Public services company Accord has a streetcare contract with Gloucester City Council that includes street cleansing, ground maintenance and recycling.
Accord will collect source segregated material from 52,000 households using a three-compartment collection vehicle to keep the paper separate.
It expects to supply Aylesford, which produces 100% recycled premium newsprint, with up to 5,000 tonnes of good quality recovered fibre each year.
Accord commercial director Richard West said: Paper is the only material that will ensure a guaranteed price, revenue stream and market. It is also the largest component in the waste stream and so it was significant that we obtain the best possible contract for this resource.
Aylesford newsprint area manager, Karen Newell, said there were many factors that had to be taken into account to secure a contract of this type. She explained: Although local authorities and waste management companies are all trying to achieve the same goal of maximum diversion, they have different resources and key considerations.
Accord is working with the council to achieve 50% recycling by 2008/9 and motivated by this plans to introduce alternate week residual waste collections.