Arjowiggins is to cut just over 70 jobs at its Stoneywood Mill in Scotland as the business, which was rescued from administration last year, battles the fallout from Covid-19.
“The coronavirus pandemic has had a significant impact on the Arjowiggins businesses and although we expect to see some recovery next year we do not anticipate a full return to pre-Covid conditions and our pre-Covid plans,” said Arjowiggins CEO Jonathan Mitchell in a statement.
Like most businesses, it has made use of the government’s furlough scheme at the circa 400-staff mill, which Mitchell said had helped the it navigate through the pandemic despite trading losses.
He added that the firm had benefitted from “considerable support from our financial partners including a new EU Framework Covid loan via the Scottish Government”.
“However, we must prepare ourselves for the challenging future and we have therefore had to take the difficult decision to restructure the Stoneywood mill to adjust the capacity in order to match expected demand. We have entered into consultation with Unite the Union and employee representatives concerning around 18% of the workforce.”
The rescue deal was backed by private equity, some strategic customers and the Scottish government via the Scottish Enterprise development agency.
As well as Stoneywood the MBO team acquired the Chartham Mill in Kent, which recently launched a translucent paper-based barrier material, and Arjowiggins’ surviving international mills in Spain and China.
“Having experienced the elation of successfully exiting administration a year ago and creating some true positive momentum in the first six months, a restructuring programme was the last thing that we had on our minds. It has not been an easy decision to take and we are acutely aware of the impact that it will have on those directly affected and the wider community,” said Mitchell.
The mill briefly paused production after extending its planned maintenance shutdown in April due to the lockdown and difficulties sourcing PPE for staff, going back into full production during May.
However, the site, which celebrates its 250th anniversary this year, continued to feel the effects of the pandemic and, according to local media outlet Evening Express, staff were told last Thursday of the proposed cutbacks.
The company has now entered into a consultation period with the employee representatives and union Unite.
Unite industrial officer Shauna Wright said in a statement: “This is another devastating blow for members within the Stoneywood Mill. We had reasons to rejoice last year when the mill made it to 250 years with a management buyout. Sadly, due to the Covid pandemic and the current market conditions we have been advised that around 74 jobs are at risk.”
“Unite will look at every means possible to mitigate any redundancies, and we will work closely with our members and management to prevent as many compulsory redundancies as possible.”