The appointment of KPMG comes after the paper mill, which makes recycled newsprint, told staff yesterday that it was seeking to go into administration.
News of the appointment of KPMG will confirm fears within the recycling sector that it is likely to lose Aylesford which is one of three newsprint mills in the UK. The other two are UPM in North Wales and Palm in Kent.
[UPDATED: 15:50 February 24 with Administrator’s statement]: KPMG said: Allan Graham and Rob Croxen from KPMG have been appointed as administrators to Aylesford Newsprint Limited on Tuesday 24 February 2015. The business is a newsprint paper manufacturer that annually produced on average 400,000 tonnes of recycled newsprint from 500,000 tonnes of recycled waste fibre. The firm, which supplied its newsprint to some of the main newspaper groups, employed nearly 300 people and recorded a turnover of £139m in 2013. Upon appointment of the administrators, the production facility was closed and 233 employees made redundant. The remaining 65 staff have been retained to assist the administrators in the sale of the assets and the decommissioning of the plant.
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.”
Local MP
Local MP Tracey Crouch today put part of the reason for the difficulties at Aylesford down to cheap imports of paper from Russia and the fact that residents are contaminating mixed recycling.
Aylesford is a major buyer of used newspapers and magazines from local authority sources and produces about 400,000 tonnes of newsprint a year.
Yesterday (Monday), lorries were queuing outside the mill with uncertainty over whether deliveries were to be made or not (see letsrecycle.com story). Local authorities, especially in southern England who use Aylesford, are understood to be assessing the situation in talks with their contractors.
MP meeting
Local MP Tracey Crouch, MP for Chatham and Aylesford, said today that she had met with Business Minister Matthew Hancock.
Miss Crouch said: “The department had not been given any prior notice of the decision to appoint administrators. It is illegal for a company to operate insolvent so ANL have gone through the right processes in terms of administration. Until the administrators are formally appointed it is difficult for me as a local MP or the Minister to fully understand the scale of the problem at ANL and what therefore can be done. It is unclear at this stage whether ANL will go into liquidation (full or partial), if it will be subject to takeover (full or partial) or what will happen to the assets (full or partial). Those discussions will occur but it may be 3 months before that is knows. It could be sooner but no-one knows at this stage.”
The MP added that the local job centre has already moved to provide advice for affected staff and that local authorities in the area may not have their Aylesford bring banks emptied.
Russia
Miss Crouch also accused Russia of “flooding the continent” with cheap paper and contamination by residents of commingled materials as reducing paper quality which had affected the mill. Aylesford, with its proximity to France, is thought to have been exporting to newsprint as well as supplying the UK newspaper industry while Russia has, for a number of years, been supplying material at low prices, or even ‘dumping’ paper according to some sources.
Commenting on the reasons behind Aylesford’s situation, Miss Crouch said: “The newspaper industry has declined meaning less need for newsprint. In addition the price of paper has fallen, the Russians are flooding the continent with cheap paper, it is a highly taxed industry because of its energy consumption, and with on-going fluctuations in the Euro it is making it difficult for export/import market growth. In addition we, as resident recyclers (and I recognise I am about to make a sweeping statement) make recycling expensive but contaminating our waste. Comingling (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.”
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