According to Macfarlane chief executive Peter Atkinson five redundancies have been made following the removal of old kit.

Industry rumours had been circulating that the plant had a tough first quarter of the year and that profits were significantly reduced.

Atkinson admitted that the market was tough but added that this was the same for packaging as a whole.

"The redundancies are relatively small, with five people out of a workforce of just over 100," he said. "The packaging market in general is tough."

Despite the redundancies the group has claimed that overall trading is "progressing satisfactorily". Speaking at Macfarlane's AGM, chairman Archie Hunter said that the results "gave encouragement that the recovery was gaining momentum" in the first four months of 2005. The group's interim results for this year will be released in August.

By Philip Chadwick