The loss of Holcombe, which is expected by the end of 2008, continues a trend towards the closure of board mills in England and Wales such as East Lancs and Sudbrook and the planned closure of SCA's New Hythe mill in 2010.
The announcement of consultation with the Mondi workforce comes only ten days after Belgian-owned Rigid Paper of Selby said it was consulting with its workforce over the potential closure of its paper packaging mill in the Yorkshire town. The potential closures of the two northern mills are seen as confirming a move towards larger mills in the southern half of the UK, operated by Smurfit Kappa and St Regis, as well as plans for a new board mill in Manchester.
Energy costs
A statement from Mondi, which is an international paper and packaging group with revenues last year of 6.3bn Euros, gave rising energy costs against a backdrop of declining demand as reasons for the mill suffering operating losses.
Holcombe has two paper machines, 2.2m and 2.65m wide and both machines produce waste-based fluting and testliner and has had a strong place in the UK market, particularly in northern England. It has traditionally served converters for the retail sector and manufacturing industry.
Now it is thought that the 100,000 tonnes or more of material consumed by the plant will either be used in the UK or overseas. Both St Regis – which is part of the DS Smith Group that also owns Severnside Recycling – and Spanish firm Saica are expected to be interested.
The closure will come too early to be of immediate benefit to Saica (see letsrecycle.com story) which is to have its application for construction of a 400,000 tonne board mill in Partington in the borough of Trafford, considered by the council on October 9 2008. If approved – and there are said to be no objections – this will see construction starting by the end of the year for mill operation from October 2010.
St Regis
One mill that will be seeking additional material is the Kemsley site operated by St Regis (see letsrecycle.com story). It is developing additional capacity through using the former M-Real New Thames Mill at Kemsley Kent which should provide it with 260,000 tonnes of finished product.
By using the M-Real plant – which was used to make office paper – St Regis has said it will be adding capacity at a cost which is much cheaper than building a new machine. In the future Kemsley will produce over 850,000 tonnes per annum.
Rigid
VPK Packaging, the owner of Rigid Paper Ltd, have said that it is consulting on the future of its Selby Mill because Rigid is “suffering from the unfavourable conditions affecting the entire paper industry due to the increase in costs, primarily of energy.”
Rigid manufactures paper for packaging – in the 2007 financial year, the output of Rigid came to 70,000 tonnes and the firm's turnover was £15.4 million. A total of 86 people are employed at the site – the corrugated division of Rigid, located in Selby and Desborough, is not affected by this procedure.
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