Iggesund Paperboard will begin a review into its Workington plant next month.

The difficulty of the commercial climate and increasing costs of raw material have prompted the move, the Swedish firm said.

It declined to comment on rumours that jobs were under threat – believed to be around 40 posts from the 400 or so it employs – but added: "Over the past 18 months, internal communications to the workforce have monitored these concerns and the need to protect profitability."

Ulf Lofgren, the mill's managing director, said: "There has already been a lot of good work done to ensure that we are a strong and viable mill and we see excellent commitment from people taking responsibility to drive operational efficiency.

"Although this has helped protect us in the short-term, we know that to strengthen our competitiveness in the medium to long-term we need to combine this work with a wider review of the organisation to realise an overall reduction in costs."

A statement from the firm said: "The mill is currently operating in an extremely difficult commercial climate. At the same time we have seen increases in European paperboard capacity which has restricted the opportunity to pass on costs to the customer.

"A consultation on a proposal for change will take place in October."