FOUR hundred packaging jobs are to be axed in Gillingham after last-ditch attempts to find a buyer fell through.

The decision to wind down Crest Packaging in Courteney Road is a devastating blow to the local economy and manufacturing in Medway. The firm’s other factory in Wellingborough, Northants, will also close.

Staff had been braced for bad news since joint administrative receivers were called in last month. They had pinned their hopes on a buyer being found.

A spokesman claimed then that it was “business as usual” while Simon Michaels and David Gilbert of BDO Stoy Hayward tried to find a way out of the crisis.

But despite interest from 140 possible buyers, not one has been able to go ahead. According to the receivers, the most promising bid was aborted at the “final hour,” precipitating closure. Receivers said the factories would be “wound down over a period of months.”

The company designs, prints and manufactures flexible packaging and cartons. It has two divisions in Gillingham. Crest Flexible Packaging employs 231 people 194 staff at Crest Cartons.

Crest Packaging Plc, one of Europe’s leading packaging companies with a turnover of more than £50 million, has been losing money for some time. Its plight was made worse by the strength of the pound against the euro, and over-capacity in the market, leading to growing pressures on pricing and margins.

All 500 staff at Crest’s premises in Gillingham and Wellingborough, Northamptonshire, will be made redundant during the winding-down period.

A “skeleton” staff will remain in the three factories to fulfil outstanding orders.

Trade union officials from the Graphical, Paper and Media Union (GPMU) are working with receivers to secure the best redundancy terms for workers.

In a statement, Mr Michaels said: “Crest has struggled against a number of forces beyond its control, which led to cash flow problems.

“Although interest in the business was high, plans to secure a buyer fell through at the final hour and we will now be winding the company up over the next few weeks, disposing of the properties and other assets, and ensuring that all outstanding orders are satisfied without any disruption.”

Crest closed its pension scheme last year at a cost of £2.5m to the business, leading to a shortfall in investment capital.

Crest Packaging Group has been making products for major players in the consumer, industrial and medical markets for more than 40 years.