SRM, which is owned by Heidelberg Cement Group, will collect contaminated paper and packaging that cannot currently be reprocessed due to chemical coatings, and is usually disposed of in landfill sites.

The firms Lincolnshire factory will turn waste including gummed label sheets into "profuel" for Castle Cement, also owned by Heidelberg Cement Group. It will use "profuel" as an alternative to coal for cement kilns.

A spokesman for SRM said: "This gives the print and packaging industries a positive alternative to sending some of its waste to landfill as we can recycle the waste for energy recovery, which reduces the costs for suppliers."

Once the factory is up and running and fully audited, SRM aims to issue packaging recovery notes, which are credit notes against the amount of tax a firm has to pay to the government for waste disposal.

Lancastrian Labels & Print uses landfill sites to dispose of self-adhesive reels, of which it com-presses around 12 tonnes a fortnight.

David Smith, the firms technical services manager, said: "Until now theres been no one that can get rid of self-adhesive material other than landfill sites. We will definitely consider profuel as it would show that were effectively trying to reduce waste and at the same time were able to reduce our costs."

Representatives of the Pressure Sensitive Manufacturers Association and the British Roll Label Manufacturers Association will hold a meeting next week at the Institute of Packaging to discuss waste recovery.

SRM plans to open further factories across the country in the future.

Story by Claire Sames