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RPC expands UK ops on retail promo pack trend, posts record profits

By Rory Harrington , 13-Jun-2012
Last updated on 18-Jun-2012 at 16:39 GMT

RPC has unveiled multi-million pound plans to expand its UK operations to tap into the growing trend from retailers for promotional packs and announced record full year net profits as the addition of Superfos accelerates earnings.

The UK-based rigid packaging giant told FoodProductionDaily.com this week that it would be enlarging the footprint at its facility in Blackburn, England thanks to an investment of £4m (€5m) as part of a strategy to meet growing demand from UK supermarkets for promotional packs.

The firm has already broken ground on a 113,000 square foot (10,500 sq metre) warehouse project that will enhance its operational efficiency in meeting the demand for this pack type from major retail players.

RPC makes plastic containers for soups and sauces, as wells a paint cans at the site in Darwen, in the North West of England. The company said it was able to launch the scheme after receiving planning approval for a new manufacturing, warehousing and distribution centre at Haslingden Road plant.

The expansion, scheduled for completion by this autumn, will see the creation of 30 new jobs.

“This move is all about an efficiency drive and allows us to respond better to supermarket demand for promo packs – which is becoming an increasingly important part of the market,” said plant manager Andy Bloor. “When a supermarket decides it wants a particular promotional pack, our ability to produce it is based on run in times.”

He added that these were becoming shorter and shorter as supermarkets demanded ever-greater flexibility and speed of turnaround from their packaging suppliers.

Previously, the company had used an outside storage facility. Having an off-site warehouse meant extra travelling and haulage times which in turn inflated the time taken to respond to orders, he explained.

Record results, move away from glass and metal

In a further positive development, RPC also posted strong financial results for the full year ending 31 March, 2012 – with revenues and profits climbing steeply.

The firm, which claims to be Europe’s leading rigid packaging player, said revenues jumped 37% to £1.13bn thanks to a combination of the addition of Danish outfit Superfos, which it acquired in February 2011 for £205m, and organic growth of 5%.

The continued move away from glass and metal to plastics in food packaging had also boosted demand – particularly in its UK blow-moulding operations, it said.

“The Corby business has particularly benefited from the strong demand for barrier blow moulded plastic jars and bottles as manufacturing capability and technological innovation is helping to accelerate the conversion of conventional glass and metal packaging to lighter weight plastic,” said RPC.

Adjusted operating profit, excluding costs associated with plant closures, improved by 68% to £93.5m (2011: £55.8m). The non-adjusted figure saw the firm post a £73m profit – almost double the amount in the previous year.

These charges included a £6.4m bill for the closure of the former Superfos plant in Runcorn, UK.

Further costs of £12.6m had been incurred following its decision to exit the vending cup market, announced at the start of 2012. These related to redundancies and plant closure, with the company warning that it would suffer more costs in the current financial year.

RPC also proclaimed a record net profit of almost £45m, compared to £26m in 2011.

“The Superfos business has been successfully integrated and has made a significant contribution whilst the growth in higher added value products continued,” said company chairman Jamie Pike.

Chief executive Ron Marsh also hailed the positive effect of the £10m post-merger savings achieved as a result of the introduction of a centralised polymer purchasing strategy and other overhead economies.

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