The Confederation of Paper Industries' (CPI's) preliminary 2005 statistics revealed that although output levels remained at just over 6m tonnes during December last year, this was the lowest level recorded over the past 13 years.

"The unprecedented rise in energy prices has put a severe strain on the whole industry," said CPI director of external affairs Kathy Bradley.

Between October and December 2005, four mills closed, and more bad news could follow, with Sappi's Nash mill also facing possible closure this year.

Export sales were also down 10% to 1.1m tonnes, a figure that has fallen by 250,000 tonnes since 1999.

Bradley said she did not think that hikes in gas prices were over and that harsh times lay ahead. "I don't think there is a silver bullet answer to this problem," she said.