TOUGH global trading conditions have hit profits at British Polythene Industries.

The company, which employs about 350 staff at Visqueen in Stockton, saw pre-tax profits fall from £16.2m for 2001, to £13.3m, in the year to last December.

Despite the fall in profits, the group has a good order book and remains confident about its future.

Cameron McLatchie, BPI chairman, said: "While all our businesses were profitable in 2002, the tough trading conditions, accentuated by unfavourable exchange rates, prevented them from fulfilling their full potential.

"Nevertheless, we remain very efficient compared with other manufacturers in our industry."

During the year, BPI closed two manufacturing facilities in Dublin and Rochdale, costing the group £2.1m. It also closed two sales sites in Newcastle and Glasgow.

Mr McLatchie concluded: "Although it is disappointing to report results lower than the previous year ... we have begun 2003 with a sound order book, an improvement in exchange rates and with a more efficient cost base.

"Trading conditions will remain challenging with raw material supply difficulties, but the group is in good shape and we are confident in its future."

The group expects to appoint John Langlands as chief operating officer in May.

The group will pay its shareholders a final dividend of 14p per share, taking the total dividend payment to the year to 21p per share.