The fine paper manufacturer sold 205,000 tonnes of uncoated paper during the first six months of 2008 – a volume increase of 7% and a sales value increase of 13% compared to the same period a year earlier.

Coated fine paper, which makes up the remaining 25% of Arctic Paper's production, increased in sales volume by 12% to 71,000 tonnes during the period.

Chief executive Olle Grundberg said: "Generally, the industry has small margins. The prices for fine paper have fallen in recent years but are now stabilising.

"The increases in energy prices are a concern and we are implementing measures to reduce their effects."

Grundberg also said current competition was extremely tough and said new competitors were making their entry from Asia, the US and Canada.

Around 10m tonnes of woodfree uncoated fine paper and 8m tonnes of woodfree coated fine paper are consumed in Europe.

The market for fine paper is understood to be growing by 1-2% each year.