Administrators take charge at historic Arjo mills
Thursday, September 22, 2022
UK paper making has been dealt a further blow after Arjowiggins Group’s UK operations – including the historic mills at Stoneywood and Chartham – were placed into administration after the business became unsustainable in the face of spiralling costs for energy and raw materials.
Administrators Blair Nimmo and Alistair McAlinden from Interpath Advisory were appointed joint administrators at ten Arjowiggins Group UK subsidiary companies on the afternoon of 22 September 2022.
An MBO team acquired the business and assets of the Arjowiggins Fine Papers and Arjowiggins Chartham businesses in September 2019, just a few months before the Covid-19 pandemic struck. The deal came about after a complex saga involving the insolvency of its former French parent group and was supported by Scottish Enterprise, which provided £7m of funding.
The Stoneywood mill has been making paper since 1770 and specialises in fine papers, while Chartham has been in operation since 1738 and makes translucent papers.
Stoneywood’s brands for graphics and packaging include Conqueror, Curious Collection, Keaykolour and Delos. It had also diversified into making casting papers, security papers and smart papers for printed electronics.
Interpath said the group had faced a difficult trading environment since the negative impact of Covid-19 on trading and cashflow which resulted in it being loss-making, with losses then exacerbated by the significant increases in energy costs and the price of raw materials, including pulp.
Blair Nimmo, chief executive of Interpath Advisory and joint administrator, commented: “Arjowiggins has a long and proud history dating back more than 260 years, so this is immensely troubling news for UK and Scottish manufacturing.
“Unfortunately, and following on from the severe challenges posed by the pandemic, the significant economic headwinds which have been impacting industrial manufacturing businesses up and down the country, including skyrocketing energy costs and spiralling input prices, have proved to be overwhelming for the group.”
In its first full year of trading, to 31 December 2020, AW Creative Paper Group had sales of £99.9m and made a pre-tax profit of £92,840. It received £3.65m in government grant income.
Nimmo added: “The management team has asked that we pass on their sincere thanks to all employees, customers and suppliers, plus Scottish Enterprise, for their strong support during these very difficult times, and they would like to express their deep regret that there was unfortunately no other option available for this historic group.”
The business employed 463 people in the UK, and 368 have been made redundant immediately.
The group’s overseas subsidiaries include the Guarro Casas mill in Spain, and Quzhou mill in China. Neither is included in the insolvency proceedings.
Unite national officer Louisa Bull told Printweek: “Employees are shocked and devastated and everyone is very upset.
“The management team have done their damnedest to get through all the problems, but the energy situation has tipped them over the edge. I’m not surprised this has happened, but I’m very sad.”
Bull added that the Arjowiggins administration and the recent closure announcement at Portals’ Overton mill meant that 1,000 jobs had been lost in the UK paper industry within the space of two months.
Printweek also understands that a potential buyer for the Arjo business had pulled out due to the current issues around supply chains and energy.
Arjowiggins joint administrator Alistair McAlinden, managing director at Interpath Advisory, added: “We understand this is an incredibly difficult time for the group’s workforce. Our priority is to work closely with the Unions, UK and Scottish Government agencies, including PACE and Job Centre Plus, as well the relevant local authorities to provide members of staff with all of the support and information they need, including the information necessary to make claims for redundancy pay from the Redundancy Payments Office.
“Over the coming days and weeks, we will be exploring options to achieve the sale of the sites and assets and would ask that potential interested parties contact us as a matter of urgency.”
The Arjowiggins companies that are in administration are:
- Arjowiggins Chartham Mill Limited
- Arjowiggins Group Limited
- Arjowiggins Papers Limited
- Arjowiggins Scotland Limited
- Arjowiggins Translucent Papers Limited
- AW Branding Limited
- AW Creative Papers Group Limited
- AW Estates England Limited
- AW Estates Holdings Limited
- AW Estates Scotland Limited
Almost a year ago, and prior to Russia's invasion of Ukraine, Confederation of Paper Industries director general Andrew Large warned that UK paper mills could be forced to shut down if the gas price crisis impacting energy-intensive industries was not resolved.