Oil price forces packaging cuts

16 August 2005


Leading consumer products group Reckitt Benckiser says it has cut back on its packaging in an attempt to offset the rising cost of oil-derived plastics and take a more "environmentally-sustainable approach".

Speaking on unveiling the company's latest half year results chief executive officer Bart Becht said it had "re-engineered several products to take out much of the plastics", emphasising this would continue even if oil prices fell dramatically".

He said: "Using less plastic is more environmentally-friendly and helps our profit margin." Reckitt Benckiser is also reducing its display packaging; in some cases cardboard has replaced blister packs.

The British Plastics Federation, however, emphasises that higher oil prices affect all packaging manufacturing and says there could be "unforeseen negative impacts on the environment by cutting the use of plastic packaging".

It says plastics account for "a mere 4%" of the oil barrel, and plastics packaging "far less than this". In addition, while over half of all products are packed in plastics, they represent only 17% of all packaging by weight.

Matt Clements, BPF senior issues executive, says: "Studies have shown that, if all plastics packaging were made of alternative materials, the weight of packaging would increase four-fold, waste volumes three-fold and energy consumption would double."

Ron Marsh, chief executive officer of RPC Group, one of Europe's leading plastic packaging manufacturers, says: "I fully support Mr Becht if what he doing is cautioning plastics suppliers that there is limit to the rises industry can accept over a sustained period.

"However, of even greater concern to us is an impending electricity price rise of almost 100% due on October 1. Plastic packaging producers have always felt able to pass material prices on but this has never applied with energy price rises. Electricity accounts for a typical 3-4% of a typical plastic packaging converter's overall costs."

  



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