A statement from Shotton's parent company, UPM-Kymmene, said this week that the firm is “committed to the project to construct the new Recycled Fibre Pulp facility at Shotton Paper Mill in Wales. The company will collaborate fully with the UK Government and the European Commission to ensure that the project proceeds according to the original plan and time scale.”
The company will need an extra 320,000 tonnes per annum of used newspapers and magazine and is confirming to local authorities that the supply situation is unchanged. The plant will reach full capacity by the end of 2003. Shotton managing director Martin Gale said that a reason for the statement from the company “is because a number of local authorities that are negotiating supply of recovered paper contracts with us have been asking about the implications of the Commission's announcement.”
Pushing forward
Mr Gale said that he could assure councils who will be supplying the plant with newspapers and magazines that the situation has not changed “and we are pushing forward on the basis that the grant is forthcoming.”
And, he confirmed that the project will still go ahead even in the event that the European Commission turned down the WRAP funding.
Emphasising to local authorities that Shotton is able to confidently enter into contracts with Mr Gale said the firm had already committed nearly 30 million in capital expenditure on the new “pulp mill” and it would not be cost effective to scrap the project. “We are now at the point that to simply go back and fill in the ground would not be cost-effective because of the money we have been spent. It has all been spent in good faith in terms of the advice we have been given.”
The decision by the Commission to formally investigate the legality of the WRAP grant, which is worth about 23 million to Shotton, surprised UPM-Kymmene.
Mr Gale said the company considered it had a very sound case for the grant and had responded to a “UK government initiative. We simply responded when the government said 'here is an initiative'. We put our hands up and were successful.”
Environmental project
Shotton remains optimistic that it will receive a grant. The investigation by the European Commission is being carried out under its state-aid remit and also on environmental grounds. Mr Gale said that if it was decided that the newsprint recycling project was not an environmental project “I would struggle to understand what is”.
In the event that the European Commission was to reject the grant Shotton would reassess its spending programme to meet the funding shortfall, explained Mr Gale. “This could see elements of the project outside of the immediacy of the pulp mill, which is the bulk of the project, being delayed as we don't need to commit to this new capital equipment yet.” The equipment concerned includes the way sludge might be dealt with and other aspects of the waste management side of the process.
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