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Vol.1979/0209

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COMMISSION
OFTHE
EUROPEANCOMMUNITIES
GeneralSecretariatCOM(79)615final
Brussels,12November1979
FOROFFICIAL USEONLY
i
REQUESTFORASSENT/PURSUANT TOARTICLE56.2a)OF
THEECSCTREATYTOGRANTING ARECONVERSION LOAN
TOWIGGINSTEAPELIMITED.UNITEDKINGDOM
(Communication fromtheCommission totheCouncil)
C0MC79)615final

COMMISSION
OFTHE
EUROPEAN COMMUNITIES
HFPHWAIi DOCUMENT
COMMUNICATION TOTHECOUNCIL
Sub.ieot:Requestforassent,pursuanttoArtiole56°2aJoftheECSCTreaty
tograntingareconversion loantoWigginsTeapeLimited.,
UnitedKingdom
I.ESSENTIAL INFORMATION
Applicantt
Beneficiary :
Pro.jeot:
Location:
Investment :
Loanrequested:
Jotscreated:
Interestreduction :WigginsTeapeLimited,UK
Same
Capacityincreasecarbonlesspaperfactory
ElyandTreforest,S.Wales,UK
h20.8m
t10m(+16mEUA)
245«Ely
130.000EUAperyearforthefirstfiveyears*
II.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
1.LOCALECONOMIC STRUCTURE
Thefirm,WigginsTeapeLimited,hasbeenestablishedatTreforestin
thePontypriddTraveltoWorkAreaandhasbeenamajoremployerwithin
thearea.TheprojectforvhiohECSCassistanceissought,ishowever,
locatedatElyintheCardiffEmploymentExchange.
Cardiffhasthestatusoftheadministrative andservioecapitalofWales
andthusreflectsthedistribution oftheworkingpopulationbetweenthe
variousseotors.Manufacturing employmentisrelativelylessimportantin
overalljobopportunities inCardiffthaninWalesasawhole,however,
inabsolutetermsitsdeolineoverthepastdeoadehasledtosubstantial
lossesinemploymentopportunities andisnowgivingrisetoseriousooncern.
Moreimportantly,themanufacturing employmentbasehasinthepastbeen
narrowlybiasedtowardsthemetalmanufacturing tradesandthelossof
steelmakingatBSCEastMoorshasdramatically reducedthenumberof
malemanufacturing employmentjobs,sothattheintroduction ofnew
industryintotheareahasbecomeapressingobjeotive.
Provisionoladdress:RuedeloLoi200,B–1040Brussels–Téléphoné350040-358040–Télégraphieaddress:«COMEURBrussels»–
Telex:tCOMEURBRU 21877•

-2-
CardiffwasupgradedtoaDevelopment AreaforpurposesofUnited
KingdomregionalpolicyinAugust1974followingthemovementofsome
manufacturing industryawayfromtheCitytoadjoiningDAsjthe
closureofoldermanufacturing establishments andthegeneral
reductioninmanninglevelsatothermanufacturing enterprises.
2.POPULATION GROWTHANDDISTRIBUTION
TheCardiffTraveltoWorkAreaincludesmostoftheCountyofSouth
GlamorganandtheEmploymentExchangeofCaerphilly.Thepopulationof
SouthGlamorganisestimatedtobe398»400andhasincreasedbysome
13%between1951and*1976.Sinoe1951migrationhasbeenthesignificant
demographio componentofpopulationchange.Naturalincreaseplayedan
importantrolefrom1951"tothemid1960sbutreducedthereafterand
hasnowalmosttotallyceased.
Thereisevidenceofnotablevariationsintheagestructureofthe
populationwithintheCounty.TheCityofCardiffitselfhasancider
populationthantheValeofGlamorgan,forexample,andtheouterareas
ofCardiffhavesignificantly higherproportionsofpersonsunderthe*
ageof15yearswhilstthePenarthareahasahighproportionofthose
65yearsandover.Overall,however,theagestructureofSouthGlamorgan
approximates closelytothatofGreatBritainandtheSouthGlamorgan
StructurePlanforeseeslittlerealpopulationgrowthoverthenext
15years.
3.PUTCOMMOTUTG ANDMIGRATION
OneofthefeaturesofchangewithintheCardiffareahasbeenthe
simultaneous deolineofmanufacturing employment andanincreaseinthe
levelofoommuting-intoworkfromoutlyingareas.Thishasarisen
primarilyasaresultofCardiff'sgrowingroleastheadministrative
centreofWalesbutithasmeantthatsomeindustrial workershavebeen
forcedtocommutoutintoneighbouring industrial MidGlamorganandGwent
forwork.
4.THEAREA'SLOCATIONINRELATIONTOTHEMAINURBANCENTRESANDTRANSPORT
ROUTES
CardiffisthemainurbancentreinWalesandtherearenowexcellent
roadandraillinkstotheothermajorurbanareassuchastheSwansea
conurbation andNewportinGwent.ThenewM4-motorwaynowlinksthese
majorSouthWalesurbancentres,providingquickandeasyaccessto
marketsandservicefacilities.Inaddition,aseriesofothervalley
communities ,whiohtogetherformasubstantialpartofthepopulation
hasaccesstotheCityofCardiffbyroadandraillinks.Cardiffis
alsolinkedviatheM4andtheraillinetoLondon,totherestofthe
UKandtothemajornationalmarkets.
5.POSTWARECONOMICGROWTHANDFUTUREEXPECTEDTREffDS
TheprominenceofCardiffasanadministrative andservioecentrehas
notdisguisedtheneedtocreateadditionalmanufacturing jobs.In
absolutetermsmanufacturingstillprovidesover25*000jobs(Censusof
EmployeesinEmployment1976).Thepostwarperiodhasseenaslow

-3-
increaseinthenumberofnewmanufacturing establishments openingin
Cardiffandsinoe1966,22newmanufacturing establishments areknown
tohaveopenedintheCardiffExchangeofwhich21arestillsurviving
andcurrentlyemploy1,600people.Itisconsideredessentialforthe
stabilityoflongtermemploymentprospectsandtheeconomicviability
oftheareathatastrongandmorebroadlybasedmanufacturing sector
shouldbemaintained.Thelossofover3»000jobsresultingfromthe
closureoftheEastMoorsSteelworkshasgivengreaterurgencyto
achievingthisobjeotive.
6.UFEMPLOTMEirT
Latestavailablefiguresshowtheunemployment ratefortheCardiff
TraveltoWorkAreatobe7*7%»ThisrateislowerthanthatforWales
asawhole.However,Cardiffhaspersistently experiencedhighmale
unemploymentratesandcurrentlyunemployment amongmalesis10.1%
andishigherthan.boththeWalesandOBrates.Ctoeofthepriorities
thereforeintermsofjobcreationmustbetheprovisionofsuitable
manufacturing jobopportunities torelievethishigherrateof
unemployment amongmales.Thisnewprojectisexpectedtomakesome
contribution toensuringthatadditional employmentopportunities
wouldbeoreatedwithinthearea.
III.THEUNDERTAKHTG
WigginsTeapeLtd.isawhollyownedsubsidiaryofTheWigginsTeapeGroup
LimitedwhichinturnisasubsidiaryofBATIndustriesLtd.BATIndustries
Ltd.isaBritishbasedinternational groupwithinterestsintobacco,
retailing,papermakingandcosmeticsandthepapermakingactivitiesare
operatedbytheWigginsTeapeGroupLtd.TheWigginsTeapeGroupLtd.has
manysubsidiarycompaniesthroughouttheworldandonesuohsubsidiary-
theapplicant,WigginsTeapeLtd.-isresponsibleforpapermakinginthe
UnitedKingdomandEire.
WigginsTeapeLtd.hasnumeroussubsidiaries intheUnitedKingdomandone
subsidiaryinEireandalsooperatespapermillsinitsownname.Cfciesuch
papermill-knownastheElyPaperMill-isinCardiffanditistheonly
WigginsTeapepapermillintheUnitedKingdomproduoingcarbonlesspaper-
knownunderthetradenameof"Idem".Withcarbonlesspaperitisclaimed
thatuptoelevencopiescanbemadewithouttheuseofcarbonpaper.
CrucialtotheproductionofpaperatElyisthecoatingfactoryatTreforest
andinconsideringthisapplication ElyandTreforestareinseparable.Wood
pulpisconvertedtopaperatElyandthentakentoTreforestforcoating
andconversionintocarbonlesspaper.Thefinishedproductisthenbrought
backtoElyforwarehousing .TheWigginsTeapeGroupLtd.hasasimilar
papermillandasimilarcoatingfactoryinBelgiumatVirginalandHivelles
respectively .
TheElypapermillsoccupyanareaofsome4*2acresand,exceptforasmall
partleasedfromCardiffCorporation,isfreehold.TheTreforestcoating
factoryoccupiesanareaofsome6.5acresandisleaseholdwithleasesdue
toexpirein1993and2037.

-4-
IV.MARKET AND dVESTMESTP PROJECT
Idem Carbonless paper isproduced inSouth Wales andBelgium .Demand
forthis Wiggins Teape (W.T. )product ,based onW.T.*s strategy of
maintaining itsourrent market share intheU.K. andEurope of45%i
will beofth®order of143,000tonnes "by198l/82attheexpected
growth rates :theassumptions are3%forGSPgrowth overall in
Europe ,multi-part business forms within this area growing atanaverage
of7%tcontinuing carbonless penetration into theforms market at1.3%
andchemical carbonless voluma from whatever source increasing at13$
p.a.(compared with 18%over theprevious seven years ).
Completion ofthecurrent investment inBelgium bymid 1979 will provide
capacity of75t000tonnes .Current production atEly/Sreforest isatthe
rate ofsome 40,000 tonnes perannum which means that theproposed
investment inSouth Wales needs toprovide anadditional 28,000 tonnes
ofcapacity inorder tobring theIdem Business production levels upto
143»000 tonnes by1981/82.
Toexpand production thecompany will be
1)building aunit ofapproximately 6,000 sq.mtohouse acompletely
new emulsion coating line andtoprovide acentralised store for
approximately 5t000tonnes ofbase paper ;
2)building anewwarehouse ofapproximately 10,000 sq.m alongside the
oldtohouse some 4»500 tonnes offinished products ;
3)converting theexisting slightly larger warehouse tohouse existing
andnewfinishing machinery i.e. r'alitting ,reeling ,sheeting .
Inaddition equipment changes andmodifications toimprove quality and
quantity areproposed toexisting mills andcoating machines atEly
andcoating andsheeting machinery atTreforest .These account for
approximately h3mofthetotal i20Jbmproject costs .
V. EMPLOYMENT
Thelabour force atpresent employed atthecombined Ely/Treforest
undertaking is1470 split fairly evenly between thetwolocations .
Theproposal toestablish ontheElyHill Site amajor "coated back "
production unit with finishing andwarehousing facilities obviously
necessitates aninoreased work force atElyMill ,off-settosome
extent byadepletion inthenumber atTreforest .Insummary the
position isseen as
Ely Treforest íet
1979-Mid +2 - +2
1979-Late +215 - +215
1980-Mid +63 -22 +41
1981-Mid +36 -49 -13
+316 -71 +245
A4-shift continous system ieinoperation atElywhilst a3--Bhift
54dayweek isandwill continue tobeworked atTreforest .

-5-
Theadditionalemploymentwillbeforthefollowingcategories
Dayi–etaff
Shift
Day«■operatives
Lessréductions
Shift
Dayopérâtives
NetRecruirement
W.T.intendstotransferpeoplebeoomingredundantatTreforest
toElywhereverthisispossibleandacceptabletotheindividuals.
Thesuccessofthiswillaffectthenumberandtypeoflabourtobe
recruited.GenerallyfortheCoatingandFinishingprocesstraining
willbenecessaryandthetimetableincorporates this.
VI.FINAKCINO
Theestimatedfinancialrequirements andresourcesoftheEly/Treforest
undertakingforthefiveyearsending30September1982aresetout
below:
Requirements total£000
Projectcapitalexpenditure 20,800
Workingcapital 1,800
othercapitalexpenditure 9*500.
32,100
Resources
Surplusanddepreciation 17»400
R.D.grants 4»140
ECSCloan 10,000
InterestReliefGrant 560Additional
27
276
13
316
-61
-10
245
32,100
./

-6-
VII .CONCLUSION
The Commission considers that therequest complies with Article 56(2a)
oftheECSC Treaty andthat theproposed investment iseconomically sound .
Inconsequence theCommission hasapproved aloan toWiggins Teape Limited
foritsproject atEly/Treforest foramaximum amount ofL10m(+16mEUA)
oritsequivalent amount .Interest istobereduced by150,000 EUAmaximum
peryear forthefirst five years after thepayment orpayments ofthe
loan .
TheCommission invites theCouncil togive itsassent totheforegoing
decision .