Administrators have been called in to 10 UK subsidiaries of historic paper manufacturer Arjowiggins with 368 jobs made redundant.

This evening’s announcement affects two mills in the UK – Stoneywood, Aberdeen, and Chartham in Kent.

Mounting cashflow problems following the Covid pandemic have led to continued losses, exacerbated by rising energy costs and the price of raw materials, including pulp.

The group, which has produced fine and custom papers for various purposes including graphic design, packaging and labelling, and security printing, can trace its origins to 1738.

In 2019 its UK operations were established via a management buy-out following the insolvency of French parent companies, Arjowiggins and Sequana.

The directors of the group worked extensively, exploring all options to safeguard the future of the business, but with a solvent solution unable to be secured, took the difficult decision to place the group’s UK companies into administration. Blair Nimmo and Alistair McAlinden from Interpath Advisory have been appointed joint administrators

They have made 368 of the group’s 463 UK-based employees redundant immediately. A total of 95 members of staff have been retained by the joint administrators to assist them with the operation of limited activity across the two sites whilst they explore any possibility of a sale of the sites and assets.

Mr Nimmo, chief executive of Interpath Advisory and joint administrator, said: “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.”

He 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.”

Mr McAlinden, managing director at Interpath Advisory and joint administrator, 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.”

Union ‘saddened’

Shauna Wright, industrial officer for Unite, said: “We are saddened to hear the news about Stoneywood Mill – particularly on the anniversary of it’s opening 252 years ago.

“This comes as a huge blow to our members who stood by the mill through the last administration and welcomed the management buyout, which gave them so much hope for the future.

“That hope has been shattered today as we hear this afternoon that, with immediate effect, 400 staff have been made redundant. The administrators have apparently taken charge of the mill and will look to reduce the rest of the staff further in the coming days and weeks.”

The union has organised a meeting to offer vital support to its members.

The following companies are affected by today’s administration:

AW Creative Papers Group Limited

Arjowiggins Group Limited                           

AW Branding Limited              

AW Estates Holdings Limited

AW Estates Scotland Limited

AW Estates England Limited

Arjowiggins Papers Limited

Arjowiggins Translucent Papers Limited

Arjowiggins Chartham Mill Limited

Arjowiggins Scotland Limited

The group also owns and operates mills in Spain and China via its Guarro Casas and ArjoWiggins Quzhou subsidiaries. Neither operating company is subject to insolvency proceedings.