Aylesford Newsprint’s paper mill facility has been closed and 233 employees have been made redundant following the appointment of KPMG as administrators today (24 February).
The remaining 65 staff have been retained to assist the administrators in the sale of the assets and the decommissioning of the plant.
The recycled newsprint paper manufacturer, which produced on average 400,000 tonnes of recycled newsprint from 500,000 tonnes of recycled waste fibre annually, made an application to go into administration yesterday.
It supplied newsprint to some of the main newspaper groups, employed nearly 300 people and recorded a turnover of £139m in 2013.
Allan Graham at KPMG, said: “Significant overcapacity in the newsprint market, coupled with rise of digital media, has created challenging operating conditions for Aylesford Newsprint. The business has been loss-making for a number of years and was unable to be maintained as a going concern.
“We are on site and will be working closely with the Redundancy Payments Office to support the staff impacted by the administration.”
“This news came as a shock, not just to the employees but to the market as a whole.”
David Workman, director general of the Confederation of Paper Industries, told MRW it was “a very sad day” and that the closure would affect the price of recycled paper.
“In the short term it might well drive the price down,” he said. “This news came as a shock, not just to the employees but to the market as a whole.”
“Between 2000 and 2010 we lost about half the mills in the UK, from about 100 to about 50. It was decade of carnage, really. We haven’t had, in the last four years, the closure of a major paper mill, so to a certain extent we hope this will be a one-off and not another bout of mill closures.”
Workman also warned councils could also be affected.
He said: “There are two issues, one is that it reduces the amount of newsprint available for UK consumption, because it basically only leaves Palm Paper and UPM as newsprint producer in the UK.
“That might, certainly in the short term anyway, result in increased imports of paper. But I think in terms of the other issue, which is the amount of recycled paper which Aylesford has up to now taken – it’s around 400,000 to 500,000 tonnes a year – the question arises what happens to that paper?
“I suspect that in the short term it will create one or two issues for some local authorities because Aylesford took a lot of their raw material directly from local authorities. That paper will probably end up in export markets.”
Workman said cheap imports from Russia and Canada, which undercut UK prices, was one of the factors that led to the closure.
“The Confederation of European Paper Industries are taking on board a number of trade dispute issues with Russia at the moment on a number of different areas,” he said.
Chatham and Aylesford MP Tracey Crouch said she had met with business minister Matt Hancock after learning of the company’s intention to wind up, and that she would liaise with unions and staff to discuss their future.
She echoed concerns over cheap imported paper from Russia and falling prices. Crouch also said contaminated household recycling was a factor affecting the market.
“Commingling, the act of not separating your recycled products, unfortunately cross contaminates products and that makes it a more expensive process to wash and clean waste materials and turn into paper.
“This is a much wider issue that I have become a bit of a geek on and will continue to press the Government on in terms of its wider waste policy.”
Number of staff redundancies at Aylesford Newsprint now confirmed. I’ve arranged for @MaidstoneJCP to meet staff onsite on Thurs.
— Tracey Crouch (@tracey_crouch) February 24, 2015
We express thanks to founder members Aylesford Newsprint & our sadness at today’s news; thoughts to our friends who have lost their jobs.
— Resource Association (@Res_Association) February 24, 2015
@MRWmagazine very sad for UK but most of all, employees. Does not bode well for future recycling rates.
— 360environmental (@360env) February 24, 2015