A PAPER mill in Sudbrook will shut at the end of May causing the loss of 135 jobs.

DS Smith plc, the owner of Sudbrook Mill, has blamed soaring energy costs and a drop in demand for the proposed closure.

The firm said the mill was losing £3m annually after fuel bills more than doubled over the last three years.

Graham Plummer general manager of Sudbrook Mill said:

"We have explored all the options for returning Sudbrook Mill to profitability and I greatly appreciate the efforts that everyone at the mill has made to improve its performance.

"I regret that in view of the mill's difficult market conditions and higher costs, we see no alternative to this proposal to close the mill.

"We will now do all we can to help employees find alternative employment either within our company or elsewhere."

Manufacturing union Amicus have responded angrily to news of the closure of the mill and the assistant general secretary, Tony Burke said: "This is another blow to the UK paper and board making industries. We have lost more than 300 jobs in the past few weeks and there are more under threat.

"It's more devastating news for our members and their families and we had already warned people that the high cost of energy was threatening the future of a number of the companies in this industry."

DS Smith plc, has a turnover of £1.6 billion and employs approximately 11,900 people, of whom 7,500 are in the UK.

It has operations in France, Germany, Italy, Spain, Belgium, Ireland, Poland, Turkey, Czech Republic, USA and New Zealand.

The mill produces approximately 150,000 tonnes of a speciality form of cardboard casing every year, but in a competitive market the mill has been unable to pass on its increased costs to its customers.

Monmouthshire county councillor Peter Fox said it was a huge blow for the area. He said:

"Generations of families had worked there since it opened in the 1950s and most of them lived in the area."

One of the workers at the mill, Kevin Watkins said:

"The news is absolutely devastating. It will be very difficult to find a job in this area now because there isn't another big employer around. It has wiped everyone out."

The firm said it would try to help its employees to find new jobs and an estimated third of the £22m closure costs would be given in redundancy payments.