Soaring gas prices will lead to 7,000 layoffs in plastics sector - Sunday Times - Times Online
Soaring gas prices will lead to 7,000 layoffs in plastics sector - Sunday Times - Times Online
BRITAIN’s plastics manufacturers, which make goods as varied as toys, bottles, artificial hips and car bumpers, will this week warn energy minister Malcolm Wicks that 7,000 jobs are at risk in the industry because of crippling energy costs.
The British Plastics Federation (BPF), the industry association that represents 300 companies, is writing to Wicks tomorrow to request an urgent meeting, prompted by the soaring cost of gas on the wholesale market.
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A copy of the letter, seen by The Sunday Times, said: “The energy cost increases alone could well lead to the loss of 7,000 jobs and over half our companies are reducing their UK investment plans.”
The BPF, whose biggest members include the packaging groups RPC and Linpac and automotive and engineering plastics provider McKechnie, is urging the government to investigate the price rises. It wants the government to “fight hard” for full liberalisation of European energy markets, which the European Commission recently slammed as “distorted”.
The BPF said energy bills now typically accounted for over 10% of its firms’ total costs as opposed to 3% before the energy-price spikes first occurred in 2004. Many plastics companies coming out of three-year supply contracts were seeing the price of new deals doubling, according to BPF director-general Peter Davis. “This has knocked everyone sideways,” he said.
Davis said he was alarmed at the impact on his members because they were not heavy consumers of energy. He said: “We are a barometer for what is going on. This affects every sector of the UK economy and every industry.”
Any job losses would be across the board, he said. “This could drive some companies down to the level where they make little or no profit.” Jobs could be lo to southeast Asia.
The rubber industry has also lent its name to the letter. Together plastics and rubber companies in Britain employ 250,000 people and turn over £20 billion a year in sales.
There is a call for immediate suspension of the climate-change levy — which adds 12% to their energy bills — for the duration of the crisis, which is likely to last until the end of next winter when new gas pipelines to Britain come on stream.
The government is also being urged to develop new infrastructure now that the country has become a net importer of gas.
BRITAIN’s plastics manufacturers, which make goods as varied as toys, bottles, artificial hips and car bumpers, will this week warn energy minister Malcolm Wicks that 7,000 jobs are at risk in the industry because of crippling energy costs.
The British Plastics Federation (BPF), the industry association that represents 300 companies, is writing to Wicks tomorrow to request an urgent meeting, prompted by the soaring cost of gas on the wholesale market.
NI_MPU('middle');
A copy of the letter, seen by The Sunday Times, said: “The energy cost increases alone could well lead to the loss of 7,000 jobs and over half our companies are reducing their UK investment plans.”
The BPF, whose biggest members include the packaging groups RPC and Linpac and automotive and engineering plastics provider McKechnie, is urging the government to investigate the price rises. It wants the government to “fight hard” for full liberalisation of European energy markets, which the European Commission recently slammed as “distorted”.
The BPF said energy bills now typically accounted for over 10% of its firms’ total costs as opposed to 3% before the energy-price spikes first occurred in 2004. Many plastics companies coming out of three-year supply contracts were seeing the price of new deals doubling, according to BPF director-general Peter Davis. “This has knocked everyone sideways,” he said.
Davis said he was alarmed at the impact on his members because they were not heavy consumers of energy. He said: “We are a barometer for what is going on. This affects every sector of the UK economy and every industry.”
Any job losses would be across the board, he said. “This could drive some companies down to the level where they make little or no profit.” Jobs could be lo to southeast Asia.
The rubber industry has also lent its name to the letter. Together plastics and rubber companies in Britain employ 250,000 people and turn over £20 billion a year in sales.
There is a call for immediate suspension of the climate-change levy — which adds 12% to their energy bills — for the duration of the crisis, which is likely to last until the end of next winter when new gas pipelines to Britain come on stream.
The government is also being urged to develop new infrastructure now that the country has become a net importer of gas.
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