James Cropper has issued a statement warning that the Group is likely to incur a loss not exceeding 1m when its full-year results are published in June, along with between 20 and 30 job losses at its Cumbria facility.


"We hope to bring the papermaking division back to a state of profitability by a series of measures, which will include some restructuring," said group finance director John Denman.


Denman said that in addition to the job losses, certain jobs would not be replaced when staff retire or end their secondments.


The statement, issued by chairman James Cropper, points to several main contributory factors, not least the escalation in pulp prices and a doubling of the companys gas bill to nearly 2m.


Further losses in the papermaking division over the next few months may also be unavoidable as the group takes action to improve efficiencies, says the statement.


"The fact that the price of pulp is coming down will help us in a small way, but also the changing of workflows and shift patterns will also help," said Denman.


Denman said that the company would also look at significant new markets and new customers.


A new role has also been created in the company, which will involve a senior member of the management board focusing on energy and the environment.


The groups two other businesses in converting and technical fibre products are both performing well, with the company in a financially strong state with relatively low borrowings.


Story by Andy Scott