Tullis Russell has gone into administration and 325 jobs have been lost immediately.
The long-established Markinch papermill confirmed today (Monday) it had appointed KPMG as administrators after battling major losses in recent years.
The employee-owned company was launched in 1809 and has a long and proud local history - the impact of the devastating job losses will be felt among families across many local communities.
The plant employed 474 people and 471 worked locally.
The remaining 149 will stay on site to process any outstanding orders.
Rumours of problems circulated over the weekend, but the scale of the job losses, and the speed of the axe falling has left many stunned.
With its markets in long-term decline, Tullis Russell suffered pre-tax losses of £3.4million in 2014, taking its cumulative losses to £18.5m in the past five years.
Attempts to find a buyer failed last October, and directors - said to be in talks all weekend before news of administration broke - decided this was the only route open to them.
The papermill had a turnover of £126m, but its market was in long-term decline as customers switched to digitally-based products.
Faced with over supply in a global market, Tullis Russell widen its product range and took steps to improve efficiency, but its losses continued to rise, putting severe pressure on cashflow.
It lost a major customer to insolvency, saw its main raw material, wood pulp, trade at consistently higher levels than previously experienced, and its European market was hit as the £ strengthened against the Euro.
With losses predicted to continue, and no sign of a buyer, directors called in KPMG.
The administrator moved immediately to cut costs by axing hundreds of jobs with immediate effect.
Those who remained in post did so to finish existing orders.
Blair Nimmo, joint administrator and head of restructuring for KPMG in Scotland, said: “This is a sad day for the employees of Tullis Russell Papermakers who have worked hard against the significant headwinds facing the global papermaking sector.
‘‘Whilst we will be exploring whether a sale of all or part of the business and asset of the company can be achieved, we have had to take steps to significantly reduce the company’s overheads. Unfortunately, with trading effectively ceasing, we have had no option but to reduce the size of the workforce.
‘‘We will be working with government agencies to minimise the impact on employees. We would encourage any party with an interest in acquiring all, or parts, of the business to make contact with us as soon as possible.”
Tullis Russell Papermakers Limited is a wholly owned subsidiary of Tullis Russell Group Limited. The Group’s Coating business based in Bollington, Cheshire and its Image Transfer business based in Ansan, Korea are not affected by the administration and continue to trade as normal.
>> Do you work at Tullis Russell? Has your family had links with the company over generations? We’d like to hear your story - please call our news team on 01592 645700 or email email@example.com