Soaring energy cost puts UK plastics industry, jobs at risk: BPF

London (Platts)--8Feb2006

Soaring cost of energy is putting the industry as well as thousands of
jobs in the UK'S plastics industry at risk, the British Plastics Federation
said Wednesday. Peter Davis, chief executive of the BPF, said a survey
recently carried out amongst member firm revealed that 44% of companies were
not able to pass on the increased energy costs to their customers in their
selling prices.

     "Last October, member firms incurred average increases of 58% for gas and
56% for electricity. Many firms were faced with a staggering 100% rise.
Companies will go to the wall if they cannot secure any relief from this,"
said Davis. "Meanwhile our competitors in Europe, with un-liberalized energy
markets, are paying less and are rubbing their hands at our loss of
competitive advantage," Davis said.

     The UK's Plastic Industry has been used as a reliable indicator for the
performance of British business as a whole. "This is a GBP20-bil ($35-bil)
turnover sector whose products help customer industries become more
efficient," said Davis. "Yet recent energy increases, with more in the
pipeline, are pushing it to the edge of a precipice."

     On questions regarding employment, 48% of respondents to the survey said
that they were being forced into making redundancies by an average of 6.5% of
their workforce, adding up to as many as 7,000 jobs were in danger in the UK
plastics industry. 

     The survey furthermore revealed that 54% of companies have scaled down
their investment plans by an average value of 31% as they struggle to pay
their energy bills. Davis commented that investment in the industry had
already declined to historically low levels and that many companies were
cutting costs to the bone just in order to survive.
     
	     --Alex Konstantinoff, newsdesk@platts.com

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