Materials

233 staff made redundant at Aylesford

The majority of the 300-strong workforce at newsprint manufacturer Aylesford Newsprint Limited has been made redundant, following news that the company has entered administration.

It was revealed yesterday (23 February) that the Kent-based company, which produces around 400,000 tonnes of recycled newsprint every year, was applying to go into administration.

233 people made redundant

Accountancy firm KPMG confirmed this afternoon (24 February) that two of its employees, Allan Graham and Rob Croxen, have been appointed as administrators to Aylesford Newsprint Limited.

Upon appointment of the administrators, the production facility was closed and 233 employees made redundant. The remaining 65 staff have been retained to assist the administrators in the sale of the assets and the decommissioning of the plant. 

Allan Graham at KPMG, said: “Significant overcapacity in the newsprint market, coupled with rise of digital media, has created challenging operating conditions for Aylesford Newsprint. The business has been loss-making for a number of years and was unable to be maintained as a going concern.

“We are on site and will be working closely with the Redundancy Payments Office to support the staff impacted by the administration.”

A commenter on the KentOnline website, writing under the alias ‘empoyee2015’ and purporting to be one of Aylesford's employees, also claimed that workers have been told they will not be paid for their last month’s work. However, Resource has received confirmation from the administrators that all salaries will be paid up to the end of February.

All machinery was also said to have been turned off this morning, and lorries delivering paper loads are reportedly being turned away.

Business Minister Matthew Hancock offered his sympathies to those at Aylesford, saying: “This is clearly a very distressing time for those involved. We have already made contact with the local council to offer our support and will work with them and other local partners, such as Jobcentre Plus, to help those facing redundancy find new jobs.”

Ray Georgeson, Chief Executive of the Resource Association - a trade association for the reprocessing and recycling industries and their supply chain, of which Aylesford Newsprint is a founding member - said: "We wish to express our sadness at the news of the closure of the Aylesford newsprint mill and we offer our thoughts to all our friends at Aylesford Newsprint who have lost their jobs, many of whom we have been proud to work with for many years.

"Self-evidently, the closure of the mill will have a significant impact on UK recycling in both the short and longer term. For now though, our attention is solely on our friends and colleagues that have lost their jobs.  The political and strategic consequences and the lessons that need to be learned by recycling policy-makers and politicians are an urgent priority as we reassess what is needed to nurture a sustainable recycling industry. We will play our role in this discussion, but that is for another day, not today.”

Georgeson also acknowledged and thanked Aylesford for 'their vision in supporting the launch of the association' in 2011 and their 'stalwart support' to date. He particularly thanked former Managing Director Ian Broxup (who was a founding Board member) and Head of Recycling Gemma Stapeley for their successive service to the RA Board. 

Reasons for administration move

Owners, market and government blamed for Aylesford administration
Defra minister Lord de Mauley (third from left) toured the Aylesford plant in 2012

As well as financial losses, there have been reports that a range of other factors have impacted the business, including:

  • a lack of investment at the facility by the owners The Martland Holdings LLC; a lack of government support;
  • the ongoing decline of newspaper sales (and thus reduced demand for newsprint);
  • oversupply of newsprint manufacturing;
  • difficulty in securing high-quality paper recyclate (in part due to co-mingled recycling collections);
  • low paper prices; and
  • competition from overseas markets.

However, questions are also being asked about the owners’ motives in buying the company several years ago, with rumours circulating that the acquisition could have been down to the value of the land on which the paper plant sits.

Co-mingling is part of the problem

Local politician Tracey Crouch, MP for Chatham and Aylesford, commented: “Sadly this news came out of the blue for many. While people understood and recognised that the company has been operating in a challenging and internationally competitive market, I don't think anyone quite knew the scale of the problem.

“The newspaper industry has declined meaning less need for newsprint. In addition the price of paper has fallen, the Russians are flooding the continent with cheap paper, it is a highly taxed industry because of its energy consumption, and with on-going fluctuations in the euro it is making it difficult for export/import market growth. In addition we, as resident recyclers (and I recognise I am about to make a sweeping statement) make recycling expensive but contaminating our waste.

"Co-mingling (the act of not separating your recycled products) unfortunately cross contaminates products and that makes it a more expensive process to wash and clean waste materials and turn into paper... I will continue to press the government on [the issue of co-mingling] in terms of its wider waste policy.”

Find out more about Aylesford Newsprint.