Wavin, a Dutch manufacturer of plastic pipes and fittings, yesterday reported a 6.5 per cent decline in operating profit at its Irish operations after the group was hit by an increase in raw material prices.

Irish operating profit fell to €9.7 million in 2004, as net operating costs rose by 17.2 per cent to €57.5 million. Most of the cost increase can be attributed to oil-based raw material costs, the company said.

Turnover at the group's Balbriggan, Cork and Lisburn, Co Antrim-based Irish operations, increased by 13 per cent to €67.2 million. The group cut its dividend by 25 per cent to €6 million.

"Plastic pipe and fittings production is largely dependent on oil-based raw materials," Larry Carr, Wavin Ireland's managing director, said in a statement accompanying the results. "The increased cost of oil in 2004, which continued into 2005, had a severe impact on our costs as the increase was carried through the system."

Still, Mr Carr said the future for the construction and civil engineering industries in Ireland remains positive and the demand for quality products in these sectors remains buoyant.

Wavin is Ireland's largest manufacturer and distributor of plastic pipes and fittings, and provides more than 3,000 products for the building, construction and farming industries, local authorities and state utilities.

Across Europe the group, which was founded in Holland in 1955, employs 4,500 people in 24 different countries. Total group sales increased 10 per cent last year to €1 billion, while net profit rose 24 per cent to €47 million.