The plastics operations of packaging group Rexam (London / UK; www.rexam.com) showed a fall in sales and earnings in the first half of 2011. As a result, the company has announced measures to remedy the weak business development in this segment, starting with price hikes, cost-cutting projects and capacity adjustments. In the medium term, the Plastic Packaging division will also shift some of its production to Asia because of increasing competition in China. Apart from that, there are plans to step up the level of automation. In Europe and Brazil, on the other hand, Rexam intends to invest in other growth areas such as make-up and dispensing systems.

In the first six months of 2011, sales of the Plastic Packaging division fell to GBP 472m (equivalent to EUR 544m) compared with GBP 490m in the same period last year. In Healthcare, pricing pressure affected earnings from primary packaging, while in the pharmaceutical business, inhaler sales were particularly low. Turnover in the Personal Care segment remained more or less at the 2010 level, although there were significant differences in the performance of the various businesses and regions. In Europe, new dispensing systems and lipsticks boosted sales while North American consumers increasingly opted for cheaper products with simpler packaging. In emerging markets, strong growth in Brazil was offset by weaknesses in the Asian business. High-barrier food packaging, on the other hand, won market share and grew sales by 13%.

The operating profit from the Plastic Packaging business declined in the reporting period to GBP 58m (EUR 61m), a drop Rexam attributes to the fact that the division was unable to pass on the increased resin costs directly to its customers.

The sale of the Closures business to Berry Plastics (Evansville, Indiana / USA; www.berryplastics.com) – see also Plasteurope.com of 21.06.2011 – is expected to be completed before the end of Q3. In the first half-year, the division's sales fell to GBP 153m (177m), while the operating loss doubled to GBP 16m.