News

Falls in the value of the pound against the euro combined with the credit crunch have hit building costs at Ecco Newsprint.

Ecco chief executive Marcus Moir has said construction costs have risen to a level in excess of £400m, up from £325m, due primarily to the fall of the pound against the euro.

Construction at the Teesside site will commence as soon as funding arrangements are in place.

Moir hopes to restrict the number of investors to five or under and a likely start date will be announced as soon as the funding is in place.

In Europe, the newsprint market is experiencing a “fairly turbulent time” and a number of paper producers have announced mill closures to reduce capacity.

Moir said these have been prompted by significant increases in virgin fibre costs, “which impact Scandinavian producers in particular”.

He added: “Further afield in North America, however, selling prices have risen and continue to do so, helped by mill closures.

“It is anticipated that European selling prices will have to rise towards the end of this year to reflect cost in­­creases, particularly in energy and fibre.”

Ecco agreed on building terms for the site in July last year (PrintWeek, 6 July 2007).

The terms of a building agreement were signed, as well as a 125-year lease, with One NorthEast, the development agency for north-east England and owner of the land.

At the time, it was expected that the 420,000-tonne capacity facility was scheduled to come on line in 2009.