Tullis Russell Papermakers Limited has announced the appointment of KPMG LLP as Joint Administrators, at the request of the company’s directors.
Based in Markinch, Fife the employee-owned company was founded in 1809 and produces high quality paper board for use in cards, covers and premium packaging.
The company has 474 employees, 471 of which are based at Markinch and three operating remotely throughout the UK.
In the year to 31 March 2014, the company sold 126,000 tonnes of paper and board. It recorded a turnover of £124.6 million, but suffered a pre-tax loss of £3.4 million. It has incurred cumulative losses of £18.5 million over the last five years, largely as a result of weakening demand and pressure on its margins.
Administrators have taken steps to significantly reduce the company’s cost base whilst all options are considered. This has resulted in 325 employees being made redundant with immediate effect. The remaining 149 have been retained to complete some orders.
Blair Nimmo, Joint Administrator and 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 papermaking sector. Whilst we will be exploring whether a sale of all or part of the business and asset of the company can be achieved, we have had to take steps to significantly reduce the company’s overheads. Unfortunately, with trading effectively ceasing, we have had no option but to reduce the size of the workforce. We will be working with government agencies to minimise the impact on employees. We would encourage any party with an interest in acquiring all, or parts, of the business to make contact with us as soon as possible.”
Tullis Russell Papermakers Limited is a wholly owned subsidiary of Tullis Russell Group Limited. The Group’s Coating business based in Bollington, Cheshire and its Image Transfer business based in Ansan, Korea are not affected by the administration and continue to trade as normal.
Responding to the announcement, Scotland’s 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, added, “We are really saddened to hear 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. 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.”