The UK operations of pulp and fine paper business Arjowiggins have been placed into administration.
The trading companies within the Arjowiggins UK business, all of which entered administration today (15 January), include Arjowiggins Fine Papers, Arjowiggins Chartham, Performance Papers, Arjobex and the Wiggins Teape Group.
Iain Fraser, Tom MacLennan and Geoff Rowley of FRP Advisory have been appointed as joint administrators of Arjowiggins Fine Papers, which operates the 489-staff Stoneywood Mill in Aberdeenshire and a 29-staff distribution depot in Basingstoke.
Meanwhile, Rowley and MacLennan have been appointed alongside Phil Reynolds as joint administrators of Arjowiggins Chartham, which operates the 90-staff Chartham Mill in Kent.
Across the other sites, 11 people work at Performance Papers in Manchester, 48 people work at Arjobex in Clacton on Sea, Essex and seven people work at the Wiggins Teape Group in Manchester.
The UK companies are part of the Creative Papers division within French parent company Sequana. The administrations of the UK businesses follow the opening last week of receivership proceedings for some of Arjowiggins’ French subsidiaries by the Commercial Court of Nanterre.
This came after the group’s planned €125m (£112m) deal to sell Arjowiggins’ €528m-turnover Graphic and Creative Papers businesses to Dutch firm Fineska fell through after the buyer pulled out due to deteriorating market conditions.
The administrators said there are no immediate plans for redundancies in any of the UK businesses, but that this position “will continue to be assessed”.
Rowley said: “Rising pulp prices and energy costs have made trading conditions extremely difficult in this market and the insolvency proceedings begun in France left the directors no option but to place the UK businesses of Arjowiggins in administration.
“We will continue to trade the businesses whilst seeking buyers and would urge interested parties to make contact as soon as possible.”
In a separate statement released earlier today, Sequana said that “under the aegis of administrators, these procedures will help support the measures undertaken to find buyers for Arjowiggins’ businesses”.
Union Unite, which has about 600 members at Arjowiggins, said it believes the administration was triggered by problems experienced by Sequana, which has been involved in a costly legal dispute with British American Tobacco (BAT).
Unite national officer for the paper industry Louisa Bull said: “Arjowiggins is a vibrant and innovative creative paper company, and we can see a bright future as it is an attractive proposition for a potential buyer.
“Unite is committed to working with the administrators and the employers’ body, the Confederation of Paper Industries, to find a new owner.
“We have had a good relationship with the company over many years and this is a good basis for exploring options for a new purchaser.”
She added: “The administrators being called in should be seen in the context of the parent company Sequana’s past legal problems. It is not related to Brexit uncertainty.
“However, we appreciate that this is a very difficult time for our members and their families, and Unite will be giving them maximum support in the days and weeks ahead.”
Unite industrial officer for the Aberdeen mill Tommy Campbell called the situation “an anxious time for staff at the plant, and for the local economy of the north east of Scotland”.
He said: “Stoneywood has been a very successful business for almost 250 years, and these workers and their families deserve a future after contributing the most into making this site a profitable and continuous success for generations.”