Rising energy costs are pushing the UK plastics industry “to the edge of a precipice” warned UK’s plastics trade association.
A recent survey conducted by the British Plastics Federation (BPF) found that 44% of its member companies weren’t able to pass on the increased energy costs to their customers.
The BPF said that last October its members faced average price increases of 58% for gas and 56% for electricity – and some faced increases of 100%.
BPF chief executive Peter Davis said: “Companies will go to the wall if they cannot secure any relief from this. Meanwhile our competitors in Europe, with unliberalised energy markets are paying less and are rubbing their hands at our loss of competitive advantage.”
Adding to the gloomy outlook, almost half the companies surveyed said they were forced to make redundancies due to the sharp increase in energy costs. The BPF said the cumulative effect of many small scale redundancies across the industry amounted to about 7,000 jobs lost across the sector.
Future investment is also likely to take a hard knock – over half those surveyed said their companies had scaled down investment plans by about a third as they struggled with paying energy bills. And about one in ten firms were seriously looking at relocating their manufacturing to elsewhere in the world.