The packaging industry has been dealt another blow with the news that Stora Enso is to close its loss-making Newton Kyme mill in North Yorkshire.


The closure will mean the loss of 170 jobs and the removal of Newton Kyme's 40,000tpa capacity of folding boxboard.


Niilo Poyhonen, senior vice president of Stora Enso's packaging division, said: "The mill has been making a loss for many years. Now the time has come to face reality."


Poyhonen said the company had entered into a 90-day negotiation period with union representatives to discuss the employees' futures.


Newton Kyme mill manager Jim Smith was clearly embittered: "We did everything that has been asked of us at the mill, but due to rising prices, especially in pulp, which we have not been able to pass on, coupled with the strength of sterling, we have been forced to close.


"All of the large players such as Field and Crest buy from us and they will now go to Europe for their supply. You can bet that the Europeans, who have been cutting their prices, will now raise them."


The mill is scheduled for closure in mid-January 2001. Poyhonen said the site could be sold to a developer, or hinted that "other options may arise".


Story by Andy Scott