Aylesford Newsprint goes into administration
Aylesford Newsprint, a paper manufacturer which specialises in recycling paper for reuse as newsprint, has gone into administration.
More than 200 staff have been made redundant at the Kent-based firm. A total of 65 staff have been retained to assist the administrators in the sale of assets and decommissioning of the plant. KPMG has been appointed as administrators of Aylesford Newsprint.
KPMG administrator Allan Graham said: "Significant overcapacity in the newsprint market, coupled with the 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."
Aylesford Newsprint manufactured around 400,000 tonnes of recycled newsprint from 500,000 tonnes of recycled fibre waste. It had a turnover of £139m in 2013. The production facility has now closed.
The news of Aylesford's administration follows last year's announcement that paper maker UPM was to permanently decommission one of its two newsprint machines at its Shotton mill in Deeside, which, prior to the decision had the capacity to produce 490,000 tonnes of newsprint.
The only other mill manufacturing newsprint in the UK is Palm Paper, which opened its 400,000 tonne (per annum) Kings Lynn, Norfolk mill in August 2009.
'Out of the blue'
The paper industry has expressed shock and sadness at the news.
Speaking to edie.net, Confederation of Paper Industries (CPI) director general David Workman said: "There is real sadness that this has happened, particularly for the employees of Aylesford. Many of the employees were members of the CPI. The decision has come out of the blue, so this is bound to have an effect on the recovered paper market. It will particularly affect the South East of England and those local authorities based in Kent."
Resource Association chief executive Ray Georgeson also expressed sadness at the news of the closure of the Aylesford Newsprint mill. He said the Resource Association offered its "thoughts to all our friends at Aylesford Newsprint who have lost their jobs, many of whom we have been proud to work with for many years".
Workman said that many factors could have contributed to Aylesford going into administration, including "imports of paper from Russia and Canada" and the "increase of value of the sterling against the dollar".
Elsewhere, in the short-term, prices for recycled paper are likely to fall and there could be an oversupply of recovered paper on the market, according to the paper industry.
Local Authority Recycling Advisory Committee (LARAC) chief executive Lee Marshall said his organisation would be "concerned about the ability of local authorities to find markets for all their paper and the drop in income that will also result".
He added: "In the long term, I am sure capacity and supply will even out but it does pose bigger questions about the ability of the UK to meet recycling targets without reliance on exporting materials as the reprocessing in the UK seems to be taking a bit of a hit at the moment and we are losing capacity across a number of materials."
360 Environmental director Phil Conran concurred with Marshall. He said: "It's very sad to see what has been a great institution for UK recycling disappear so suddenly. We have yet to see the real impact of this news. This was the great major user of UK news and pams (post-consumer mixed newspapers, periodicals and magazines). This could make it difficult for the paper industry in the UK in the challenge to meet our 2020 recycling targets."
However, Workman also said that the UK still produced a lot of recycled paper each year and that the sector was "still very viable". He explained: "There will continue to be a market for good quality recovered market. There will continue to be export opportunities for good material."
Future of UK recycling
Nevertheless, the Kent Resource Partnership (KRP), the council body representing the 13 local authorities across Kent, raised concerns over the future of the recycling sector in the UK following the collapse of Aylesford Newsprint.
In a statement, the KRP said that several Kent councils had deliveries of paper to Aylesford Newsprint. It said that "impacted councils are currently implementing urgent arrangements to ensure paper collected from Kent households continues to be recycled".
The organisation said it was very concerned that a national trend may be developing where recycling businesses are facing "such intense pressures" that they either "diminish operations or cease to continue"
KRP added: "Several materials recycled across the UK appear to have been impacted recently including the four prescribed in EU and national legislation - paper, plastic, glass and metal. Whilst there seems to be a wide range of pressures on each material stream which need to be better understood, the common goal must surely be to ensure that recyclates collected by councils have outlets to be recycled.
"Without a thriving UK recycling industry the KRP believes local economic growth and jobs may be at risk, especially in communities across the country hosting major recycling facilities such as those at Aylesford. In addition, achieving the national recycling target of 50% by 2020 would seem to be more within reach with a thriving UK recycling industry than would otherwise be the case."