300 Axed At Paper Mill

27 April 2015, 16:19

More than 300 workers have been made redundant at a paper-making firm after it was plunged into administration.

Tullis Russell Papermakers, based at Markinch in Fife, called in administrators after experiencing a long-term decline in its market and cumulative losses of £18.5 million over the last five years.

Steps begun last year to find a buyer for the business also proved unsuccessful.

Joint administrators Blair Nimmo and Tony Friar of KPMG were appointed today and concluded there was no option but to reduce the size of the workforce.

325 employees have been made redundant "with immediate effect", and the remaining 149 workers have been retained for now to complete some orders.

Mr Nimmo, head of restructuring for KPMG in Scotland, said: "This is a sad day for the employees of Tullis Russell Papermakers, who have worked hard against the significant headwinds facing the global paper-making sector."

Tullis Russell Papermakers is a wholly-owned subsidiary of Tullis Russell Group Limited.

Group chief executive Chris Parr said the directors of the paper making business were faced with no other option than to place the business into administration.

He said: "This is a terribly sad day for employees and their families, the local community and everyone else associated with the business and its proud 206 year history.

"Since the global recession in 2008 demand across the traditional markets for papermaker's products has fallen by 40%, our primary raw material, wood pulp, is now trading at consistently higher price levels than ever before and exchange rates have moved structurally against the business."

Mr Parr said it become clear that Papermakers was no longer a viable business.

"The group engaged KPMG to run a comprehensive sales process and between October 2014 and March 2015 over 72 trade parties have considered and subsequently rejected the opportunity to acquire the business. This has unfortunately only confirmed that the  business is no longer viable," he said.

"This difficult position finally became untenable with the papermaking company's third largest and most profitable customer entering into an insolvency process on Monday 1 April 2015. The directors of our papermaking business were therefore faced with no other option than to place the business into administration."

Responding to the announcement, First Minister Nicola Sturgeon said: "I am very concerned to learn of the job losses at Tullis Russell in Markinch. This will be a deeply anxious time for the workers, their families and the local community.

"Scottish Enterprise officials are working with the company right now to explore all possible avenues for support but given the potential impact of this news, I am today announcing the immediate formation of a Joint Taskforce for Fife. The Taskforce will be co-chaired by the Scottish Government and Fife Council, with the Deputy First Minister John Swinney leading for the Scottish Government.

"This will bring together key organisations to support economic growth and employment across the area, with particular focus on Glenrothes and central Fife.
"It will work with the administrators to try to secure an alternative owner and it will look for ways to help mitigate the effects of job losses by putting in place appropriate support for workers to help them back into new jobs and training.

"This taskforce will work alongside the efforts of our initiative for responding to redundancy situations, Partnership Action for Continuing Employment (PACE). Through providing skills development and employability support, PACE aims to minimise the time individuals affected by redundancy are out of work.

"I know that people in Markinch and across central Fife will be worried tonight. I would like to assure them that the Scottish Government stands ready to help in any way we can and that is exactly what we will do."

David Ross, Leader of Fife Council, said: "We are really saddened to hear today that Tullis Russell has gone into administration. This is a devastating blow, not only for the workforce and their families but also the communities of Markinch, Glenrothes and mid-Fife.

"Tullis Russell has been a great company with a history stretching back over 200 years. It has always been one of the major employers in the area, with over 400 people working there. We will be doing all we can to help those who have lost their jobs today and will be putting measures in place to help support them and their families.

"The massive paper mill at Markinch has been a feature of the local landscape and economy for generations and a pioneer of Employee Ownership. Today's news will therefore be particularly sad for the management and employees.

"On behalf of Fife Council I will be co-chairing the Task Force and will work closely with the PACE initiative and other government agencies to minimise the impact of today's announcement on the workforce and their families, the local communities affected and other supply chain companies.

"We look forward to working with the Scottish Government., Scottish Enterprise and other agencies to bring forward proposals to strengthen and regenerate the local economy."

Lena Wilson, Chief Executive, Scottish Enterprise said: "We have been working very hard with Tullis Russell in recent months and are extremely disappointed that the company have had to go into administration. It will be an anxious time for employees. We will work closely with the administrators to explore all possible options for the future and will, of course, fully support the work of the taskforce."