Raw material increases cost £45 million
Sales at British Polythene Industries were up 12 per cent to £478 million.
The packaging company saw pre-tax profits rise from 311.8 million the previous year to 316.7 million in 2010.
However raw material costs rose by £45 million and BPI warned it has had to pass on price increases to customers.
Total volume of product produced was up slightly to 280,000 tonnes due to some recovery in demand from the the construction and industrial sectors coupled with robust sales of agricultural stretch-film.
Net debt was reduced by more than £6 million mainly due to the sales of two vacant facilities in England.
A £55 million credit facility which was due to expire in November of this year has been renegotiated to £70 million with the bulk of it not due to be paid until 2015.
Cameron McLatchie, chairman, said cost pressures will continue to affect performance in 2011.
He said: "We are entering the main agricultural film season and currently anticipate that it will match or exceed performance for 2010, but the final result will depend on the growing conditions over the next few months.
"The construction sector, which was showing some modest signs of recovery last autumn, has had a difficult winter and we will not get a clearer picture of demand until winter is completely behind us.
"Margins are currently under considerable pressure due to increased raw material costs but these increases are being passed on to customers as quickly as possible.
"We have commenced the year well, with better than anticipated sales of agricultural stretch-film, as customers become aware of rising raw material prices. 2011 will not be easy but we have made a good start."
It was also confirmed Ron Marsh, chief executive of the RPC Group and a director of the Packaging Federation, has joined BPI as a non-executive director.
BPI has its headquarters in Greenock and also has sites at Ardeer, Ayrshire, and in Dumfries.