Favini was bought out of a Chapter 11 type arrangement in May 2008 after failing to turn around the unprofitable Dutch mills it had purchased. A group of investors purchased the Italian assets, led by the equity fund, Orlando, which now holds 52% of the company.

Marketing and sales director Chris Brown said Orlando Italy had "controlled the direction and strategy" of the paper company, encouraging development of products for niche markets.

He credited the company's innovations and developments with its growth, which has increased each of the past three financial years, and said its commitment to being a specialist paper maker was now more focused. Favini's latest releases include high-end papers Twist and Softy and Majestic's sub-brand, Satins.

"Favini is not all about innovating new products, but changing our ranges, whether it is colour or grammage, and focusing on different markets. We are concentrating on the packaging and labeling market and, over the past two years, we have developed substrates for shopping bags and swing tags for the fashion market.

"We have improved the mix, offering higher value products with the same tonnage. The products are more interesting and offer better solutions for our customers in the niche markets we occupy," he said.

Exports accounted for 60% of Favini's €127.1m total revenue, particularly within the Far East and South America. Brown said Orlando Italy had encouraged a more "aggressive" approach to emerging markets, and Favini has increased its presence in these areas. The company now has a dedicated resource for its Release Papers division in Brazil and the Italian sales department had allocated more staff to emerging markets.

Brown said sales had increased 20% since Orlando Italy joined in May 2008, and 2011's net income reached €3.2m in 2011.

Favini CEO Andrea Nappa said: "Four years after the arrival of the private equity fund, we are proud of the results we have achieved, particularly given the great uncertainty in the marketplace.

"Even in such a mature industry there are still market niches that are growing and constantly evolving and where a focus on quality, innovation and environmentalism are appreciated. Understanding and anticipating market trends is crucial, now more than ever, in order to stay competitive."

Favini papers are distributed in the UK exclusively by Fenner Paper, supplied from Favini's two Italian mills, Rossano Veneto and Crusinallo.