profits to GBP 34.5m (GBP 29.7m).
The retail bag businesses of Alida Packaging and Bibby & Baron, which account for around 10% of turnover, predominantly in sales to supermarkets, had a poor second half year, caused by imports eroding market share. Although BPI can combat these imports through its Chinese subsidiary, some "significant restructuring" of UK operations is expected with further rationalisation within the Retail Division. Its recycling division too was hampered by delays in the introduction of the Producer Responsibility Regulations in the UK. Post-consumer waste tonnage for the year increased to 22,100 t but there is unutilised capacity of at least 5,000 t.
BPI continued its fast pace of acquisition during the year adding 11 further businesses. The company also increased its stake in its Chinese joint venture operation in Xinhui to 80% and plans to double this plant.
READER SERVICE: Preliminary results for British Polythene Industries PLC (English): PIE-No. 40654.
Plasteurope.com Comment:
Is it a coincidence that BPI has waited until the pound is at its strongest for years before finally making its move into Europe? The company has built its position as Europe's leading polyethylene film producer by a series of astute purchases, and the decision to buy Wavin's industrial film and sack operations in Belgium and the Netherlands looks in keeping with that tradition. BPI already dominates the heavy duty sack market in the UK, while Wavin has its own proprietary f/f/s technology for sacks which can now be used by BPI's UK operations, as well as opening up markets for it on the Continent. The question now is where next? Given its tradition of growth through acquisition and the troubled state of many film operations throughout Europe, further opportunities for the group to expand in Europe are bound to arise. However, with many polyethylene film products becoming increasingly uneconomic to produce in Europe, the group may prefer to expand its Asian presence.
15.03.1997 Plasteurope.com [19492]
Published on 15.03.1997