The manufacturing sector suffered another blow yesterday with the announcement that 90 jobs are to go at a paper plant.

Memphis, Tennesse-based Buckeye Technologies said it planned to close its plant in Cork with the loss of 90 staff. The company said the factory was no longer viable.

Buckeye plans to shift production to facilities in Germany and North America. The Cork plant will close at the end of next August.

Buckeye processes cellulose for use in specialised paper products like motor engine filters, currencies, adult hygiene products and domestic wipes. The Irish plant produced material used in the latter two product types.

Its managing director, Mr Gavin O'Neill, said yesterday that supply had outstripped demand in the sector worldwide, which in turn had depressed sales from the Cork plant.

"While every effort has been made to increase sales through the development of new products, we have been operating at 66 per cent capacity for the last number of years, which is not sufficient to be a viable operation," he said.

Buckeye recently reported that it had lost $10 million (€8.1 million) after tax in the three months to the end of last December. Its revenues increased slightly during the same period to $160 million. The company blamed a restructuring charge of $3.8 million for its losses.

The group had warned that it was facing this shortfall before the end of December, but its statement described the results as disappointing.

The closure of its Cork plant will cost the company $3 million in restructuring and reduce its non-cash assets by $27 million. Chairman, Mr David Ferraro, said that it would result in a saving of $4 million in working capital between the end of August and the end of the 2005 calendar year.