Marketing director Tony Porter said the company had issued a policy to all its sales staff to this effect in light of the recent cases of bad debts suffered by paper merchants.

"Over the past 12 months bad debts incurred by paper merchants have reached a record level of over 25m, and we felt we had to make a positive stance against this," said Porter.
The merchanting group has cited the fact that insurance has become more and more expensive, with credit insurance for the merchanting industry being either extremely expensive or difficult to obtain.

"More time and energy is being spent on the monitoring of payments and customers' credit-worthiness in an effort to minimise risks and losses," said Porter. James McNaughton said it had seen an increasing number of companies reformed essentially with the same management and ownership, thus establishing a phoenix company.

Porter hoped the firm was sending out a positive message to printers and the paper industry, and that it would help save other companies from incurring losses by preventing the establishment of phoenix companies.

This would make companies think twice if they were on the verge of going bust and looking to re-establish themselves debt-free, he added. "Any business that is clearly a phoenix with the same management or ownership will not be supported on a financial basis," he said.

Story by Andy Scott