The company is aiming to significantly reduce its debt following a review of its operations by new chief executive Peter Atkinson who joined in October 2003. He now plans to go back to the basics of customer service, new business relationships and cost reductions.

That strategy is already bearing fruit, he said. With so many changes we had lost sight of our customers but we can now go out to new and existing ones with confidence.

There is not going to be any quick turnaround but the expectation for 2004 is significant performance improvements, said Atkinson.

Last year the group made redundancies and site closures reducing 45 local sites to 15 regional distribution centres. The reorganisation process cost Macfarlane 3.5m.

In 2002 Macfarlane saw a dramatic 90% plunge in profits for the first half of the year following a failed bid to take over its much larger rival British Polythene Industries (PrintWeek, 13 September 2003).

The companys full results for this year will be issued on 29 March.