A PACKAGING facility in Newport could close with the loss of 150 jobs, it has been announced.

Essentra has announced plans to close its IP5 plant, which creates folding cartons for the consumer goods market, in Imperial Park.

The company, which was handed a £400,000 grant by the Welsh Government in 2015, said the facility had made a £3.4 million loss in the first six months of this year, and this was not expected to improve “in the near, or even long term”.

The company employs 260 staff over two sites in Newport, 150 of which are affected by the plans. A consultation with affected staff has been launched and, if the plans go ahead, the site will close at the end of this year.

A statement from the firm said: “The company appreciates that this announcement will cause a great deal of uncertainty for its IP5 employees, and intends to provide as much support as possible as matters progress through the consultation process.”

The firm’s other site in Newport, which creates foils and labels and also contains a design hub and employs 110 people, is not affected.

The Welsh Government has said it will look into recovering some of the £400,000 grant if the firm goes ahead with redundancies.

A spokesman said: “We are deeply disappointed that Essentra plc has entered a period of consultation on the proposal to cease the production of folding cartons at Newport.

“This will be a worrying time for workers and their families and we will be working closely with the company and others to ensure employees are fully supported throughout this difficult period.”

And South Wales East AM Mohammad Asghar called the news “disappointing”.

“It is always extremely difficult for those affected by the prospect of redundancy, and this is sadly another blow for the area after similar job losses, with plans to cease trading at the site by the end of the year,” he said.

“The Essentra cartons plant has received substantial investment from the Welsh Labour Government to help expand its operations in the city. This has clearly not succeeded and down the line there will be some serious questions for ministers to answer.

“In the meantime, the Welsh Government must step in immediately and consider what packages of support they will be able to offer the workers who have been made redundant, both in terms of retraining and support in securing new employment.”

Essentra chief executive Paul Forman said: “Specialist secondary packaging is strategically important for Essentra, given the size of the underlying market and our extensive product portfolio and expertise.

“However, if we are to rebuild solid foundations from which we can restore growth in our global health and personal care packaging business, it is imperative that we focus our capabilities on those activities which provide the most attractive, profitable opportunities in which we can add value to our customers.

“It is clearly with regret that we are entering into consultation on this proposal, and I and the project management team are committed to undertaking this process in an open, honest and respectful way.

“The possible closure of the IP5 site in Newport is in no way a reflection on the quality or commitment of our employees.

“Rather, the proposed closure of the facility will help to underpin the Company’s strategic objective of becoming the leading supplier of innovative packaging solutions and services, from a cost effective and operationally efficient site footprint.”