Marco Baglione, the newly appointed CEO for plastic packager Astrapak, on Monday described the future as "challenging but exciting."

"It's a testing time – for Astrapak and plastic packaging generally," said Baglione in a statement.

Baglione was appointed CEO earlier this month after heading the group's Rigids division for six years. Predecessor Ray Crewe-Brown retired after 11 years at the helm.

Astrapak, which last month suffered a 35 percent decline in annual headline EPS to 69 cents, is grappling with soaring working capital costs as a result of ongoing polymer price increases.

The price of polymers, the principal raw material in plastics manufacture, has risen 50 percent in a year.

"It is tough to pass on increases of that magnitude, and it puts the margins of all converters under severe pressure," the company said.

Two years of rising interest rates have not helped. Last year, Astrapak's net interest costs rose by R27-million to R75-million as net debt increased by R274-million to R562-million.

"There are pressures, but a more streamlined Astrapak will also be in a position to exploit some strategic positives. We have made considerable capital investments," said Baglione.

"We are not afraid of change, and will innovate to draw benefit from our greater size," he said.

As part of the group's cost cutting strategies, Baglione announced the relocation of the firm's Sandton-based head office to its operation in Denver.

I-Net Bridge