THE axe is to fall on 50 jobs at Radcliffe's East Lancashire Paper Mill.

And the shock news coincides with the announcement that the company, one of the town's biggest employers, is to embark on a £3.36 million investment programme.

The job losses are being blamed on financial difficulties within the mill's packaging division, and the company's ongoing drive "to improve efficiencies and profitability".

ELPM chief executive Mr Andrew Rothwell says the financial fortunes of the packaging wing of the business showed no improvements last year.

In the past two years there had been a decline in selling prices, prompting management to review the future of the business, added Mr Rothwell. As a result of that situation, two paper machines will no longer be used to manufacture packaging.

Instead, this part of the operation will be concentrated on the mill's fastest and most modern paper machine, which will have £2.36 million spent on it to improve the output of its expanding coloured business papers.

And an additional £1 million will be spent on converting another paper machine to produce specialist grades.

In order to improve the delivery service to customers, the company also plans to build a new on-site warehouse at an unspecified cost.

In a notice to the workforce, Mr Rothwell says: "The result of the above restructuring is that it will, very regrettably, be necessary to reduce the mill's workforce by approximately 50 people."

He stressed the unions had been informed, with a view to starting consultations as soon as possible.

However, he declined to comment on whether the redundancies would be voluntary or compulsory, and whether they would include management.

The company, which employs around 300 people, made 40 redundancies in 1997.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.