DS Smith Packaging Belper managing director Graham Tattam said: "We are delighted to have secured this investment. It is a massive vote of confidence in the team at Belper."

The start of the building work was marked with a ceremony on the site, which was attended by Graham Tattam along with local MP Pauline Latham.

Latham said: "It’s great to see a local manufacturing business have the confidence to invest at a time when others are finding trading conditions pretty tough."

The Belper factory, which has 170 staff, was set up in the 1960s and specialises in the manufacture of printed corrugated boxes.

The investment comes after the DS Smith group announced it had decided to sell its Monmouth plant, which was a condition of its takeover of SCA Packaging, Europe’s second biggest packaging business.

The packaging group, which launched its £1.4bn reverse takeover bid in January, agreed to sell either its Hinckley, Leicestershire or Monmouth plant to address concerns by the European Commission that the acquisition would threaten competition in the market.

It has also agreed to sell its site in Darlington and Caradec in north-west France.

DS Smith Packaging managing director Chris Brereton said the company would choose new owners for the Monmouth site "under independent scrutiny" and assured staff that the factory would continue to operate "as a well-run business with good future prospects".