Stoneywood in Aberdeen, the company’s biggest production facility in the UK, has spent £1.5m upgrading one of its machines to handle heavier papers used by packaging clients.

It started producing extra products in May in anticipation of Charavines’ closure in June, part of a restructure of operations announced by parent company Sequana in April 2014.

It is now the main European site for production of Arjowiggins Creative Papers.

Stoneywood’s PM8 machine used to make paper up to 160gsm and can now handle up to 400gsm at 165m per minute after a £1.5m upgrade.

Stoneywood site manager Angus MacSween said: “We’ve completed the rebuild of PM8 and we’re now starting on PM9, which is expected to complete by the end of Q1 next year.

The site has four paper machines, one tandem coater and 20 finishing machines.

It currently produces 68,000 tons of paper a year, running a five-shift system 24/7 with one shut down over Christmas.

“Creative Papers are targeting the area of growth and one of the areas of growth is packaging. If we could grow in that market, there is room for it,” MacSween said.

He added: “We’re starting to see a growth in terms of surface textures. There was a while where nobody was interested but now people are.”

The upgrade follows the company’s decision to refocus its production in the recycled and creative papers segments and reduce Arjowiggins' exposure to the standard coated paper segment, at the same time as refinancing its debt, an approach which four months later was having a positive effect.

Papermaker Sappi is going through a similar transformation, announcing in July that it planned to develop at least one new speciality packaging substrate a year.

The company is creating a division for speciality papers at its Alfeld Mill in Germany, which has had a £60m rebuild of its PM2 paper machine to turn it into a 100% specialty paper mill.

Stoneywood currently employs 450 people, down from 550 following a series of redundancies, but MacSween said that employee numbers were growing again.

He said it used to be tough to recruit in Aberdeen, where locals can get much higher salaries in the oil industry. However, Aberdeen’s position as the UK’s oil capital has suffered as a result of falling oil prices over the past two years, so this is now changing.

MacSween said he had taken on three papermakers who previously worked at Tullis Russell Papermakers around 100 miles away in Fife, which went into administration at the end of April.

However it has been harder to attract machine minders.

“We’d love to get operators coming but the cost of housing in Aberdeen is twice the cost of housing in Fife. A two-bedroom flat costs around £230,000 at the moment,” he said.

The mill also makes security papers and has a thriving watermark business. Its watermarked flagship Conqueror brand is still its best-selling paper.

Arjowiggins paper and board is sold through Antalis, also owned by Sequana.

There has been a paper mill at the Stoneywood site on the banks of the River Don since 1770.