The Gemini coated board brand, which is currently produced at Carrongove has been sold to fellow Scottish mill Tullis Russell.

Inveresk chief executive Alan Walker said the mill had been operating in "very challenging market conditions", with escalating energy and raw materials costs, which it had been unable to pass onto customers.

In addition, significant investment was required, and this, coupled with the volatility of the euro and the dollar had forced the firm to take the decision.

"We feel confident our brand is passing into safe hands, but clearly it's a day of mixed emotions," said Walker.

Inveresk's other mill at St Cuthberts in Somerset is unaffected by the sale, and has appointed former ArjoWiggins Fine Papers regional sales director David Doorbar as general manager.

The proceeds from the sale of the business, expected to be between 13-15m, will be used to reduce Inveresk's bank borrowings, which at the end of December last year stood at 15.7m.

In the year to 31 December 2004 the Carrongrove mill reported sales of 26.2m and operating profits of 1.62m.

Story by Andy Scott