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Flexibles hit hard by production moves

The UK plastic films industry faces increased imports and has been hit hard by the erosion of the traditional customer base as companies move from their manufacturing facilities out of the UK into lower cost, less regulated areas says PIFA’s annual review.

Economic difficulties prevailing in mainland Europe led to an increase in excess capacity with overseas converters that resulted in many quoting very low prices into the sterling-strong UK.

The report also states that overall manufacturing output in 2001 fell by 4% – the worst performance since 1991.

Imports from the Asian economies, which benefit from polymer prices consistently 20-30% lower than in Europe, continued to rise. A 15.3% increase of imports from the Far East and Pacific Rim amounted to 33 169 tonnes of mainly plastics bags and sacks. Malaysia alone accounted for almost half the rise while imports from China also rose sharply.

Similar trends were noted with the industry’s retailer customers who are increasingly seeking to source basic products outside the UK.

The PIRA report on the packaging industry records 20 major plant closures in the period 1998-2000 and a further 13 closures in 2002.