Hundreds of jobs lost as Scottish Government bailed-out Stoneywood paper mill goes into administration

Hundreds of jobs have been lost at a historic Aberdeen paper mill which was previously saved from closure with millions of pounds in public money.

The Arjowiggins Stoneywood mill has been operating for around 250 years and has now entered administration.

Blair Nimmo and Alistair McAlinden from Interpath Advisory were appointed joint administrators to ten Arjowiggins Group UK subsidiaries on Thursday.

The Group owns and operates two mills in the UK, in Stoneywood, Aberdeen, and Chartham, Kent.

The joint administrators made 368 of the company’s 463 UK-based employees redundant immediately.

In Scotland, 301 employees were made redundant, while a total of 71 people retained their jobs.

Mr Nimmo, chief executive of Interpath Advisory, said it was “immensely troubling news” for Scottish manufacturing but that challenges posed by the Covid pandemic, skyrocketing energy costs and spiralling input prices had proven overwhelming.

“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 Nimmo said.

The plant’s future was plunged into doubt in January 2019 after its parent company failed to find a buyer.

But the ancient mill was saved the following September with hundreds of jobs rescued when it was purchased by Creative Paper Holdings Ltd.

The deal was supported by £7m of funding from Scottish Enterprise.

The Scottish Government said it would support the mill in seeking a new owner to protect jobs.

Shauna Wright, Unite regional officer, said that a meeting has been arranged for members.

“We are saddened to hear the news about Stoneywood Mill – particularly on the anniversary of it’s opening 252 years ago,” she said.

“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.

“Unite have organised a mass meeting for all our members on Tuesday. We will be there to support them and offer any legal support that is required for all our members and we will be contacting them directly in the coming days with details of the venue for the meeting.”

Scottish Conservative North-East MSP Douglas Lumsden said the news that the mill had gone into administration was “absolutely devastating”.

“This is an extremely anxious time for staff and for the north-east economy,” he said.

“My thoughts go to the workers who have been placed in this situation through no fault of their own.

“It’s now time for the Scottish Government to step in and help Stoneywood like they did for Ferguson shipyard.

“I will also be lodging an urgent question in parliament calling for this to happen.

“Stoneywood Mill has been a very successful business in our city for more than 250 years and everything must be done to safeguard jobs and protect its future.”

A Scottish Government spokesperson explained that a solution could not be found to turn the company’s situation around.

“This will be a very uncertain time for the company’s staff, their families and the local areas, which will be affected by this decision,” they said.

“Scottish Enterprise has been working extensively with Arjowiggins and its partners to explore all possible options to support the business and its staff, including a sale of the business.

“Unfortunately, a solution could not be found to turn the company’s situation around.

“Scottish Enterprise will work with the administrators to understand the potential options for the business going forward and explore all possibilities to rescue the jobs.”

They continued: “The individuals affected by this announcement are our immediate priority and we recognise the important role they play in our economy.

“The Scottish Government will do everything in our power to help those affected through our initiative for responding to redundancy situations, Partnership Action for Continuing Employment (PACE).

“This will include the issuing of PACE information to affected employees by the administrators and a PACE support event to be held during week commencing September 26, 2022.”