£11.4m cost of King’s Lynn’s Palm Paper mill fire revealed in report
Bosses of a Lynn paper mill were left with a bill of more than £11 million following a major fire at the site, new documents have revealed.
Palm Paper’s latest accounts have also revealed the company made a pre-tax loss of almost £8.8 million in 2016, more than £3 million higher than the previous year.
But the report also suggests the plant’s fortunes have been boosted by Brexit uncertainty, despite continuing falls in newsprint demand.
Dozens of firefighters were called to the plant in Poplar Avenue, Saddlebow on October 7 last year when the blaze broke out. One person was taken to hospital suffering from the effects of smoke inhalation.
Accounts for the year ending December 31, 2016, which have now been published, have now shown the blaze cost the company more than £11.4 million, while it received around £13.3 million in insurance payouts.
Just under £9.5 million is listed as “property damage” in the papers, with a further £810,000 shown as “Impairment of fixed assets destroyed.”
The remainder, around £1.15 million, was classed as business interruption.
The company made a pre-tax loss of around £8.77 million in 2016, compared to just over £5.1 million in 2015. Turnover also fell by nearly £19 million to £137.8 million.
The report said: “The main objective of the group in 2016 was to maintain the hig PM7 production levels of newsprint grades as achieves in the prior year. This aim was managed during the first nine months of 2016.
“However, following a fire in the mill, production volume levels of newsprint were severely curtailed.”
The accounts also recorded that UK demand for newsprint fell by 6.7 per cent last year, and 5.2 per cent globally.
But the report added: “Following the Brexit referendum profitability was positively impacted by a newsprint price increase of 10 per cent in the second half of 2016.”
The publication of Palm Paper’s accounts came just days after a topping out ceremony on its new multi-million combined heat and power plant.
The £45 million facility is due to begin operating early next year and will use gas-and-steam turbines to generate all the electricity needed to power the factory’s production processes.
And the company’s accounts have highlighted the benefits managers believe the scheme will offer them.
The report said: “This initiative will significantly reduce the mill’s energy costs and at the same time enhance both Palm’s profitability and competitiveness in the market.”
The company also claims the plant will reduce carbon dioxide emissions by around 100,000 tonnes a year, compared with those generated by important that energy from the grid.