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Historic paper mill to be sold for housing - but ex-workers will still get no payout

A historic Kent paper mill that shut after being plunged into administration is set to be sold for millions – but staff laid off are still unlikely to be paid the cash they are owed.

The site of the old Chartham Paper Mill near Canterbury is being marketed for potential redevelopment and could fetch a seven-figure sum.

The 26-acre site of the former Chartham Paper Mill which is up for sale
The 26-acre site of the former Chartham Paper Mill which is up for sale

But while the proceeds will help former owners ArjoWiggins pay back a chunk of its multi-million-pound debts, former employees and unsecured creditors will receive nothing.

The 284-year-old firm was put into administration last year, leaving dozens of employees and more than 100 businesses out of pocket.

Robert Banks, who runs Bethersden-based Elite Power Transmissions, described it as a “kick in the teeth” when the firm went under owing his business £18,500.

Elite Power had worked for the mill, which sprawls across 26 acres, for around five years, repairing fans and supplying electric motors.

"If you take that much money out of any small business, it's going to hurt - that's a lot of money for us to write off, “ he said.

"We'll survive, but it's something we'll have to take on the chin.”

The site straddling Station Road has recently been put up for sale and is likely to be worth millions if planning consent is granted for new housing.

Chartham Paper Mill
Chartham Paper Mill

Administrators Interpath Advisory says it has placed the mill on the market and “expects to achieve a sale of the land and buildings, and plant and machinery, at some point during 2024”.

She added: “Upon completion of the sale, the funds realised will be distributed to creditors in accordance with security and the insolvency waterfall.

“It remains highly unlikely that unsecured creditors will receive any distribution.”

A report by the administrators also indicates that “ordinary preferential creditors” are also “unlikely” to be reimbursed the estimated £75,000 they re owed in total.

The Kent firms and organisations owed more than £1,000 when Chartham Paper Mill collapsed with huge debts
The Kent firms and organisations owed more than £1,000 when Chartham Paper Mill collapsed with huge debts

The freehold of the redundant industrial site, which consists of numerous old factory buildings, a water treatment plant and scrubland, is being marketed through property consultants, Carter Jonas.

Agent Andrew Smith says it is a “very exciting opportunity” with potential for redevelopment.

No price has been put on the freehold, with bids invited instead. But the mill site is not currently earmarked in the Local Plan for housing.

There was hope in 2020 that the long-established paper-making busines would survive when 80 jobs were saved following a management-led buyout.

But in September last year, the firm suddenly closed down, with bosses blaming difficult trading conditions following the pandemic, with losses exacerbated by increases in energy costs and the price of raw materials.

Staff at Chartham Paper Mill are said to have been in tears after receiving the news
Staff at Chartham Paper Mill are said to have been in tears after receiving the news

It was met with sadness across the village, where many local people had long family associations with the business, with some working there for decades.

But there was also anger when it was revealed the company owed £6 million to staff and more than 100 firms and contractors nationwide who were not going to get paid what they were owed.

Some redevelopment of the site was first proposed back in 2017 when ArjoWiggins revealed plans for 75 homes on 12 acres of land opposite the mill, which included the conversion of abandoned workers’ cottages.

The eye-catching scheme included three steel footbridges across the Stour, but the planning application to the city council was withdrawn the following year.

At a public meeting in the village in January, called by the Chartham Neighbourhood Plan Steering Group to discuss the future of the mill site, many residents and ex-employees expressed concern about the risk of flooding if it was redeveloped. The land has now also been made a late entry into the village’s neighbourhood plan.

As a result, a Paper Mill Working Party of interested residents was established. There is also a Facebook group called Chartham Paper Mill Remembered.

The history of Chartham Mill can be traced back to 1737 when a paper mill was first established in the village. Its ownership changed hands several times over the years, and by the early 20th century it was under the control of Wiggins Teape, a paper manufacturer based in Maidstone.

In 1971, Wiggins Teape merged with the French paper company Arjomari to form ArjoWiggins, and the Chartham mill became part of the new company.

The mill produced a range of high-quality paper products, including fine papers, art papers, and packaging materials.

During the 1990s, a significant modernization program was implemented, involving the installation of new equipment and advanced manufacturing techniques.

But in 2019 Arjowiggins went into administration, and was subsequently run by a management buy-out driven team which went into administration in 2022, and was followed by its full closure in November 2022.

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