AN HISTORIC papermaker has announced it will be ‘winding down’ its business in Hampshire as its bank note printing contract has come to an end.

Portals, which has been printing banknotes and security paper for more than 300 years, opened its Overton Mill site in 1922.

Portals founder Henry Portal set up a paper mill at Bere Mill, on the River Test between Overton and Whitchurch, in 1712.

Its largest contract has been with Basingstoke-based company De La Rue, which designs and prints banknotes, for which it produces the paper. 

It employs 300 people at its 30 acre Overton site, printing circa-14,000 tonnes of banknote paper a year. 

However, the company has now said that, due to rising costs and the ongoing effects of the pandemic, its business in Overton is ‘no longer viable’.

In a statement, a Portals spokesperson said: “Following the global pandemic and other recent world events we have, however, seen a significant adverse impact on our banknote paper business. 

“It is also clear that the change in the strategy of our largest customer, De La Rue plc, and the rising input costs specifically of energy, all in the context of the highly price competitive banknote paper marketplace in which we operate, means that our banknote paper business at Overton is no longer viable.”

SEE ALSO: Portal Papers considering redundancies in bid to be 'more competitive'

They continued: “In trying to address this very difficult context, we have considered a range of strategic options. It is therefore with deep regret that we have announced today our proposal for an orderly wind down of operations at our paper mill in Overton, Hampshire. 

“Portals has a strong, proud heritage and it is our intention to wind down the Overton operations in an orderly fashion with as little disruption as possible - guaranteeing that all obligations to our customers, employees, suppliers and creditors are met. 

“The orderly wind down of Overton will then allow Portals to fully focus going forward on the remaining, successful parts of its business: our paper mill in Bathford, Somerset, which focuses on the supply of high security papers, and our security features business in Milan, Italy, are unaffected by this announcement.”

The company said it wishes to thank its team for “their ongoing dedication and hard work”, adding: “The coming months will be challenging in many respects and we will continue to do our utmost to maximise the prospects of all of our stakeholders.”

A 45-day consultation period has begun with its employees and Unite the union.

In 2018, Portals secured was spun out from De La Rue, with a contract put in place that the printing relationship would be maintained, but the departure announcement comes alongside the termination of this contract.

De La Rue said the move would enable it to 'become stronger.' 

Clive Vacher, CEO of De La Rue, added: “This settlement is another significant step in our plans for De La Rue to become a stronger, cash generative company, and in solving the legacy issues still present in the Company. It allows us to exit an agreement that had over five more years to run which would have cost the company approximately £119m in that period in fixed charges, profit contribution and volume shortfall payments, and which adversely affected our competitiveness.

“We are grateful for the long and productive relationship that De La Rue has had with Portals, which has stretched over many decades.”

SEE ALSO: Hampshire-based De La Rue gets license to print extended

Reacting to the news, Overton’s MP, Kit Malthouse, said: “This is a devastating blow for Overton, Whitchurch and the surrounding area where the history and livelihoods of so many families have been bound up with the 300 year history of Portals. 

"Over the last couple of years, I have been in close touch with the company as they struggled with overseas competition and rising energy costs, and at all times it has been apparent that the management have a strong sense of duty to their workers.

"Sadly the future operation of the mill at Overton now seems financially impossible, and an orderly wind down, with a generous redundancy package and outplacement support, is of course preferable to going bust. I will be liaising with the Union representatives, and workers themselves, during the consultation to make sure that they get all the help and assistance they need.” 

He continued: "While the future of the mill site will now be uncertain, given its location at the headwaters of the Test, there will also be significant environmental concerns to be addressed. The management have assured me that they have every intention of doing their duty in this regard, and I will of course monitor their progress closely and liaise with the Environment Agency.

"This is a very sad day for North West Hampshire. I share the distress and will do what I can to help the community through this difficult chapter in our history.”

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