By Gordon Berry, Cheryl Wood and Graham Huband

THE ECONOMY of Fife and beyond was dealt a devastating blow yesterday with news that Guardbridge-based Curtis Fine Papers has gone into administration with the potential loss of up to 260 jobs and a business that has been a mainstay of the community since 1873.

The news—blamed partly on the current credit crunch—was given to stunned employees after they turned up for work to find machinery silent and summonses to meetings with management and representatives of accountants KPMG.

Two meetings were held, and the workforce was told that 180 of the 260 jobs at the sprawling plant are to go immediately, with some other specialist staff kept on for an indefinite period as the administrators go about their business.

It immediately became clear, however, that both management and workers are deeply unhappy about the way things have been handled by the administrators, and managing director Keith Chapman was outspoken in his criticism of KPMG.

Outside the factory he spoke to a Courier reporter and made it clear his view that the move into administration was premature and short-sighted, and there had been interest from other paper makers.

It was also revealed that around 40 workers had staged a sit-in in the sales office in protest over the loss of this month’s wages for salaried employees.

KPMG, however, said that Blair Nimmo and Gary Fraser had been appointed by the directors of Curtis Fine Papers as joint administrators.

In a statement Mr Nimmo said the business, specialising in the manufacture and supply of quality uncoated fine paper for the UK and international markets, had an annual turnover of £35 million and employed 260 people.

“Following significant losses in recent years, there had been an improvement in trading over the last year. Despite this, a number of external factors acted against the business, including significant increases in energy and raw material costs and a general decline in the availability of credit.

“In addition, the company had planned to sell a surplus area of land to raise funds. However, this was not possible following the difficulties currently being experienced by the real estate markets.

“The company explored several opportunities to sell the business, but these were not successful.”

It was stated that there had been no option but to cease the production of paper with the regrettable consequence of 180 immediate redundancies.

“It is with regret that we have had to make substantial redundancies across Curtis Fine Papers operations and we are working with government agencies to ensure the employees’ issues are dealt with as best as possible,” the statement went on.

The blow has come less than two years after a management buy-in at the mill and only months after an upbeat statement from management.

This came in December as the company announced losses of almost £2 million on a sales turnover of £29 million, but it was stressed that the launch of several new products had strengthened the company’s position as it continued to concentrate of niche markets.

Only weeks before, Mr Chapman announced that support had been received from Business Gateway International Fife to launch an exciting new specialist paper product into 25 different overseas markets.

The expectation was that this would lead to significant sales, and greatly strengthen Curtis’ position in the premium paper market abroad.

Only a few weeks ago Curtis Fine Papers successfully applied for planning permission for a major housing development in Guardbridge.

This was said to be the first of a series of developments proposed around a “master plan” for all of the company’s landholdings and property.

This was to involve re-use and regeneration of redundant buildings, development of brownfield sites and creation of a gateway mixed-use scheme, including more housing.

Now all of that hope for the future appears to be in tatters.

North East Fife MP Sir Menzies Campbell and his Holyrood counterpart Iain Smith MSP said yesterday they were extremely disappointed that a business of such stature had fallen into administration.

The pair said the move was a body blow for the Fife economy and said their thoughts were with the workers whose livelihoods had been taken away.

In a joint statement, the duo said they would be contacting the administrators and the Scottish Government to see what could be done to salvage any of Curtis Fine Papers’ business.

They said, “The closure of the factory would be a devastating blow to the local economy.

“It has been known for some time that the paper mill has been finding it difficult to cope with the strong euro and the rising price of oil and raw materials.

“The loss of 180 jobs is extremely serious and we shall be seeking an urgent meeting with the administrators to see what prospects there are for continuing activity.

“We will also be seeking an early meeting with John Swinney, Cabinet Secretary for Finance and Sustainable Growth, to discuss the situation.”

Mid Scotland and Fife MSP Ted Brocklebank, who lives in St Andrews, said the news was extremely disappointing, not only for Guardbridge, but for the whole of north Fife.

He said it is vitally important that someone is found to take on the running of the mill, and the administrators should be concentrating on this.

He added that the mill’s future had depended on the building development planned for the village and said he would also be approaching Mr Swinney “to see what can be done.”