Sappis Transcript mill has become the first major player to bow out of the carbonless paper market, with the news that the mill is to close early next year with the loss of 203 jobs.

A spokesman for Sappi said it was no secret the mill had been up for sale for some time, but no deal had come to fruition.

"Further environmental investment was also needed, which was substantial in terms of the size of the mill and costs," said Sappi director of strategic development Robert Hope.

The company also cited the affect of new technologies on the carbonless market, which have replaced the need for multipart documents and have led to a decrease in demand and overcapacity.

A statement by Sappi said: "The company is investigating the sale of the Transcript brand to ensure continuation of supply," but a spokesman said it was too early to say who might emerge as a potential suitor.

David Rogan, managing director of merchant stockist Premier Paper, said: "We would like to reassure our customers that we have a guaranteed supply of the paper for six months, but we will of course be sourcing a successor."

Sappi said that it expected the closure costs to amount to nearly 7m (US$10m) after tax, which would be charged in the December 2001 quarter.

Chief executive of Sappi Fine Paper, Bill Sheffield said: "The decision is in line with Sappis proposal to dispose of non-core, under-performing operations, in order to focus on its well-invested coated woodfree asset base."

Story by Andy Scott