The closure of Aylesford Newsprint has seen three local authorities take a loss of almost £1m for their paper recycling, after a supplier has revealed other mills are unable to match Aylesford’s prices. As a result the amount it pays the councils has been slashed.
Printwaste supplied 30,000 tonnes of paper waste from South Hams District Council in Devon and two unnamed councils in Gloucestershire and south Wales.
Unable to find a buyer to match Aylesford’s prices, the company is now sending recycled paper to Asia, including Vietnam, Indonesia and India.
Printwaste takes about 6,000 tonnes of paper waste from South Hams District Council, which will suffer a loss of about £192,000 a year after prices were slashed from £37 a tonne to £5 a tonne, according to the BBC.
The other two councils taking a hit were not named.
Geof Robins, Printwaste operations director told CIWM Journal Online that Printwaste aims to send the material to wherever provides the best value.
“If that means we have to send that deep sea then that’s what we have to do,” he said. “It would be preferable to supply the material to UK or European mills, but financially, at this time, we don’t feel that is viable.
Geof Robins, Printwaste – “Both of the big mills in the UK – Palm and UPM – they’re at capacity, so they might cherry pick supplies that are clean, but the money they’re willing to pay is quite low so there’s no incentive for us to chase them”
“We have got some orders going to the Far East, which are giving us a better price. This means we can still give a positive to the councils – unlikely to be more than £10 a tonne. Which is a severe drop.”
Speaking in the short to medium term, Robins believes Printwaste will be able to sustain that price.
“But that will only take us into early summer,” he said. “Going forward we’re not sure where things will end up.
“Both of the big mills in the UK – Palm and UPM – they’re at capacity, so they might cherry pick supplies that are clean, but the money they’re willing to pay is quite low so there’s no incentive for us to chase them.”
Councils will obviously take a hit on the value, Robins said, because the material is not going to be commanding the same price.
“They won’t like it and there will be a loss, but it’s still cheaper to recycle it. At the end of the day they still get their £44 a tonne recycling credit.
“I guess it will be another reason to add a couple of quid to our rates, but I think the global market will take up the slack and it will all keep moving.
“It’s not all doom and gloom, but the material just won’t command the same revenue.”
Aylesford Newsprint in Kent went into administration in February, blaming “challenging operating conditions” for the closure, including overcapacity in the newsprint market, coupled with the rise of digital media. (See CIWM Journal Online story)
It supplied newsprint to some of the main newspaper groups, employed nearly 300 people and recorded a turnover of £139m in 2013.
233 jobs have been lost as a result of it going into administration.
The Kent Resource Partnership (KRP) Members Board recently said it is very concerned a national trend may be developing, where recycling businesses are facing such intense pressures that they either diminish operations or cease to continue.
Aylesford Newsprint has been a well-established Kent business for many decades. The company was a major employer and the impacts on the local economy are significant.
Several Kent councils had deliveries of paper to Aylesford Newsprint. Impacted councils are currently implementing urgent arrangements to ensure paper collected from Kent households continues to be recycled.
The KRP Members Board said: “Without a thriving UK recycling industry, the KRP believes local economic growth and jobs may be at risk, especially in communities across the country hosting major recycling facilities such as those at Aylesford.”
The KRP recommends the new Government after 7 May 2015 receives urgent advice and guidance on the reasons for current industry pressures across all recycled materials, what it may need to do to strengthen the resilience of the UK recycling industry, and actions to ensure local economies where major facilities are located are supported.