News International crisis fallout reaches King’s Lynn’s Palm Paper
16:05 20 July 2011
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Shrinking newsprint market for Palm Paper - but possible £50m investment in King’s Lynn mill
Fallout from the current News International crisis and demise of the News of the World is settling in West Norfolk.
King’s Lynn’s Palm Paper produces 1,110 tonnes of newsprint a day and the loss of the biggest-selling Sunday paper has had an impact the industry.
The national market for newsprint was already shrinking, with a 7.5pc reduction in the first half of this year alone, and the closure of a major paper reduced it by a further 3pc.
Palm paper supplies News International, owners of the Sun, Times, Sunday Times and the former News of the World - but details have not been revealed.
Rapidly rising costs, with more forecast in January, and a smaller market place is seeing a squeeze on paper producers.
Company chief executive Dr Wolfgang Palm said when the Lynn mill first opened the market required 2.2 million tonnes of newsprint a year and that figure has now shrunk to 1.15 million tonnes.
“News International is considering the launch of ‘The Sun on Sunday’ which would potentially mitigate any loss. Meanwhile, other Sunday publications may benefit from the additional sales as a result of the News of the World Closure,” he said.
But Dr Palm and his Lynn management team are confident for the long-term future of the plant and may invest a further £50m in a new on-site Combined Heat and Power (CHP) energy plant using natural gas to create electricity.
Another option is to buy power from a public waste incinerator if controverisal proposals by Norfolk County Council and Anglo-American consortium Cory Wheelabrator are approved.
The incinerator would be built close to Palm’s huge mill on the Saddlebow Industrial Estate.
“We understand there are concerns about the Cory Wheelabrator project. We believe that the decision about the project has to be taken by the authorities while giving consideration to the opnion of the people of Lynn and West Norfolk.
“We think it would be wise not to be part of this discussion, so we do not want to get involved,” said Dr Palm.
But he confirmed his company had been in talks with Cory Wheelabrator to discuss the possibility of Palm buying power if the incinerator was built.
The paper mill also has planning permission for an on-site incinerator to burn waste from the factory to create power - a system already used at its German sites.
“We have a lot more control over what we burn - it’s paper waste. It’s very different from a public waste-burning incinerator and we have not had a complaint,” said Dr Palm, who did not rule out the possibility of a similar plant being built in Lynn.
Palm has also been talking to electricity producer Centrica about taking excess steam from a proposed expansion of Lynn’s power station.
But a final decision on the future power supply has yet to be taken and Dr Palm said his company was keen to see the outcome of the Cory application and the Centrica plans before anything would be decided.
Dr Palm did say, however,that if neither of the external applications were approved then Palm would rather build a £50m CHP plant than an incinerator because it was both more ecnomical and better for the environment.
The company is also offering an apprenticeship scheme - offering young people the chance to study in Germany to achieve qualifications in paper manufacturing over a three-year period.
Eight full-time apprentices and four part-time will take part in the scheme along with 12 engineers and shift supervisors already working for Palm.
The company is also funding a person to study for a Master of Engineering at Munich University of Applied Sciences. The course is for post-graduates and applications can still be made to Palm.