Packaging firm battles rising costs

The maker of packaging for Jaffa Cakes and Fruit Pastilles today said it was on course to improve profits, despite pressure on the business from rising costs.

The maker of packaging for Jaffa Cakes and Fruit Pastilles today said it was on course to improve profits, despite pressure on the business from rising costs.

Chesterfield-based Robinson, which has 400 staff, also manufacturers packaging for products such as Gillette shaving foam.

Robinson has had to cope with a 12% increase in plastic resin costs compared with a year ago, as well as a jump of more than 50% in electricity prices.

But the firm showed a £20,000 (€25,254) profit after tax in the six months to June 30 compared with an underlying £151,000 (€190,677) loss last year, after cutting manufacturing expenses and successfully passing on the increased costs.

Robinson dates back to 1839 and was family-owned before floating in 2004. Its roster of clients includes consumer giants Procter & Gamble and Unilever, as well as Dairy Milk firm Cadbury and Goodfella’s pizza maker Northern Foods.

The business, which held the contract to make the lids to Pringles snacks until last year, has looked to improve profitability by shunning low-margin UK business and transferring work to its base in Lodz, Poland.

Although the exit from these less lucrative deals cost it £2m (€2.5m) in revenues from its plastics division, Robinson partially offset this with £1m (€1.26m) in new work for its paperboard making operation.

Chairman Richard Clothier said: “The seasonality of our market normally results in stronger revenues in the second half of the year and we anticipate this will be the case in 2008. However, the increasing input costs will continue to place pressure on margins.

“The group’s establishment in Poland continues to provide the scope for profitable growth. Overall, we expect continued improvement in the profitability of the business.”

As well as its Chesterfield headquarters, the company has Nottinghamshire bases in Kirkby-in-Ashfield and Stanton Hill and a manufacturing facility in Toronto, Canada.

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