Gas prices blamed for plant closure
Tata Chemicals Europe said it was shutting its soda ash factory at Winnington in Northwich, Cheshire, which has produced the chemical since 1874, as it was being squeezed by rising gas prices.
%VIRTUAL-SkimlinksPromo%Job losses will be split across Winnington, support services and Tata's nearby Lostock plant, which will continue making soda ash and sodium bicarbonate - used in baking, detergents and reducing power station emissions.
Tata will also reconfigure a nearby power plant which feeds both factories, under plans to cut soaring energy costs.
A separate sodium bicarbonate factory on the Winnington site will be retained and expanded.
Tata said a nearby British Salt site at Middlewich was unaffected.
It has started a 45-day consultation with staff and unions.
The business is owned by Indian conglomerate Tata, which also owns Jaguar Land Rover and the Corus steel business.
Tata Chemicals Europe managing director Martin Ashcroft said while the decision was "hugely regrettable", it was vital to "secure a sustainable future for our business".
He said: "In the face of high and rising gas prices, we have to reconfigure our business to focus on higher-value products and reduce our energy bill in order to continue manufacturing in Northwich."
The changes will leave Tata Chemicals Europe with about 360 staff.
A spokesman said the business would face a sharp rise in energy costs in 2015 when a deal with energy giant E.ON ended, and which could have made operations in the town no longer viable.
He said while rising gas prices and carbon emission taxes had heaped pressure on the business, it had so far been "sheltered" by the long-term agreement.
Tata last month took control of the combined heat and power plant, previously jointly-owned with E.ON, which will allow it to produce more electricity and less steam, to cut energy losses.
Tata Chemical Europe is the UK's only manufacturer of soda ash and sodium bicarbonate, and the market-leading maker of salt.
The business was previously known as Brunner, Mond and Co, and was founded by John Brunner and Ludwig Mond, who built Winnington Works.
In 1926, Brunner Mond merged with three other British chemical companies to form Imperial Chemical Industries (ICI).
It was sold by ICI in 1991 and bought by Tata in 2006.
Shares in coal mining and industrial group Hargreaves Services slipped almost 3% after it noted the impact on its Monckton coke works in South Yorkshire, which has a contract to supply about 75,000 tonnes of coke annually to the business until the end of 2015.
The announcement coincides with disappointing official figures which showed o utput from British factories fell unexpectedly in August, sending overall industrial production down 1.1% in its biggest monthly fall for nearly a year.
The Northwich sites neighbour Chancellor George Osborne's Tatton constituency.