HUNDREDS of papermaking jobs have been secured by a £104 million deal for Kemsley mill.

Packaging firm DS Smith has bought New Thames Paper Mill, Sittingbourne, from the M-Real Corporation to crank up production of high-quality lightweight recycled corrugated case material (CCM).

The move maintains the town’s distinguished papermaking tradition which was dealt a blow with last year’s closure of the 130-year old Sittingbourne mill with the loss of more than 300 jobs.

The New Thames mill employs 280 people at the moment but possible changes under the new owners might eventually cost a number of jobs.

David Scudder, company secretary of M-Real Thames Mill, said the acquisition was good news for the site and there had been a positive response from the workforce.

But he admitted there was some concern over jobs.

“Clearly, there is some uncertainty about the future for some jobs,” he said. But DS Smith would look at the situation and make sure they had a structure that “works for them.” It was far too early to say what would happen.

He added: “People are a little bit shocked and I think ultimately we will end up being positive and people will see that. Clearly, any buyer buying a mill to keep it operating is a positive result.”

DS Smith, which already owns part of the Kemsley site, is paying £60m in cash, with a further £7 million going towards employee pensions. It will inject a further £37m into converting the mill to CCM production over the next 12 months.

M-Real, part of the Finnish Metsäliitto Group, said the deal would help it streamline its operations and free it from £26 million in pension liabilities and other costs following its closure of the Sittingbourne mill.

DS Smith is also taking full control of Grovehurst Energy which operates a combined heat and power plant and provides power, steam, water and effluent treatment to the mill.

Tony Thorne, group chief executive of DS Smith Plc, said: “This significant development will create, in a highly cost-effective way, one of the most flexible and cost-competitive CCM mills in Europe at our principal site at Kemsley.

“It will strengthen our important UK paper and corrugated packaging business and give us a significant capability in the growth segment of high-quality lightweight CCM paper. We are confident it will provide very good returns for our shareholders.”

Mikko Helander, chief executive of the M-real Corporation, said: “We are streamlining our office paper production by concentrating it on the newer mills. The continuation of the present production in the New Thames mill would require major investments.”

DS Smith Plc, founded by David Smith in 1940, has annual sales of £1.8bn and employs more than 11,000 people in 16 countries.

The business grew rapidly during the 1980s with the acquisitions of St Regis Paper Company in 1986 for £83 million and Kemsley Paper Mill in 1988 for £11 million. The purchase of New Thames Mill is subject to regulatory approval.