However, the Scottish papermakers pre-tax profits fell 11% to 5m, taking into account restructuring costs of 1m relating mainly to 41 redundancies made last year on the back of a 2.5m investment to automate its finished cutting capacity.

Group finance director Chris Parr attributed sales growth to the companys commitment to add value to its products.

The company, which is based in Fife and employee-owned, also turned its 4.9m net debt at the beginning of the year into a positive net position of 300,000 at the year-end.

Parr said Tullis Russell would continue to control its costs and hoped this would protect its profit margins against an overall weak demand and unstable pulp prices.