Plastics and Rubber

Sector Payment Analysis: Plastics and rubber

As a senior analyst specialising in UK payment practices, I have conducted a comprehensive review of the financial habits within the Plastics and rubber sector. This study, based on a sample of 31 companies, reveals a payment culture that leans heavily towards extended settlement terms rather than prompt efficiency. The data indicates that the average payment time stands at 49.3 days, with a median of 50 days. This tight alignment between the mean and median suggests a highly consistent, albeit sluggish, payment culture across the industry. With a standard deviation of 14.1 days, there is relatively low volatility in the data, implying that suppliers can generally expect a wait of approximately seven weeks for settlement, regardless of which company they are trading with.

When we analyse the distribution of payment speeds, it becomes evident that the Plastics and rubber sector does not favour rapid liquidity. A mere 9.7% of the companies analysed (3 companies) manage to settle their accounts within the traditional 30-day window. Instead, the bulk of the sector is concentrated within the 'Moderate' to 'Slow' bands. Specifically, 67.8% of the sample falls between 31 and 60 days. Whilst it is positive to note that there are zero companies in the critical 90+ day category, the presence of 22.6% of firms in the 61-90 day bracket indicates significant cash flow friction. The interquartile range further supports this view, with the middle 50% of companies paying between 40 and 59 days, firmly establishing the sector's norm well beyond standard monthly terms.

A deeper look into the performance breakdown highlights the operational challenges suppliers may face. Despite the absence of extreme outliers over 90 days, the prevalence of late payments is a concern, standing at 35.1%. This suggests that even when companies organise their payments to fall within a 60-day window, they frequently miss agreed deadlines. The range between the fastest payer (27 days) and the slowest payer (82 days) is significant, yet even the 'best' performers are barely clearing invoices within a standard month. Stakeholders must realise that the 25th percentile sits at 40 days, meaning that even a top-quartile performance in this sector involves a delay beyond the typical 30-day expectation found in other UK industries.

Geographically, the sample shows a concentration in the North West (8 companies), followed by the South East and East Midlands (6 companies each). However, the consistency of the data suggests that payment behaviour is driven more by sector-specific capital working cycles than by regional location. In conclusion, whilst the sector avoids the most critical extremes of bad debt risk, the pervasive culture of slow payment requires suppliers to maintain robust credit control processes. Suppliers should anticipate a cash conversion cycle averaging around 50 days and structure their own working capital requirements accordingly to mitigate the impact of this delayed settlement behaviour.