stensson said the machinery at the Fife-based mill and plant would now be handed back to Inveresk before the end of the year. Inveresk retained ownership of the fixed assets, with Klippan renting the land and machinery for an initial fee.
Inveresk chief executive Alan Walker said he was deeply saddened, but said the site had enormous development potential.
The announcement came as Klippan reported a pre-tax loss of 2.6m (SKr34.9m) for the first six months of 2003, a reversal on a pre-tax profit of 1.8m for the same period last year.
The firm suffered from a weak market for fine paper during the second quarter.
Klippan announced a cost-cutting programme aimed at making savings of 2.6m in July this year, which saw 103 jobs lost at four mills.
During the first six months of 2003 Klippan reported sales of 69m, an increase of 48% on the first six months of 2002.
The Caldwells mill has a capacity of around 40,000 tonnes per annum and specialises in production of Klippans Repeat recycled grade.
UPM-Kymmene has started negotiations to close a paper machine at its Viokkaa mill in Finland with the loss of 175 jobs as part of its continuing cost-cutting programme. In July the Finnish manufacturer said that it planned to make 1,200 cuts.
Story by Andy Scott
