The chief executive of British Polythene Industries (BPI) called for a shake-up of the regulation of energy markets as the company reported a fall in profits that followed a huge increase in the firm's electricity bills.

Complaining that swingeing rises in energy prices are causing huge problems for British firms, John Langlands said changes were needed to ensure that companies got a fairer deal.

With BPI also facing falling demand for its plastic sheeting from hard-pressed construction firms and rising plastic bills, the company has launched a review to try to boost returns from its UK plants.

The Greenock-headquartered manufacturer has four plants in Scotland, that employ around 400 people. Langlands said it was too early to say if this would result in any closures.

"I would not underestimate how much electricity prices cause significant problems to UK industry at this time," he told The Herald.

"I really do think something needs to be done with regard to regulating markets."

Langlands stopped short of calling for a windfall tax on utility firms but indicated he was very unhappy with the treatment business customers receive.

"When prices went up, the reason we were given was that oil prices went up.

"The oil price has fallen recently but we have not seen the same reduction in energy prices."

Asked how the regulatory system might be changed, Langlands said business users were required to commit themselves to supply contracts lasting more than one year.

"Lots of these are facing increases in prices of 100%-plus."

By contrast, residential customers could change suppliers in 28 days.

The pain caused by soaring energy prices was writ large in BPI's results for the six months to June, when pre-tax profits fell by £1.6m, 18%, to £8.8m, compared with the same period last year.

Electricity costs for the UK were £2.5m higher than in the first half of 2007, an increase of 50%.

The company said price increases would impact even more in the second half, with 2008 summer prices higher than last winter.

BPI was also squeezed by a 15% increase in the cost of the polymer which is its main raw material.

Tough times for construction firms impacted on sales. However, BPI did well in agricultural markets in the UK and overseas. In the UK, favourable weather conditions for growing grass boosted demand for silage covering.

Demand in the UK food and drink sector also increased. Key clients include stores giants Tesco and Wm Morrison.

While sales volumes were flat, turnover increased to £266m from £226m, as BPI managed to pass on some cost increases.

In his chairman's review, Cameron McLatchie said certain UK operations were not producing acceptable returns, largely because of changing demand patterns and the downturn in the construction sector.

"We are taking steps to bring our production into line with current customer demand." BPI recently closed a plant in Essex.

Langlands told The Herald the company was still deciding what actions to take. He said: "We will take all necessary action required to ensure the business produces acceptable returns."

BPI believes the range of markets it operates in should help it weather tough conditions this year.

The interim dividend is maintained at 7p per share.