More than 300 workers have been made redundant at a paper-making firm after it was plunged into administration.
Tullis Russell Papermakers, based at Markinch in Fife, called in administrators after experiencing a long-term decline in its market and cumulative losses of £18.5 million over the last five years.
Steps begun last year to find a buyer for the business also proved unsuccessful.
Joint administrators Blair Nimmo and Tony Friar of KPMG were appointed today and concluded there was no option but to reduce the size of the workforce.
This has led to 325 employees being made redundant "with immediate effect".
The remaining 149 workers have been retained at this stage to complete some orders.
Mr Nimmo, head of restructuring for KPMG in Scotland, said: "This is a sad day for the employees of Tullis Russell Papermakers, who have worked hard against the significant headwinds facing the global paper-making sector."
The employee-owned company was founded more than 200 years ago and produces paper board for cards, covers and packaging.
It had 474 employees, with all but three working out of Markinch.
In the year to March 31 2014, the company sold 126,000 tonnes of paper and board. It recorded a turnover of £124.6 million but suffered a pre-tax loss of £3.4 million, administrators said.
The firm suffered total losses of £18.5 million over the last five years, largely due to weakening demand and pressure on its margins.
It has also faced other challenges, such as the cost of raw materials, the strength of sterling against the euro and the loss of a big customer due to insolvency proceedings.
Despite efforts to improve the efficiency of operations, the company remained "significantly loss making" - a situation which was expected to continue.
Steps were taken in October last year to find a buyer for the business, but no party was found.
The firm was placed into administration by its directors today.
Confirming the redundancies, Mr Nimmo said: "Whilst we will be exploring whether a sale of all or part of the business and asset of the company can be achieved, we have had to take steps to significantly reduce the company's overheads.
"Unfortunately, with trading effectively ceasing, we have had no option but to reduce the size of the workforce. We will be working with government agencies to minimise the impact on employees.
"We would encourage any party with an interest in acquiring all, or parts, of the business to make contact with us as soon as possible."
Tullis Russell Papermakers is a wholly-owned subsidiary of Tullis Russell Group Limited.
Group chief executive Chris Parr said the directors of the paper making business were faced with no other option than to place the business into administration.
He said: "This is a terribly sad day for employees and their families, the local community and everyone else associated with the business and its proud 206 year history.
"Since the global recession in 2008 demand across the traditional markets for papermaker's products has fallen by 40%, our primary raw material, wood pulp, is now trading at consistently higher price levels than ever before and exchange rates have moved structurally against the business."
Mr Parr said it become clear that Papermakers was no longer a viable business.
"The group engaged KPMG to run a comprehensive sales process and between October 2014 and March 2015 over 72 trade parties have considered and subsequently rejected the opportunity to acquire the business. This has unfortunately only confirmed that the business is no longer viable," he said.
"This difficult position finally became untenable with the papermaking company's third largest and most profitable customer entering into an insolvency process on Monday 1 April 2015. The directors of our papermaking business were therefore faced with no other option than to place the business into administration."
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