The planned closure of the oldest machine on the site, PM1, comes just two months after St Regis began producing a lightweight corrugated card material on a newly-converted machine at Kemsley.
DS Smith has said that a decline in market demand for the type of product produced by the older machine and a need for investment to modernise it means that the company has opted to close the machine.
Consultations have started with trade unions and the closure is expected by the end of next month with the loss of 40 jobs.
St Regis currently operates four paper machines on the Kemsley site, producing a total of over 850,000 tonnes per annum. PM1 is the oldest of St Regis' paper machines and uses about 90,000 tonnes of recycled material.
Two other machines on the site produce about 500,000 tonnes of cardboard and the fourth machine is a newly-converted plant which produces lightweight liner and fluting material. This plant, the New Thames Paper Mill, has received £37 million of investment, and started operations in January 2009 after the facilities were bought from M-Real for £69 million last year.
Overall, Kemsley Mill is one of the largest recycled corrugated case material manufacturing sites in Europe. Most of its recycled material comes through St Regis' sister-company Severnside Recycling.
The reduction in demand at Kemsley because of the closure of PM1 is seen as likely to have some impact in the market for used cardboard. Recent weeks have seen prices edge down slightly after something of a recovery in January and February.
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