More than an estimated 1 million in PRN revenue has failed to stem losses at the East Lancs paper mill and help keep it afloat.
A spokeswoman for the administrators Arthur Andersen today confirmed that production has ceased at the mill in Radcliffe, Manchester as they were unable to sell it as a going concern.
The administrators went in in January with the hope of selling the plant and about 40 redundancies were made then. Now 140 people are being laid off.
The spokeswoman said: “The losses at the mill were unsustainable and it is definitely closing.”
The plant produced coloured papers and lining papers and was a purchaser of various grades of recovered material including mixed paper and coloured grades.
Integrated and independent merchants which supplied material to the plant are also expected to be hit financially by the closure although names of major waste paper suppliers have not been released.
Peter Gaffney, of the Environment Agency, said that in 1999 East Lancs received 481,000 in PRN money. (PRNs are issued to account for packaging material, usually board, recycled in line with the packaging waste regulations). A similar amount of money is thought to have been absorbed by the mill last year and it also received PRN income in 1998. East Lancs used the income to support the collection infrastructure.
Mr Gaffney said that the Agency had no powers when a mill closed to take any further action with regard to PRNs. “We could only step in if the money was actually owed as a debt to us.”
Ray Watson, chief executive of the British Recovered Paper Association, said he was very sad to hear of further redundancies in the industry.
He estimated that the mill consumed about 50,000 tonnes of recycled material a year. “We hope that this additional tonnage in terms of waste paper is picked up in the UK.”