Sonae consults on future of chipboard factory

Workers at the Sonae chipboard factory in Knowsley arebeingconsulted onthe future of the plantand its possible closure in whatcould bea huge blowto the wood recycling sector.

The news from the UKs largest recycler of waste wood comes today (July 27) as the wood recycling sector is already suffering from a lack of demand for waste wood (see letsrecycle.com story). Theclosure of the Knowsley plant, whichrecycles 400,000 tonnes of waste woodchip a year into chipboard, would onlymake matters worse.

In a statement, Sonae Industria (UK) said that a consultation would begin next week with the plants 220 employees and trade unions. Under employment law, employers must consult with their workers for ninety days if they are planning on making redundancies to see if there are any alternatives.

Delays

Sonae said the decision to commence consultation, taken by its parent company, the Portuguese company Sonae Industria Group, was a result of the long delays to the reconstruction of the factory due to political and planning difficulties. This has resulted in reduced and unsustainable capacity levels which, in the challenging economic climate, have made it necessary to consider future options in relation to the plant.

Planning difficulties include an ongoing delay in a decision being made by Knowsley council on whether to grant the company planning permission to replace a building which was damaged by a fire at the site in June 2011.

On the political side,Sonae has meanwhile come under fire fromlocal MP George Howarth who has long been calling for the Knowsley plant to be closed down amid anumbers of incidents at the siteincludingseveral fires and the death of two workers in December 2010 (see letsrecycle.com story).

Sadness

Commenting on the decision to consult with staff, Nigel Graham, managing director, Sonae Industria (UK) Ltd said: It is with great sadness and regret that after 12 years of operating in Knowsley, consultation will commence on the future of this factory.

This will affect us all. It will be of little consolation, but at this difficult time, I would personally like to thank our loyal workforce for their ongoing hard work, loyalty and dedication. We will be focussing on talking to employee and union representatives, customers and suppliers regarding the next steps.

Sonae said that if the plant did close, Knowsley council would lose 700,000 in business rates, with 500 indirect jobs potentially lost on top of the 220 staff working at the site. It is expected that some of these may be wood recyclers who supply the plant.

The company is currently in the process of talkingto as many of itscustomers and suppliers about what the consultation might mean for them.

Capacity

The Knowsley plant has been operating at below capacity since the June 2011, with it only beginning to take in waste wood at the start of this year (see letsrecycle.com story). This has been cited as one of the factors that the waste wood market at present is swamped, with some wood recyclers turning wood away from their yards.

A spokeswoman for Sonaestressed that all options would be considered during the consultation process, with closure just being one of them.