The UK paper industry has been dealt a further blow after East Lancashire Paper Mill appointed administrators and made around 40 staff redundant.


The directors of the Radcliffe, Manchester-based mill took the decision to appoint Arthur Andersen through the courts on 12 January rather than trade insolvently, said an Arthur Andersen spokesman.


The firm, which is renowned for its Elan and Elusion paper and board ranges, employed 250 people at the 43-acre mill before the job cuts .


A number of staff are members of the Clerical, Managerial and Supervisory union, which is in talks with the management and administrators. "One way out of this position is to seek a re-financing package rather than sell the business, but this will be assessed," said the spokesman.


A statement issued by the administrators blamed the mill's plight on "strong foreign competitors, the strength of sterling and the escalation of raw material costs".


The 16 January edition of the Financial Times carried an advertisement about the sale of the business and the assets of the mill.


The spokesman was unable to confirm the company's exact debt. Its last set of accounts, filed in 1998, revealed that group loans rose from 4.6m in 1994 to 11.8m in 1998.


The company went from making a 1.2m profit in 1994 to a near 4m loss in 1996, which then fell to a 269,000 loss in 1998.


Story by Andy Scott